(Houston/London Reuters) The U.S. House Select Committee on China has accused China of attempting to manipulate global prices for critical minerals for decades, using its control of the market as an economic weapon to expand its manufacturing sector and enhance its geopolitical influence.
Former President Biden and current President Trump have been trying to weaken China's dominance in critical minerals.
In a 50-page report released Wednesday (November 12), the Select Committee recommended mineral price controls and stronger government oversight of price reporting agencies, aiming to codify presidential executive orders into law.
"China has a loaded gun aimed at our economy, and we must act quickly," said the committee's Republican chairman, Mullenar.
He argued that China's actions have led to job losses, forced American miners into bankruptcy, and jeopardized national security.
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The report, endorsed by Democratic ranking member Krishnamurti, states that China, as the world's largest processor of most critical minerals, makes it nearly impossible for the US and its allies to determine the actual prices of certain metals, including rare earth elements.
The report also notes that many minerals are traded on the London Metal Exchange (LME), but the LME is owned by the Hong Kong Stock Exchange (HKEX), making it potentially susceptible to Beijing's influence.
The report states, "The LME claims its prices 'truly reflect global supply and demand,' but with the HKEX being overseen by the Chinese government, it is difficult to determine whether its published prices truly reflect global supply and demand."
In response, the LME stated that it is subject to UK law and regulation. A spokesperson said, "All critical prices on the LME are based on transparent trading by international participants."
However, the committee's report accuses China of specifically targeting the lithium and rare earth industries, manipulating prices to boost its own economy.
The report states, "Whenever lithium prices rise, the Chinese government takes action to push prices down."
The report makes 13 recommendations, some of which have been adopted by Trump, such as appointing a critical minerals commissioner.
The committee stated that the report's purpose was not to address all issues, but rather to foster discussion. "A single policy cannot adequately address the serious challenges facing the United States in the critical minerals sector; therefore, we must adopt a multi-pronged approach."
The Chinese Embassy in the United States did not immediately respond to media requests for comment, but China has previously accused the United States of distorting and exaggerating Beijing's controls on rare earth exports and creating panic on related issues.
