Asia Communique

China Tightens Rare-Earth Curbs Before Trump–Xi Talks | China, N. Korea Pledge Closer Coordination | Taiwan Unveils “T-Dome” Defense Plan

This week’s developments highlight the shifting dynamics in East Asia — Taiwan unveiled its new “T-Dome” defence system, China and North Korea pledged tighter coordination, and Beijing moved to tighten rare-earth export controls ahead of possible Trump–Xi talks. In this edition, I unpack Taiwan President Lai Ching-te’s Double Ten Day speech.

China Expands Rare-Earth Controls Ahead of Trump–Xi Talks

Beijing has dramatically widened its export controls on rare earth elements—tightening its grip over a critical global supply chain just weeks before Presidents Donald Trump and Xi Jinping are set to meet in South Korea.

China’s Ministry of Commerce on Thursday added five new elements—holmium, erbium, thulium, europium and ytterbium—to its export-control list, bringing the total number of restricted rare earths to 12. The new rules also extend licensing requirements to foreign companies that use Chinese-sourced materials or equipment, even if no Chinese entity is involved in the final transaction.

With these sweeping restrictions, Beijing is seeking to block all channels of rare-earth transshipment, including routes passing through India.

Beijing simultaneously placed dozens of refining technologies under control and introduced a new compliance regime for overseas users, mirroring U.S. extraterritorial chip restrictions. The curbs will take effect in two phases: the element and equipment restrictions on November 8, and the foreign-producer rules on December 1.

“This is about leverage ahead of the anticipated Trump–Xi summit,” said Tim Zhang of Singapore-based Edge Research.

China accounts for more than 90 percent of global processed rare-earth output, essential for EVs, aircraft engines, and advanced radar systems. Analysts warn the move could deepen the bifurcation between Chinese and Western technology ecosystems.

“We’re entering a period of structural decoupling,” said Neha Mukherjee of Benchmark Mineral Intelligence. “China will localize its value chain while the U.S. and allies accelerate theirs.”

Markets reacted instantly. Shares of China Northern Rare Earth, China Rare Earth Resources & Technology, and Shenghe Resources all surged about 10 percent. U.S. producers Critical Metals Corp, Energy Fuels, MP Materials, and USA Rare Earth rallied between 2 and 25 percent, reflecting bets on new demand for non-Chinese supply.

Beyond materials, the ministry confirmed that overseas defense users will be denied export licenses, while applications tied to advanced semiconductors (14-nm and below, or memory chips ≥ 256 layers) will face case-by-case scrutiny—an implicit warning to South Korea’s Samsung and SK Hynix, and to Taiwan’s TSMC.

The timing is pointed: the new rules arrive just before a 90-day U.S.–China trade truce expires, tightening Beijing’s control over what one American official called “the world’s technology arteries.”

China and North Korea Vow Closer Coordination Amid Shifting Regional Order

Chinese Premier Li Qiang met North Korean leader Kim Jong Un in Pyongyang on Thursday, pledging to deepen political and economic cooperation while expanding coordination in regional and global affairs, according to Xinhua News Agency.

Li, conveying President Xi Jinping’s greetings and marking the 80th anniversary of the Workers’ Party of Korea, said Beijing is ready to “strengthen high-level exchanges, strategic communication, and practical cooperation” with Pyongyang. He urged both sides to “firmly safeguard and practice multilateralism” and to promote an international order that is “more just and equitable.”

Kim Jong Un responded that deepening ties with China remains an “unwavering stance” of the DPRK’s leadership, regardless of changing global dynamics. He called for closer coordination with Beijing across “various fields,” signaling continued alignment with China amid tightening Western sanctions and growing trilateral security cooperation among the United States, Japan, and South Korea.

The meeting underscores China’s renewed diplomatic outreach to its northeastern neighbor as both countries face strategic pressure from Washington and its allies. Analysts note that Li’s visit—his first to Pyongyang since taking office—comes as Beijing seeks to stabilize its regional partnerships and demonstrate solidarity against perceived Western containment.

Taiwan to Build “T-Dome” Air Defence System as Lai Calls on China to Renounce Force

October 10 — known as Double Ten Day — marks the National Day of the Republic of China (Taiwan). In recent years, the occasion has evolved into a key moment in cross-strait relations, with Beijing watching closely for any signals in Taipei’s statements about the state of affairs across the Taiwan Strait. This year was no exception.

But unlike some of the more provocative speeches in the past, President Lai largely avoided addressing China head-on. "

“At present, countries around the world are experiencing profound changes and challenges, and Taiwan is no exception. In addition to the Russia–Ukraine war, instability in the Middle East, and China’s ongoing military expansion, Taiwan also faces the impact of U.S. tariff policies on its economy and industries,” President Lai Ching-te said in his Double Ten Day speech.

Meanwhile, Taiwan President Lai Ching-te announced plans to build a new “T-Dome” air defence system to provide multi-layered protection against growing threats from China. Speaking at Taiwan’s National Day celebrations on Friday, Lai said the system would combine advanced detection, interception, and defence capabilities to safeguard citizens’ lives and property.

Here is the full translation from Lai’s comments on the “T-Dome” defense system:

First, we will accelerate the construction of the “T-Dome,” Taiwan’s Shield, to build a rigorous air defense system featuring layered protection, advanced detection, and effective interception, weaving a safety net to safeguard the lives and property of the Taiwanese people.

Second, we will strengthen the integration of high technology and AI to develop an intelligent defense and combat system that enhances the deterrence power of our asymmetric warfare strategy.

Third, we will continue investing in defense innovation and technology, working with advanced nations and their defense industries to reinforce Taiwan’s own defense and industrial capabilities. Through local research, design, and production, we will deepen domestic supply chains, accelerate industrial upgrading, strengthen the resilience of our armaments, and boost our defense-industrial capacity. In doing so, Taiwan aims to become a trusted security partner among like-minded allies, jointly eliminating “red supply chains” and building defense trust among free and democratic nations, to construct a robust line of defense that protects shared democratic values.

The announcement comes amid heightened military and political pressure from Beijing, which continues to view Taiwan as its territory. Lai reaffirmed his administration’s plan to increase defense spending and introduce a special military budget later this year to strengthen domestic defense industries.

These remarks may seem provocative to some observers, but Lai largely steered clear of contentious issues regarding Taiwan’s status and avoided language that Beijing labels as “separatist.” As a result, China is unlikely to escalate tensions in response to this year’s speech—a contrast to previous occasions when Lai’s direct comments toward Beijing triggered sharper reactions.

We also need to remember that Washington has made strong demands for Taiwan to increase its defense spending. The target audience of Lai’s speech not only Beijing but also the U.S.

John Noh, the nominee for assistant secretary of defense for Indo-Pacific security affairs, recently addressed Taiwan’s defense spending at his confirmation hearing.

“It was President Trump who said that Taiwan, which is an island that faces an existential threat from the People’s Liberation Army, from the Chinese military, that Taiwan should spend upwards to 10 percent of its GDP on defense. I strongly support that,” Noh said.

Taiwan also faces a difficult balancing act, as not every Chinese military exercise now prompts a public response from Washington. As the Trump administration seeks to lower regional military tensions, Taipei has become more selective in disclosing Beijing’s military activities, carefully weighing when and how to highlight such maneuvers.

My assessment is that Beijing has come to recognize that its usual overt and highly publicized military exercises have failed to achieve the desired shift in public opinion within Taiwan. As a result, Beijing is now pursuing its military objectives below the threshold of escalation, advancing them quietly rather than relying on public displays to influence sentiment as it once did.

Thank you for reading!