Speculation has arisen that China will respond to U.S. sanctions on its banks by restricting rare earth exports.
On August 27, President Donald Trump, speaking to reporters at the White House, was asked whether he would sanction Chinese banks that conduct business with Iran. He replied, "Who said I’m not doing it?" He added, "You don’t know if I’m sanctioning or not," suggesting the possibility of sanctions as part of increased economic pressure on Iran.
The South China Morning Post reported on August 28 that if the U.S. imposes sanctions on Chinese financial institutions or companies due to Iran, China is likely to respond more aggressively. Shiu Tianchen, chief economist at the Economist Intelligence Unit, stated, "If the sanctions are limited to small and medium-sized enterprises, China’s retaliation may be symbolic. However, if the scale of sanctions increases, China will take corresponding measures." He noted, "China has the ace of rare earth export controls, and it is this card that makes the U.S. hesitant to impose sanctions on China."
Professor Chui Shoujun from Renmin University predicted that despite U.S. sanctions, China will continue to purchase oil from Iran. He added, "If U.S. sanctions are implemented, China may enforce stricter controls on rare earth exports and enhance scrutiny of end users, which would limit the flow of Chinese rare earths to U.S. defense or high-tech companies." He also mentioned that China might expand its cross-border yuan payment system, CIPS, to mitigate risks from U.S. sanctions.
Previously, China has clearly stated its opposition to U.S. sanctions against Iran. On August 25, Chinese Foreign Ministry spokesperson Lin Jian said during a regular briefing, "Cooperation between China and Iran has always been conducted within the framework of international law and should not be interfered with or obstructed. China is closely monitoring the situation and will take all necessary measures to firmly safeguard its interests." Lin also reiterated that China firmly opposes illegal and unilateral sanctions that lack legal basis and have not been approved by the United Nations Security Council, adding that the most urgent task is to ease tensions and return to dialogue and negotiation.
* This article has been translated by AI.
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