License Raj Returns — in China This Time

License Raj is back.

Not in India, but in China this time.

The OG communists.

Let me explain:

China has restricted exports of rare earths - the elements behind every modern technology: EV motors, wind turbines, smartphones, chips, and AI servers.

China controls almost 90% of global refining of rare earth elements and now they won't allow countries to use these without its permission.

What does it mean?

It could slow the world’s AI and semiconductor growth, at least for a while.

China might be doing this to buy time to catch up in deep tech while the west scrambles for new supply chains.

Would be interesting to see how US retaliates. Trump has already posted quite a long rant on Truth Social.

As Deng Xiaoping once said

“The Middle East has oil; China has rare earths.”

Rare earths are the new oil.

And Beijing just found its OPEC moment.

Whether this becomes a short-term supply shock or a long-term realignment will depend on how quickly the West builds alternative refining capacity - a process that could take years, not months.

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