China states that it is to cut off supply for military applications. More likely it was a tit-for-tat response to the CHIPS act. Cut China off from the most advanced chips, they cut the US off from the raw materials to make chips.
If it is actually about military applications that's more worrisome. US generals have predicted war with China in the near future as a foregone conclusion.
Trade war is one thing. Military conflict between the two global superpowers would be disastrous.