China Tightens Export Rules for Crucial Rare Earths
China has announced stricter export regulations on rare earth materials – essential components in the production of high-tech goods such as semiconductors, electric vehicles, and defense equipment. The move, unveiled by the Ministry of Commerce, is aimed at “safeguarding national security” and formalises restrictions that were previously applied on a case-by-case basis.
Under the new rules, foreign companies will need government approval to access China’s rare earth processing technologies or to collaborate with Chinese firms in the sector. The updated policy also reinforces limits on exporting technologies related to mining, refining, magnet production, and recycling of rare earths – areas that are crucial for global manufacturing supply chains.
Analysts say the decision could directly impact Western arms manufacturers and semiconductor firms, as China is expected to withhold export licenses for entities involved in military or sensitive chip production. The rules also ban Chinese companies from engaging in rare earth-related joint ventures abroad without state approval.
The timing of the announcement is seen as strategic, coming ahead of a planned meeting later this month between Chinese President Xi Jinping and U.S. President Donald Trump. Trade experts believe the policy mirrors Washington’s own export controls on advanced chip-making equipment to China – a move aimed at slowing Beijing’s progress in artificial intelligence and defense technology.
China has long dominated the global rare earth market, accounting for roughly 61% of global production and an estimated 92% of global processing capacity, according to the International Energy Agency (IEA). The nation’s near-monopoly has made it a key player in industries ranging from renewable energy to aerospace.
Rare earths – a group of 17 elements including neodymium, yttrium, and europium – are vital to manufacturing high-performance magnets, electric car motors, wind turbines, and fighter jet engines. While they are relatively abundant in nature, they are difficult and hazardous to refine, giving China a significant strategic advantage in the supply chain.
Trade analysts warn that the new restrictions could heighten tensions between Beijing and Washington, particularly as the U.S. seeks to expand its own rare earth processing capabilities to reduce dependence on Chinese imports.
Beijing’s latest move underscores how both countries are leveraging control over critical technologies as part of a broader geopolitical and economic standoff.
