GANZHOU, China — In Ganzhou, a critical mineral hub in southern China which has found itself in the middle of U.S.-China trade tensions, history seems to be repeating itself.
Nearly a century ago, amid a brutal civil war, the Chinese Communist Party established a tungsten mine here and traded the minerals for necessities such as medicine and guns to fuel their fight. It was from Ganzhou, a few years later, that the party launched its Long March — a historic trek which has become a symbol for bravery and struggle in China — and went on to eventually win the civil war.
Today, this region, which analysts liken to the West Virginia of China, has become central to a very different type of battle: As Washington wages a volatile trade war against Beijing, the Communist Party is again using Ganzhou’s natural resources as a powerful bargaining chip.
“Rare earths and tungsten are now hot topics — the trade negotiations seem mostly focused on rare earths,” said Liu Xiaoming, who used to work in the tungsten industry and then founded the Museum of the World Tungsten Capital in Ganzhou.
Since President Donald Trump returned to office in January and quickly began imposing tariffs, Beijing has used ever-tightening export controls on rare earths and critical minerals, which are crucial for the global economy and for militaries across the world, to retaliate.
Tungsten — crucial for defense and manufacturing products — was among the first economic weapons Beijing wielded: It implemented export controls on tungsten in February, resulting in a shock to the global market and tungsten prices doubling.
Trump and Chinese leader Xi Jinping agreed to ease tensions in a summit in October, with Beijing agreeing to pause the implementation of some rare earth restrictions by one year. While Trump quickly claimed victory on the important sticking point, experts say he overstated his success: Beijing has not paused all the controls, and it could easily deploy the policies again to exert diplomatic pressure.
“The idea that this has been resolved is wildly premature,” said John Delury, a historian of modern China and senior fellow at the Asia Society. “They have put the gun back in the holster, but they still have the gun.”
Many restrictions remain in place, despite the détente: Tungsten, for instance, is still subject to export controls. This puts Ganzhou — which is sometimes called the “tungsten capital of the world” — smack in the middle of the superpower showdown.
China produces more than 80 percent of the world’s tungsten, more than a third of which is from Jiangxi province, where Ganzhou is located. The ground here is also rich in heavy rare earths, accounting for a large share — as much as 80 percent for some minerals — of China’s deposits.
Tungsten is very dense and heat resistant, making it a useful material for military applications — such as armor-penetrating ammunition and radiation shielding in nuclear submarines — as well for machinery such as drill bits and cutting tools, which are needed for almost every manufacturing process.
“In indirect ways, tungsten facilitates every part of our daily lives,” said William Parry-Jones, founder of Wolfram Advisory, a tungsten-focused consultancy, who has traveled to Ganzhou many times.
Since implementing controls on tungsten in February, China has granted some export licenses, Parry-Jones said, but he does not know of any U.S. firm to have received one. And while China’s dominance in the rare earth supply chain largely stems from the processing stage, its control over the tungsten industry comes from the natural reserves in the ground — making it harder for Washington to break Beijing’s stranglehold.
“Beijing knows that it is under-recognized that tungsten is important to everything,” Parry-Jones said. “I think they will play to that strength.”
A new Long March
Ganzhou, a city of wide avenues and drab buildings, isn’t only known for its mineral deposits. It also played a key role in the Communist Party’s origin story: Communist forces, led by Mao Zedong, formed a stronghold here in the 1930s, during the civil war. Then they set off for their 6,000-mile-long march.
A riverside park outside Ganzhou now marks their departure point. On a recent gray morning, groups of elderly Chinese people filed out of tour buses to take pictures in front of towering stone monuments and billowing Chinese flags.
Xi has also paid homage to this revolutionary history.
In 2019, as the trade war during Trump’s first term escalated, Xi made a trip to Ganzhou and visited Long March memorials and descendants of Red Army fighters. He also stopped by one of Ganzhou’s largest rare earth companies, JL MAG Rare-Earth, where he was photographed touring the factory and learning about the production process.
“Now there is a new Long March, and we should make a new start,” Xi said on the trip, according to state media.
Delury said the historic resonance of the Ganzhou tour was striking — particularly the way Xi conflated the struggle of the civil war with that of the trade war.
“This theme of industrialization and of China controlling its natural resources and industrial power is deeply rooted in the national identity to a degree outsiders don’t appreciate,” Delury said.
Beijing’s emphasis on commanding its natural resources is also clear at a memorial for the old tungsten mine, which was run by Mao’s brother, Mao Zemin. A sign says the tungsten accounted for 70 percent of the party’s revenue amid “difficult times” — this point is hammered home with a large “70%” written out in bushes across a hillside — and made “outstanding contributions to the Chinese revolution.”
Words of wisdom from Xi are written on one of the memorial’s buildings: “Make good use of red resources, preserve red genes, and pass on the red country.”
The extent to which China has used these “red resources” as tools of economic coercion — including with its wide-ranging rare earth export controlsannounced in October, just before Xi met Trump — caught many governments and companies off guard. Trump, for one, said the controls came “out of the blue.”
But it’s not surprising here.
“When all is good and quiet, China is like a sleeping lion,” said a 42-year-old Ganzhou man working in the construction business, who spoke on the condition of anonymity to discuss a sensitive political topic. He was smoking a cigarette in a tea shop below Ganzhou’s “Rare Earth Bridge,” which was renamed from “Peace Bridge” just last year.
“But once faced with a crisis, the power the country displays would be extremely strong,” he said.
Left behind
The Chinese Communist Party has sought to exert more control over the rare earths industry and to consolidate it. In 2021, several companies were merged to form the China Rare Earth Group, a state-owned firm headquartered in Ganzhou.
A state-run industrial park on the outskirts of the city, which houses more than 350 enterprises, is the largest rare earth and tungsten processing base in China, according to the Ganzhou government.
The China Rare Earth Group and other rare earth and tungsten firms did not respond to requests for comment. The Ganzhou Tungsten Industry Association declined to comment for this story.
But despite Beijing’s assertive stance in trade negotiations with the Trump administration, many people in Ganzhou seemed eager to tamp down tensions with Washington.
“We really hope that China-U. S. relations will improve because there are definitely some misunderstandings,” Liu, the museum founder, said as he walked around his exhibitions of old mining equipment and massive slabs of multicolored tungsten crystals. “Even between two countries that are in a competitive relationship, there is lots of space for collaboration.”
The desire for de-escalation may partly stem from the export restrictions’ potential impact on the main industry in Ganzhou, especially at a time of economic stagnation in China.
Kristen Looney, an expert on China’s rural development at Georgetown University who has conducted extensive research in Ganzhou, likens the third-tier city to China’s West Virginia: rich in natural resources, close to booming urban centers like Shenzhen and yet, largely left behind.
“It’s a place the central government cares a lot about because of its historical and cultural significance, and now they care because of rare earths,” she said. “But its development still trails behind its neighbors.”
A Ganzhou resident working in the cobalt industry, who also spoke on the condition of anonymity because of the political sensitivity, seemed to echo Looney’s sentiment.
“To be honest, the tungsten industry hasn’t really supported that many people all these years,” he said. “So it’s not like everyone feels proud or anything like that. Some factory bosses got rich in the past, but ordinary people did not get particularly wealthy.”
Lyric Li in Seoul contributed to this report.
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