What would be the negative consequences for China for a rare earth metal ban?

Question

https://unherd.com/thepost/what-chinas-rare-earth-metal-ban-means-for-the-west/

China is threatening an export ban on rare earth metals in response to Washington’s recent decision to impose restrictions on exports of high-end semiconductors to Beijing. This is not the first time that China has mooted such a ban, with rumours circulating since at least 2019 as well as formal threats in 2021.

What would be the negative consequences for China for a rare earth metal ban? China kept threatening a ban, but they never did anything about it, so what would be the negative consequences of such a ban and do they outweigh the benefits? They used it against Japan before, so I don't understand why they won't use it against Japan and the Netherlands.

Answer 1

First a little background on rare-earth from wikipedia. China currently dominates rare-earth mining and has something like 80% world market share. However rare-earth do occur in mineable quantities in various places on earth. So in the short term a Chinese export ban would massivly reduce the available quantities but in a time frame of say 5 or 10 years other countries could replace China.

This means China currently profits from a dominant market position economically over time and they have the option to use it for political preasure by threatening an export ban but essentially they can impose such a ban only once and then other countries would replace them on the global markets.

Additionally in the context you describe the Chinese goal is not actually to deny Western countries the rare-earths, that would only be a means to an end, they want the import restrictions on semi-conductors to be lifted or reduced. To achieve that just threatening the export restrictions on rare-earth may be enough. It is a negotiation and having no restrictions on both semi-conductors and rare-earth is more desirable than having restrictions on both.