China bans export of Korean goods containing its rare earth metals to US.
The Chinese government has warned South Korean companies of retributions for exporting any product containing its critical metals to US military contractors, a move expected to take a toll on the export-reliant Korean economy.
According to sources in the Korean transformer industry on Tuesday, at least two of its transformer manufacturers have received official notices from the Chinese government, demanding they cease exports of any power equipment containing Chinese-origin heavy rare earth metals to US military contractors or the US military.
The letter, which also warns that violations may trigger sanctions or other regulatory action, did not specify the nature of potential penalties. However, the companies fear Beijing could completely block sales of the metals altogether.
This marks the first time that China has formally taken export control measures on non-US companies with ties to the world’s No. 1 economy, and Korea has become the first target.
If China continues targeting Korean firms with such export control measures, the fallout could significantly disrupt the growth of Asia’s fourth-largest economy, which is heavily reliant on exports, particularly in advanced manufacturing sectors such as semiconductors, batteries and electric vehicles.
Source: Kedglobal