Just in time for Christmas, China expanded its already tight restrictions on export of technology related to refining rare earth minerals. The most recent restrictions involve technology for making rare earth magnets which are used in electric motors and generators. These minerals are also used extensively in the automotive industry and in consumer electronics such as cellphones.FreepikI have previously written that the clean energy economy is a metals energy economy, and rare earths constitute a substantial and key part of that metals energy economy.Export of rare earth extraction and separation technology had already been banned by China. The most recent and previous restrictions are part of a broader trade war between the United States and China over exchange of technology.  In late 2022 the United States banned exports of advanced microchips. China responded with a ban on the export germanium and gallium, two metals crucial to the manufacture of advanced chips. The United States imports half of its germanium needs and all of the gallium it uses.What exactly are the Chinese hoping to achieve? The answer becomes pretty clear when you realize that China supplies 90 percent of the volume of refined rare earth metals to the world. The country produces 60 percent of the ore. That means the rest of the world is sending three-quarters of its ore to China for processing, and the Chinese would like to continue to enjoy its near monopoly on processing. That puts China in a commanding position to decide who will get these metals and even whether the rest of the world gets any at all. China unexpectedly and dramatically reduced its rare earth exports in 2010, driving prices skyward.The obvious response to such uncertainty would be to encourage the mining of rare earths outside of China. The current U.S. administration rolled out half of its germanium needs and all of the gallium it uses to incentivize U.S.-based mining of critical minerals such as lithium, nickel, graphite, cobalt and manganese. Many rare earths are already on what is known as the List of Critical Minerals and thus eligible for incentives to encourage domestic production. A small amount of funding has been allocated for this purpose.A private attempt to revive a closed rare earth mine, the largest in the United States, resulted in a colossal financial loss for the investors when rare earth prices plummeted after China resumed its previous level of exports following the reduction in 2010. This shows how China can easily sabotage any attempts to challenge its dominance of the rare earth market.Given the close relationship between China’s government and its rare earth industry, the only reasonable way to break the Chinese stranglehold on the rare earth market would be for governments to guarantee the price of rare earths mined by domestic companies. That runs so counter to the neoliberal free market ethic of the past 40 years that I don’t see it becoming a reality.In a world where the consensus regarding the free exchange of goods is breaking down and geopolitical interests are coming to the fore, China seems to care far less about living up to free trade rules than protecting its perceived national interests. If other major trading countries and blocks start moving in the same direction, the easy availability of cheap goods and resources produced in faraway locales may become increasingly problematic.More By This Author:Climate Change And The Hidden Water Cost Of The Panama Canal Thinking About A World Of Scarcity Faster And Faster: The Pace Of Climate Change Keeps Surprising Us