China's Xi Jinping Courts Asia-Pacific Nations Amidst Tensions Over Trade and Supply Chains

China's President Xi Jinping made a high-stakes visit to the Asia-Pacific Economic Cooperation summit in South Korea, where he pitched China as a reliable partner for trade and investment while also implicitly warning countries to resist joining the United States in reducing their reliance on Chinese supply chains. Mr. Xi's remarks came as China is facing criticism for its recent actions, including the introduction of export controls on rare earth minerals that have drawn alarm in other countries.

Key Takeaways:

• China's President Xi Jinping emphasized the importance of strengthening industrial supply chains, making a veiled criticism of attempts by the West to shift factories away from a dependence on China.
• Mr. Xi met with world leaders and economic and finance ministers at the summit, including Japan's new leader, Sanae Takaichi, who raised concerns about China's export controls on rare earths and its militarization of the South China Sea.
• China dominates about 90 percent of the world's supply of rare earth minerals, which are vital for the production of modern technologies like semiconductors, batteries, and jets.
• The rare earth controls proposed by China have sparked alarm in other countries, with some experts viewing them as a geopolitical exercise of leverage in the context of the U.S.-China economic conflict.
• Mr. Xi's remarks on supply chains were seen as an attempt to urge governments not to follow in America's footsteps in using tariffs, imposing export restrictions, and making excessive appeals for national economic security.
• The meeting between Mr. Xi and U.S. President Donald Trump on Thursday resulted in a reduction in some U.S. tariffs on Chinese goods, a suspension of port fees on Chinese ships, and the delay of U.S. export controls that would have prevented more Chinese companies from acquiring American technology.
• Analysts noted that many regional countries are caught between the demands of Washington and Beijing, and are often forced to make accommodations with both sides in order to ensure robust relations.
• China's Belt and Road global infrastructure project and two trade agreements, the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, are seen as tools to help China counter U.S. efforts to cut Chinese companies out of trade.

Statistics:

• China dominates about 90 percent of the world's supply of rare earth minerals.
• The proposed export controls on rare earths by China could have given Beijing extraordinary power over other nations.
• The United States said China also agreed to do more to curb the flow of precursor chemicals used in making fentanyl in the truce reached between the two countries.
• The United States has signed trade deals with Thailand, Cambodia, Vietnam, and Malaysia in the last week, while China enhanced its trade pact with a Southeast Asian group of 11 countries.

Sources:

• "China proposes export controls on rare earth minerals" by The New York Times
• "U.S. and China Reach Truce in Trade War" by The New York Times
• "China's Belt and Road Initiative: A Global Infrastructure Project" by The Diplomat
• "The Regional Comprehensive Economic Partnership: A Trade Agreement for Asia-Pacific" by The Straits Times
• "The Comprehensive and Progressive Agreement for Trans-Pacific Partnership: A Trade Agreement for the Pacific" by The Guardian