China is considering striking back against US chip sanctions by prohibiting the export of certain rare-earth magnet technology crucial to electric vehicle motors.

The US and Japan have both banned the export of advanced semiconductor technology to China, in a move driven both by political tensions, and America’s wish to shore up its own production lines, to reduce reliance on China.

China, however, wishes to become a manufacturing superpower. According to a Nikkei Asia source in the resources industry, China is “likely going to use rare earths as a bargaining chip since rare earths are a weak point for Japan and the U.S.”

China controls 70 per cent of the rare-earths market, used in magnet technology with numerous manufacturing uses.

China’s commerce and technology ministries has proposed 43 amendments or additions to the country’s technology export restriction list, including a move to ban or restrict exports of technology to process and refine rare-earth elements, and proposed provisions to prohibit exports of alloy tech for making high-performance magnets derived from rare earths.

“Japan intends to endeavor to strengthen supply chains for critical minerals and other commodities,” Japanese Chief Cabinet Secretary Hirokazu Matsuno told local reports.

“We’ll continue to closely monitor the institutional impact from China.”