How long can China play the critical minerals trump card? | The Business | ABC NEWS
Chief economist for Greater China with Bank of America, Helen Qiao joins The Business to explain China’s economic outlook following a critical minerals deal between Australia and the United States. China produces over 90% of global refined rare earths and rare earth magnets. It has been using export controls as a strategic advantage and a negotiating tool with trading partners, particularly in the US-China trade war. Helen Qiao says the landmark rare earths deal between Australia and the US signed this week is just one example of countries seeking to go around China to gain access to rare earths and critical minerals. She says China has to be careful how it uses these commodities as a bargaining chip, saying it could backfire. “There’s also the risk that the rest of the world not only the US but everyone will try to diversify away as quickly as possible.” she said.
Helen Qiao also says China’s demand for Australia’s biggest export, iron ore, looks set to wane its economy slows. She says China has accumulated quite a large amount of reserves already off iron ore and they are gaining some bargaining chips in terms of the negotiations to get a better price. And when it comes to China’s performance in the face of the US trade war, she says China’s exports have held up. “China’s exports have been unusually resilient, despite people’s expectation that the tariff war would probably bring it down very substantially. In fact, in the last 18 months, we haven’t seen a negative export growth month. And if anything, we have seen that Chinese exports to the US, down by about 17% year to date, being largely replaced and offset by strength of Chinese exports going to Asian Europe as well as LATAM”, she said.
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