Ahead of the Malaysia talks, both Beijing and Washington were already building leverage of their own.
On October 22, China’s Ministry of Commerce’s Bureau of Trade Remedy Investigation issued a notice to distribute questionnaires for an anti-dumping probe into simulation chips, targeting general interface chips and gate driver chips originating from the United States. Stakeholders were required to submit complete and accurate responses within 37 days.
On October 21, China’s Minister of Commerce Wang Wentao met with Airbus CEO Guillaume Faury in Beijing to discuss Airbus’s cooperation with China.
During the meeting, Wang expressed hope that Airbus would use the launch of the second A320 final assembly line in Tianjin as an opportunity to further deepen its cooperation with China, providing more high-quality aviation products and services for both China and the world. He also pledged that the Chinese side would actively work to address the issues and concerns Airbus has encountered in its operations in China.
It is noteworthy that the meeting took place at a time when President Trump had repeatedly stated that the United States still has many cards to play against China, specifically mentioning the possibility of banning exports of aircraft engines and components to China.
Minister of Commerce Wang Wentao met with Airbus CEO Guillaume Faury
Wang noted that China’s market has continued to expand steadily, now ranking as the world’s second-largest consumer and import market. As China advances Chinese modernization and develops new quality productive forces, it will offer broader opportunities for foreign investors, including Airbus. He expressed hope that Airbus would build on the launch of the second A320 assembly line in Tianjin to further deepen cooperation with China and provide more high-quality aviation products and services for China and the world.
Wang also emphasized that amid rising global economic fragmentation and protectionist shocks to international trade, China will continue to make full use of the foreign enterprise roundtable mechanism to help resolve operational challenges and concerns faced by Airbus and other foreign companies, and to jointly safeguard stable global industrial and supply chains.
Faury said Airbus remains confident in China’s economy and aviation market, and that the commissioning of the second A320 final assembly line in Tianjin provides favorable conditions for expanding cooperation. He reaffirmed Airbus’s commitment to deepening its presence in China and contributing to China–France and China–EU economic and trade relations.
On October 20, an open letter titled “Report on Apple Inc.’s Abuse of Market Dominance” began circulating online, attracting widespread public attention.
In the letter, 55 Chinese consumers, represented by Wang Qiongfei and Tian Junwei, filed an administrative complaint with the State Administration for Market Regulation (SAMR), accusing Apple of abusing its market dominance by restricting app distribution and payment channels and charging excessive commissions. The complainants requested that the authorities open an investigation into Apple’s alleged violations.
According to a report by Observer.com (Guancha), the letter also outlined three specific demands for Apple:
Open third-party payment channels beyond Apple’s In-App Purchase (IAP) system for Chinese consumers, and waive all commissions or fees on such third-party transactions.
Allow iOS apps to be obtained through channels other than the Apple App Store, and prohibit Apple from charging any commission, technical service fee, or related costs for app distribution outside the App Store.
Reduce Apple’s commission rates on in-app digital goods and services in China, and ensure that the rate is lower than Apple’s most favorable rates in any other country or region worldwide.
This incident may not have the backing of the Chinese government and appears to be largely a spontaneous action by consumers, though its timing is highly sensitive.
Just a few days earlier, Apple CEO Tim Cook had attended the 2025 Advisory Board Meeting of Tsinghua University’s School of Economics and Management (SEM) in Beijing on October 17. On October 16, he and other board members were received by Vice Premier He Lifeng at the Diaoyutai State Guesthouse.
According to Tsinghua’s press release, Cook, as Chair of the Advisory Board, delivered remarks expressing his strong confidence in China’s development prospects and commitment to deepening Apple’s presence in the Chinese market, with plans to continue expanding investment and cooperation in China.
Reports also noted that on the evening of October 16, Wang Qishan, former Vice President of China and Honorary Chairman of the Tsinghua SEM Advisory Board, met and hosted a banquet at the Diaoyutai State Guesthouse for Cook and other board members.
Today, Reuters reports surfaced that the Trump administration was considering a sweeping ban on all exports of software-enabled products to China — from laptops to jet engines — as retaliation for Beijing’s latest round of rare earth export restrictions.
Trump wrote on Truth Social on October 10 that “If China doesn’t roll back its latest escalation measures, the U.S. will impose export controls on any and all critical software starting November 1”.
At the time, many assumed “critical software” referred mainly to EDA tools essential for chip design. Back in May, the U.S. Commerce Department had instructed Cadence, Synopsys, and Siemens EDA to stop supplying controlled EDA software to China. Following the London talks, those restrictions were reportedly put on hold.
Several U.S. research and policy analyses have noted that, under export controls, Chinese firms might attempt to pirate or circumvent EDA access. But EDA suites are deeply complex, modular systems — covering the full flow from RTL design and logic synthesis to verification and layout extraction — and heavily depend on foundry PDKs (process design kits) that are frequently updated and license-verified. Pirated versions quickly become unusable. Some firms have tried workarounds, such as setting up shell companies in Singapore or Hong Kong to purchase licenses as “third-country clients,” or renting overseas cloud servers to use EDA tools remotely in non-Chinese environments.
However, judging from Reuters’ report today, Trump’s reference to critical software likely extends far beyond EDA tools. Given the ubiquity of American software worldwide, this new “software FDPR,” mirroring China’s “rare earth FDPR”, could again put global companies in a bind.
In an interview with Fox Business News, Scott Bessent indicated that the potential “software FDPR” as reported by Reuters, is part of the U.S. response under consideration if the talks doesn’t go well.
Larry:
There’s a lot of market and stock turbulence, a lot of rumors — I don’t quite know how to describe it. A U.S. official and three people briefed by U.S. authorities say the White House is weighing a bunch of export controls on China — software, laptops, jet engines — to retaliate against rare earths. This was originally a Reuters story; other news outlets have picked it up. I have no idea whether there’s any validity to it, but I wondered if you wanted to comment. I know you’re meeting with the Chinese very soon.
Bessent:
Yep. So, Larry, good to be back with you. I’m leaving this evening. Jamison Brewer is already on his way to Kuala Lumpur, and in Malaysia this Saturday and Sunday we’re going to be meeting with our Chinese counterpart, Vice Premier He Lifeng.
And you know, you just talked about some of the potential export controls we may impose, but the Chinese announced on October 8th this wide-ranging export control on rare earths — excuse me, rare earth elements — all over the world. This is China versus the globe, not just China versus the U.S. And I can tell you that the licensing regime they proposed is unworkable and unacceptable.
So we are contemplating — if we’re not able to negotiate, create a pause, or find relief on this regime — how the U.S. and its allies would respond.
Larry:
So this will be part of your discussions, and then presumably part of the discussions between President Trump and President Xi?
Bessent:
Larry, I’m hoping that we can get this ironed out this weekend so that the leaders can enter their talks on a more positive note. President Trump has great regard for Party Chair Xi — they’re in frequent contact — and it would be a shame if their first in-person meeting during President Trump’s second term focused on trying to get past problems rather than moving toward more constructive dialogue between the U.S. and China.
Larry:
So just to clarify — nothing is set in stone. This will be part of the negotiations you’ll be conducting on behalf of the President?
Bessent:
Exactly, Larry. But, you know, all options are on the table. I’m optimistic — we’ve had successful de-escalations before. We’re going to have two days of very fulsome talks. This will be the fifth meeting we’ve had — we’ve been to Geneva, London, Stockholm, Madrid — and now we’re moving to Asia, to Kuala Lumpur. There’s also the Asian conference going on.
We’ll then be traveling with the President to Japan to meet the new Prime Minister — she’s a protégé of former Prime Minister Abe, with whom the President was very close — so I think they’ll have a very good relationship. Then we’ll be moving on to the APEC conference in Korea, where the President is currently scheduled to have a pull-aside with Xi.
Meanwhile, China’s upgraded rare earth export controls have already drawn EU concern.
On October 21, Chinese Commerce Minister Wang Wentao held separate video calls with Dutch Economic Affairs Minister Karremans and European Commission Executive Vice President Maroš Šefčovič.
During his call with Šefčovič, Wang said China’s recent rare earth export measures were a normal adjustment to improve its export control regime and that Beijing had consistently facilitated approvals for EU companies. Šefčovič said the EU understood China’s reasoning and hoped Beijing would speed up the approval process. The two sides agreed to hold an Export Control Dialogue in the coming days.
Chinese Readout (Unofficial Translation)
On October 21, Minister of Commerce Wang Wentao held a video meeting with European Commission Executive Vice President for Trade and Economic Security Maroš Šefčovič at Šefčovič’s request. The two sides had an in-depth exchange of views on export controls, the EU’s anti-subsidy investigation into Chinese electric vehicles, and other key issues in China–EU economic and trade relations.
Wang noted that the 25th China–EU Leaders’ Meeting was successfully held in July, and that Premier Li Qiang met again with European Commission President Ursula von der Leyen in September. China is ready to work with the EU to implement the economic and trade consensus reached by the leaders and to promote the sound and stable development of China–EU economic ties.
Regarding the rare earth export control measures, Wang stressed that China’s recent actions are a normal step in improving its export control regime in accordance with laws and regulations, reflecting China’s responsible role as a major power in safeguarding global peace and stability. China remains committed to ensuring the security and stability of global industrial and supply chains and has consistently facilitated export approvals for EU enterprises.
On the Nexperia issue, Wang reiterated China’s firm opposition to the overextension of the concept of “national security”, expressing hope that the EU would play a constructive role and urge the Dutch side to uphold the spirit of contracts and market principles, and to find an appropriate solution as soon as possible from the broader perspective of maintaining the stability of global supply chains.
Šefčovič said that the EU is willing to work with China to implement the leaders’ economic and trade consensus and properly handle trade frictions. He acknowledged China’s considerations regarding national and international security in introducing the rare earth export control measures, and expressed hope that China would accelerate approval procedures for EU firms. On the Nexperia issue, he said the EU was ready to facilitate communication between the Netherlands and China and help find a timely solution to jointly safeguard the stability of global supply chains.
Both sides agreed, in line with the consensus reached at the 25th China–EU Leaders’ Meeting, to convene an “upgraded” China–EU Export Control Dialogue in Brussels as soon as possible.
They also exchanged views on the EU’s anti-subsidy investigation into Chinese electric vehicles and other issues.
Maroš Šefčovič X post:
“I’ve invited China’s authorities to come to Brussels in the coming days to find urgent solutions on export controls. Minister Wang Wentao has accepted this invitation — and our teams will engage under the Export Control Dialogue, upgraded following the EU–China summit in July.”
Meanwhile, Bloomberg reported that the European Commission is preparing a list of trade measures by the end of the month that can later be deployed against China to boost its negotiating leverage in talks with China on critical raw materials and may use these trade options should the bloc fail to reach a diplomatic solution with Beijing.
German Chancellor Friedrich Merz expressed concerns on China’s rare earth export control during the EU summit in Brussels, and highlighted the need for Chinese leadership to recognize Europe’s discontent with the current situation concerning rare earth elements, emphasizing a desire to collaborate on a solution.
On October 20, Vice Minister of Commerce and Deputy China International Trade Representative Ling Ji chaired a special policy briefing roundtable with foreign enterprises in Beijing, attended by representatives from over 170 foreign companies and chambers of commerce in China. Officials from the Ministry of Industry and Information Technology, Ministry of Finance, and relevant departments of MOFCOM provided policy explanations and addressed the concerns raised by participating firms.
During the roundtable, Ling particularly explained Chin’s export control by stressing that China’s measures are “a responsible action to safeguard world peace and regional stability and to fulfill non-proliferation obligations, while also lawfully approving legitimate trade and maintaining the stability of global industrial and supply chains”.
On 21 October, the China Chamber of Commerce to the EU (CCCEU) recently translated and reposted in full, on its official WeChat blog, a Reuters report noting that as China’s rare earth export controls near their effective date, global automakers are scrambling worldwide to secure critical rare earth supplies.
Following the repost, the Chamber added its own commentary, making two key points:
First, it explained that China’s rare earth export controls are a countermeasure against the U.S. “50% rule”, and that Europe is merely caught in the crossfire. European companies, the Chamber said, need not be overly concerned, since rare-earth magnets used in the European automotive industry—as long as they are for legitimate purposes and filed through proper procedures—can still obtain export licenses through normal channels.
Second, the Chamber warned the EU to stay alert to U.S. manipulation, urging it to avoid blindly following Washington’s China-containment agenda at the expense of Europe’s own pragmatic interests. The statement argued that the U.S. is striving for rare earth self-sufficiency, which has little to do with Europe, while the EU remains heavily dependent on Chinese rare earths. The rational choice, it said, is to stay out of the U.S.–China rivalry vortex and take a pragmatic approach to safeguarding China–EU trade and economic cooperation.
The core of China’s recent rare earth export controls lies in the extension of the broader U.S.–China competition over technology and strategic resources, rather than being directed at Europe.
For years, the United States, under the pretext of “national security,” has imposed stringent export restrictions on China’s semiconductor and artificial intelligence industries. In September, the U.S. Department of Commerce introduced a new “penetration rule” for export controls, extending the same restrictions to subsidiaries more than 50% owned by entities listed on the U.S. Entity List.
As a countermeasure, China has lawfully imposed export controls on dual-use rare earth materials—a move that is both a responsible act of safeguarding national security and fulfilling international non-proliferation obligations, and a measured response to U.S. “decoupling” efforts.
While the U.S.–China technology rivalry inevitably affects Europe, European companies need not be overly concerned. China’s Ministry of Commerce has made clear that legitimate civilian-use export applications will continue to be approved. In particular, rare-earth magnets used in Europe’s automotive industry, so long as their uses are lawful and documentation complete, can still obtain licenses through regular channels.
The European Union should, however, remain vigilant against being drawn into Washington’s strategy, and avoid blindly following U.S. containment policies that could undermine its own pragmatic interests. In response to concerns about rare earth supply, the EU has been seeking multiple avenues to encourage China to ease its controls, but it must break free from its “U.S. dependence” trap.
On one hand, the EU plans to coordinate with G7 allies to apply pressure. Canada, for instance, intends to present a coordination plan at the G7 ministerial meeting in late October, including measures to accelerate rare earth stockpiling and promote joint mining projects, while the EU Trade Commissioner has also called for a collective G7 response. On the other hand, within the EU, efforts are being made to pursue “targeted dialogue,” seeking to secure rare earth supply assurances through trade and economic consultations with China.
The EU’s central dilemma lies in its overreliance on the United States. The U.S. government is simultaneously urging Europe to adopt a tougher stance toward China, while rapidly strengthening its own rare earth supply chain—expanding domestic production of rare earth concentrates and magnets—with the goal of achieving a “fully independent U.S. rare earth supply system.”
By contrast, the EU depends on China for 98% of its rare-earth magnets, and alternative sources in Sweden and Australia have faced slow progress due to environmental controversies and technical limitations. This reality means that confrontation with China would bring the EU no tangible benefit, and Europe should not be misled by Washington’s hardline rhetoric.
For Europe, the rational course of action is to stay out of the U.S.–China geopolitical confrontation and to preserve China–EU economic and trade cooperation with a pragmatic and independent approach.
Meanwhile, the Taiwan Affairs Office (TAO) in Beijing responded to media questions about the potential impact of China’s rare earth export controls on Taiwan’s semiconductor industry.
At a press conference on October 22, a Reference News reporter cited comments by TSMC Chairman Mark Liu, who said the company would accelerate expansion and upgrades at its Arizona plant. Foreign media, however, reported that the plant’s rare earth stockpile may last only 30 days, and production could halt without mainland supplies. Some in Taiwan argued that cross-strait cooperation in high-tech industries should be strengthened to reduce dependence on the United States.
TAO spokesperson Zhu Fenglian replied that the competent mainland authorities had already made their position clear on rare earth export controls. She noted that mainland China’s rapid development in high-tech sectors has created a strong foundation and broad space for cross-strait cooperation in emerging fields such as AI. She added that Taiwan’s semiconductor industry, once an area of strength, could have achieved better development through deeper cooperation with the mainland, but the DPP authorities have repeatedly “sacrificed” it for political gain.
“Public opinion in Taiwan reflects the consensus of the island’s business community and the broader population,” Zhu said. “The DPP’s policy of selling out Taiwan and relying on the U.S. has no future and wins no public support. The right path lies in moving toward the mainland, deepening cross-strait integration, and working together to withstand external risks and challenges.”
The Nexperia incident has further complicated the dialogue between China and the European Union, leaving the Dutch government in a difficult position.
Chinese Readout (unofficial English translation)
Minister Wang Wentao speaks with Dutch Minister for Economic Affairs Karremans
On October 21, at the request of the Dutch side, Chinese Minister of Commerce Wang Wentao held a phone call with Dutch Minister for Economic Affairs Karremans to exchange views on the Nexperia case and related issues.
Wang emphasized that China attaches great importance to China–Netherlands economic and trade cooperation, but that the measures taken by the Dutch side against Nexperia have seriously disrupted the stability of global industrial and supply chains. He urged the Netherlands to take the broader view of maintaining global supply chain security, to uphold the spirit of contracts, and to handle the case in a market-oriented and law-based manner so as to reach a proper resolution as soon as possible, protect the legitimate rights and interests of Chinese investors, and ensure a fair, transparent, and predictable business environment.
Karremans said the Netherlands highly values its economic and trade relations with China, and is willing to maintain close communication with the Chinese side to seek a constructive solution to the Nexperia issue.
Dutch Readout (unofficial English translation)
Phone conversation between Minister Karremans and Chinese Minister Wang
Minister Karremans (Economic Affairs):
“This afternoon, I spoke with Chinese Minister of Commerce, His Excellency Wang Wentao. We discussed further steps toward a solution that serves the interests of Nexperia, the European economy, and the Chinese economy. In the coming period, we will remain in contact with the Chinese authorities to work toward a constructive outcome.”
According to Reuters, a spokesperson for Germany’s Ministry of Economic Affairs also expressed concern over semiconductor supply chain disruptions caused by the Nexperia case during a regular government press conference in Berlin.
On 23 October, Nexperia China issued a statement regarding “the recent unilateral decision by its Dutch headquarters to remove Mr. Zhang Qiuming from his position as Vice President of Sales and Marketing.” The statement declares:
The decision made by the Dutch headquarters has no legal effect within China;
Mr. Zhang Qiuming’s position remains unchanged;
Actions taken by Mr. Zhang within his scope of authority represent Nexperia China;
Nexperia China’s operations remain normal, with all business activities, production, and external partnerships proceeding in an orderly and lawful manner, unaffected by any unilateral external decisions.
Background of the Nexperia Dispute
On September 30, the Dutch Ministry of Economic Affairs and Climate Policy, citing the 1952 Goods Supply Act, issued a ministerial decree freezing the assets, intellectual property, operations, and personnel changes of Nexperia’s 30 global entities for one year.
The following day, three foreign executives of the company jointly filed an emergency petition with the Dutch Enterprise Court, citing “corporate governance” issues. In a highly unusual move, the court suspended Nexperia’s Chinese CEO Zhang Xuezheng—also the founder of Wingtech Technology, Nexperia’s parent company—without a formal hearing, and placed Wingtech’s Nexperia shares under third-party custodianship.
A more dramatic turn came on October 7, when the court not only upheld Zhang’s suspension but also appointed a foreign national as non-executive director of both Nexperia Holding and Nexperia Semiconductor, granting him decisive voting rights. The entire process—from filing to ruling—took only seven days, a pace described by industry observers as a “legal blitzkrieg.”
Wingtech responded publicly, saying the company was actively communicating with suppliers and customers to maintain operational stability, while working with international law firms to explore legal remedies and take all necessary actions to protect the interests of the company and its shareholders. It also confirmed engagement with relevant government departments to seek support.
On October 14, Nexperia announced that China’s Ministry of Commerce had issued an export control notice on October 4, prohibiting Nexperia’s Chinese subsidiaries and subcontractors from exporting certain finished components and subcomponents produced in China.
That same day, the China Semiconductor Industry Association released a statement condemning the “abuse of national security concepts” and discriminatory restrictions imposed on overseas branches of Chinese companies.
Although Nexperia does not produce advanced processors, its products—diodes, transistors, and power MOSFETs—are critical components in virtually all modern vehicle control systems.
By October 16, Western auto industry associations had begun issuing warnings that the chip supply crisis was spilling over to U.S. automakers. The European Automobile Manufacturers’ Association (ACEA) confirmed that several carmakers had received notices from Nexperia about delivery uncertainties. The Alliance for Automotive Innovation in the United States also urged all parties to resolve the supply chain crisis quickly.
“The automotive industry evolves at a rapid pace — if Nexperia shuts down, the impact will be systemic,” a semiconductor industry insider told Phoenix Technology.
On October 18, media reports from Nexperia’s Dongguan factory revealed that after the National Day holiday, the plant had begun restricting shipments and would shift to a “four-days-on, three-days-off” schedule starting the following week. Distributors reported tightening supply and rising prices for Nexperia components.
Wingtech told reporters that, given the emergency, Europe might cut off systems or funds, forcing its China division to take independent contingency measures, strengthen domestic supply chain coordination, and secure deliveries to Chinese customers.
During an October 12 investor briefing, Wingtech CFO Shen Jinjia said the company had filed for administrative reconsideration and lawsuits against the Dutch government’s order and would pursue multi-dimensional countermeasures—including invoking the China–Netherlands Bilateral Investment Treaty to seek international arbitration over the “unfair treatment” of Chinese investors in the Netherlands.
Nexperia’s China unit reassured employees in an internal letter that all domestic operations, salaries, and benefits remain normal, and that production and business activities are proceeding as usual. The board and management, it said, are fully committed to maintaining normal operations and protecting employee interests.
Inside Nexperia, employees expressed strong solidarity. Several staff members told Phoenix Technology,
“We’re staying united and confident in the company — for now, we’re not making any public statements.”
https://open.substack.com/pub/thiagodearagao/p/the-five-plays-behind-chinas-resource?r=2di31u&utm_medium=ios