In response to the US approval of a $5 billion arms sale to Taiwan, China has issued a warning to the US on the matter and announced a new round of sanctions against the US, according to a commentary published by Russia Today (RT) on 26 October. According to the article, if China intends to take tough measures, it could hit the supply chains of the affected US companies hard.
The article pointed out that the list of sanctions announced by China includes Lockheed Martin, Boeing Defense and Raytheon, targeting the core of the “U.S. military-industrial complex”.
At first glance, the article says, the sanctions appear to be “symbolic” because such military-industrial enterprises have no business in China and no market activity in the United States. But on the other hand, it cannot be said that such sanctions will not have strategic significance. There are many ways in which these sanctions could make a “real difference.
Currently, the U.S. military relies heavily on materials imported from China to manufacture equipment. For example, in the U.S. defense manufacturing of “rare earth” materials, China has an overwhelmingly dominant position. If the sanctions imposed by China take effect, they could have a significant impact on the supply chains of US companies.
Rare earths, known as “industrial gold” and “industrial vitamins”, have irreplaceable excellent magnetic, optical and electrical properties, and are mainly used in the manufacture of various products, including electronic products, vehicles, military equipment, and so on. Rare earth resources form the cornerstone of many supply chains around the world.
Studies show that China produces about 85 percent of the world’s rare earth oxides and about 90 percent of its rare earth metals, alloys, and permanent magnets.In 2018, 80 percent of U.S. rare earth imports came from China. Now, Washington understands this and is busy dealing with the contingencies brought about by the sanctions.
According to the article’s analysis, the U.S., which has been sanctioned by China, will see the move as a major escalation that could lead to harsh retaliation against Huawei and other Chinese companies, but such a move would clearly be unwise, especially as we head towards voting day in the U.S. election. Unless there’s a “war-like” scenario, this would only be a last, risky move on the US side.
According to the article, China’s sanctions against U.S. military industrial companies are not so much a policy, but rather a declaration of future events. China was not originally interested in taking advantage of the U.S. reliance on rare earths, but given the U.S.’s frequent overtures, it may take measures against U.S. companies at the right time.
As an example, the article says that, as the PLA’s resolute approach to military exercises shows, the Taiwan issue is a huge red line for China that cannot be crossed. Once this red line is crossed in an attempt to destabilize the situation, the consequences are already evident.
Recent Comments