China, a dominant force in the global rare earth market, has implemented stricter export rules for these vital minerals. The Ministry of Commerce announced new regulations, framed as a measure to “safeguard national security,” which formalize existing controls on processing technology and prohibit unauthorized international cooperation. This development comes at a crucial time, with trade tensions between China and the United States high and a potential meeting between Presidents Xi Jinping and Donald Trump on the horizon.
The new measures are expected to restrict exports to certain foreign arms manufacturers and semiconductor companies. China has previously been accused by Western nations of leveraging its near-monopoly on rare earths for geopolitical advantage. The country controls a significant portion of both the extraction and refining processes, making these new regulations a potent tool in international trade discussions.
Technology related to rare earth mining, processing, and magnet production is now subject to stricter export licensing. Many of these technologies were already under specific controls, but the latest announcement clarifies that licenses will likely be denied to specific industries, including defense and advanced semiconductor manufacturing. This mirrors actions taken by the US to limit China’s access to critical technologies.
The regulations also explicitly ban Chinese companies from collaborating with foreign entities on rare earth projects without prior government approval. This move is seen by some as a response to US efforts to slow China’s technological advancement, particularly in areas like artificial intelligence with military applications. Experts suggest China is strategically timing these regulations to coincide with upcoming high-level diplomatic meetings.
Rare earths are a group of 17 elements essential for modern technology, used in everything from smartphones and electric vehicle motors to wind turbines and advanced defense systems. Their unique magnetic, catalytic, and electrical properties make them indispensable for many high-tech applications. China’s dominance in this sector, accounting for a substantial majority of global production and processing, gives it significant leverage in international markets.