[Beijing, Beijing, China] Halt diplomatic visits — CHINA → PRESIDENT

Supply-chain Risk Briefing

1. Summary

A diplomatic expulsion incident occurred in Beijing, China, escalating diplomatic tensions. With 8 media outlets reporting and a tension index of -4, bilateral relationship deterioration is a concern. As China is a major raw material supplier, diplomatic conflicts could potentially spill over into global supply chains.

2. Supply-chain impact

• Rare earth and lithium supply instability: China accounts for over 60% of global rare earths and 70% of lithium processing, raising concerns of electric vehicle and renewable energy industry impacts during diplomatic conflicts
• Semiconductor raw material procurement disruptions: High dependence on China for tungsten, copper and other core semiconductor manufacturing raw materials could create global electronics industry supply chain bottlenecks if export restrictions are imposed
• Increased volatility in iron ore and copper prices: Risk of international raw material price surges due to supply-demand imbalances in basic metals where China is the largest consumer
• Cotton trade contraction: Increased pressure for procurement diversification in global textile and apparel supply chains connected to China's cotton industry
• Accelerated strategic material stockpiling: Intensified competition to secure non-Chinese supply sources as countries pursue policies to enhance critical mineral self-sufficiency

3. Watch points

• Additional sanctions announcements: Whether bilateral trade sanctions or export control reinforcements will directly impact raw material markets
• Alternative supply chain development trends: Major consuming countries' efforts to secure non-Chinese supply sources and strategic partnership formations