China is ready to use rare earths to strike back in a trade war with the United States, Chinese newspapers warned on Wednesday in strongly worded commentaries on a move that would escalate tensions between the world's two largest economies, reports Reuters.
President Xi Jinping's visit to a rare earths plant last week had sparked speculation that China would use its dominant position as an exporter of rare earths to the United States as leverage in the trade war.
Rare earths are a group of 17 chemical elements used in everything from high-tech consumer electronics to military equipment. The prospect that their value could soar as a result of the trade war caused sharp increases in the share prices of producers, including the company visited by Xi.
While China has so far not explicitly said it would restrict rare earths sales to the United States, Chinese media has strongly implied this will happen.
In a commentary headlined "United States, don't underestimate China's ability to strike back", the official People's Daily noted the United States' "uncomfortable" dependence on rare earths from China.
"Will rare earths become a counter weapon for China to hit back against the pressure the United States has put on for no reason at all? The answer is no mystery," it said.
"Undoubtedly, the US side wants to use the products made by China's exported rare earths to counter and suppress China's development. The Chinese people will never accept this!" the ruling Communist Party newspaper added.
"We advise the US side not to underestimate the Chinese side's ability to safeguard its development rights and interests. Don't say we didn't warn you!"
The expression "don't say we didn't warn you" is generally only used by official Chinese media to warn rivals over major areas of disagreement, for example during a border dispute with India in 2017 and in 1978 before China invaded Vietnam.
AFP adds: China warned the United States on Wednesday not to "politicise" the exchange rate of its currency amid a festering trade war between the two economic giants.
The US Treasury declined to label China a currency manipulator in its latest semi-annual report but also called on Beijing to prevent the yuan from weakening.
"We have always said here that we hope the US side will respect objective facts, market rules and not politicise the exchange rate issue," said foreign ministry spokesman Lu Kang.
While the Treasury report said "direct intervention by the People's Bank of China in the last year has been limited," the department also released a statement urging "China to take the necessary steps to avoid a persistently weak currency."
