Hong Kong (CNN Business) China is preparing to tighten its grip on the supply of a group of minerals the global tech industry can't live without.

Chinese state media reported that the government of Jiangxi province was planning to provide support to China Southern Rare Earth Group (CSRE) — the biggest producer of heavy rare earths "to increase its power and gain the upper hand and say in the resource."

Jiangxi, where most of China's heavy rare earths are produced, is considering how to boost the role of state-owned CSRE and encourage "high-quality development," the state-run Securities Times added.

The report highlights China's willingness to consolidate the industry and strengthen control of rare earths production, which Beijing sees as a powerful bargaining chip in the trade war. It comes on the eve of a crucial meeting between President Donald Trump and President Xi Jinping at the G20 summit in Osaka, Japan.

China controls more than 90% of production, according to the US Geological Survey. It also accounted for 80% of all rare earth minerals imported by the United States between 2014 and 2017.

A loader piles up rare earths in China.

The outcome of the Trump-Xi meeting on Saturday is likely to determine what happens next in a trade war that has already damaged global growth and hurt technology companies in particular.

On a visit to Jiangxi province in May, Xi described rare earths as an important strategic resource. Days later, the country's top economic planner signaled in a statement that Beijing was willing to play the rare earth card in the trade war

Since Xi's visit, rare earth stocks in China have spiked. They got another big boost from Friday's state media report.

Shares in Qingdao Huicheng Environmental Technology, which produces rare earth zeolites, rose by 10% — the maximum allowed on the Shenzhen stock exchange.

China Rare Earth Holdings CREQF Three more Shenzhen-listed rare earth miners also gained 10%. In Hong Kong,gained 5.7%, while Rare Earth Magnesium Technology Holdings advanced 2%.

Analysts from Pacific Securities expect China to give stronger support for the industry if Beijing chooses to restrict exports of the critical minerals to the United States.

Possible measures include merging companies, reducing the industry's reliance on the international market, and encouraging wider use of rare earths in industrial products.

CSRE, one of China's six largest rare earths companies, was formed in 2015 through the merger of three firms in Jiangxi province. Beijing has a long term plan to reduce the total number of players to six.

"China's purpose to create the six giant rare earths groups, which include CSRE and China Northern Rare Earth Group, is to consolidate the industry and gain a bigger say on the global market," wrote analysts for Northeast Securities in a research report last month.

"The consolidation of the industry will boost China's pricing power, optimize the resource allocation, improve the production technology and help protect the environment," they added.

Friday's stock market gains added to a ferocious rally seen across the sector since Xi's visit to Jiangxi. Shares in JL Mag Rare-Earth — which produces rare earth permanent magnetic materials — have jumped more than 130% in the past month. Other big moves have been seen in Jiangsu Jiuwu Hi-tech (up 46%), and BGRIMM Technology (up 26%).

In addition to their use in electronics, rare earths are vital to many of the major weapons systems that the United States relies on for national security.

That includes lasers, radar, sonar, night vision systems, missile guidance, jet engines and alloys for armored vehicles, according to a report the Pentagon prepared for Trump last year.

Chinese state media put Washington on notice of possible curbs to rare earth exports late last month, publishing a new commentary with words of caution: "Don't say we didn't warn you."

China has flexed this muscle before. In 2010, following a dispute with Japan over contested islands, China cut off rare earth exports to that country.