Biden Signs Presidential Order to Bolster Rare Earth and Chip Industries

The US President Biden is set to sign an executive order to accelerate efforts to build supply chains for rare earth, chip, battery and other strategically significant products that are less reliant on China, in partnership with the likes of Japan and South Korea, according to Japan media.

Japan's "Nikkei Shimbun" reported that according to the draft executive order is obtained, U.S. President Biden ordered the development of a national supply chain strategy as soon as the end of this month, cooperating with Japan, South Korea, Australia and other allies in rare earth, chip, battery and other strategically important products, reduce dependence on China.

The United States plans to build a framework to quickly share relevant products in emergencies, and will discuss safeguarding inventory and production capacity. The United States may require partners to reduce business dealings with China.

The order states that "working with allies can lead to strong, resilient supply chains," suggesting that international relationships will be central to this plan. Washington is expected to pursue partnerships with Japan and South Korea in chip production and Asia-Pacific economies including Australia in rare earths.

One expert said in an interview with this station that the United States is worried that mainland China will surpass them in many cutting-edge technologies, so it hopes that China will not be able to move forward. He believes that the United States has always wanted to decouple from China, but at a high price. Biden has just come to power and cannot be too different from former US President Trump on the issue of China. However, he believes that Biden is more sensible and will not collide with China.

American political risk management consultant Ross Feingold told the station that Biden wanted to launch these strategies because he had different pressures since he came to power, and he wanted to prove that his attitude towards China would not be too weak.

In rare earths, the U.S. is teaming with Australia to work around China's dominance. Australian rare-earth miner Lynas is building a processing facility in Texas with financial support from the U.S. Department of Defense.

Electric-vehicle batteries are another area where the action is needed, as Panasonic and South Korea's LG Chem lose market share to Chinese rivals. But in other fields, such as 5G, new supply chains may prove expensive for American and Japanese companies that lose access to cost-competitive Chinese suppliers like Huawei Technologies.

At present, according to the calculation of the United States Geological Survey, about 80% of the rare earth in the United States are imported from China; as much as 90% of medical supplies are also imported from China. "The Wall Street Journal" published an article last year that it is expected that by 2030, mainland China will become the world's largest semiconductor production plant.

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