Shares of China's rare earth-related firms rallied significantly on Wednesday after China indicated that it may use the minerals as powerful weapons against the US amid an escalating trade war between the world's two largest economies.

Hong Kong-listed shares of China Rare Earth Holdings Ltd soared by more than 30 percent in morning trading, while JL MAG Rare-Earth Co Ltd, rose by the daily 10-percent limit to a record high. China Northern rose by 8.68 percent as of close on Wednesday.

On Tuesday night, a spokesperson from the National Development and Reform Commission (NDRC), China's top planner, said, "You asked whether rare earths will become China's countermeasures against the US. What I can tell you is that if anyone wants to use products made of China's rare-earth exports to contain China's development, the people of Ganzhou and across China will not be happy with that."

The comment was viewed by many as a signal that China might use its rare earths as a weapon to contain the US as trade tensions between the two intensified.

The People's Daily also published an editorial on Wednesday, emphasizing that the US shouldn't "underestimate China's ability to fight the trade war." The statement is deemed by the analysts as a clear-cut warning that China's rare earths will be used as a weapon.

China dominates global supply chains. The country accounted for at least 71 percent of mined output last year, with the percentage for processed rare earth compounds even higher, and the US sourced 80 percent of its rare earth imports from China from 2014 to 2017, according to statistics from the US government.

Rare earth minerals are a group of 17 elements used in production in a huge number of sectors, including oil refining, electronics, and the glass industry. It is vital for many US industries.

On May 20, Chinese President Xi Jinping visited JL MAG Rare-Earth Co, a Ganzhou-based high-tech company specializing in research and development (R&D) on permanent rare-earth magnetic materials, to learn about the company's operations and the development of the rare earth industry, the Xinhua News Agency reported.