China is implementing more rigorous export regulations for rare earth elements, materials essential for manufacturing a wide array of high-tech products. The Ministry of Commerce has announced these new measures, which formalize existing controls on processing technology and prevent unauthorized international collaboration, citing national security as the primary reason.
These updated rules are expected to affect exports to foreign arms manufacturers and certain semiconductor companies. The regulations also clarify restrictions on technologies involved in rare earth mining, smelting, separation, magnetic material production, and recycling. Exporting the equipment used for these processes, as well as for assembly, debugging, maintenance, and repair, will now require government permission.
This move comes at a sensitive time, as rare earth exports have been a significant point of contention in the ongoing trade negotiations between China and the United States. The announcement precedes an anticipated meeting between Chinese President Xi Jinping and US President Donald Trump.
These regulations appear to mirror recent US actions that restrict the export of chip-making equipment to China, measures intended to slow the country’s advancement in critical technologies with potential military applications. Industry experts suggest China’s timing is strategic, aiming to address vulnerabilities in the US electronics and weapons manufacturing sectors, much like the US has targeted China’s chip industry.
Rare earth elements, a group of 17 metals, are indispensable for modern technology, enabling the creation of powerful magnets found in everything from loudspeakers and hard drives to electric car motors and jet engines. China currently dominates the global market for these elements, controlling the majority of both extraction and processing. The International Energy Agency notes that China is responsible for approximately 61% of rare earth production and a staggering 92% of their processing.