China Introduces Comprehensive Rare Earth Export Controls to Safeguard National Security: What You Need to Know

China is tightening its grip on rare earth exports, a move that could shift the balance in global tech markets. Recently, Beijing announced new export controls on rare earth materials and technologies. This decision comes ahead of an anticipated meeting between US President Donald Trump and China’s Xi Jinping.

Under these new rules, foreign companies must get approval from China to export magnets that contain even small amounts of Chinese rare earth materials. This applies to products made using China’s extraction or refining technology, marking a major shift in how trade is regulated.

This strategy parallels the US’s own foreign product rules, which have been used to limit semiconductor exports to China. Essentially, China is attempting to control the supply chain for critical technologies—everything from smartphones and electric cars to advanced military equipment relies on these vital materials.

China already controls around 70% of the global supply of rare earth mining and up to 93% of magnet manufacturing. According to the Financial Times, this control is substantial and positions China as a key player in international markets.

The new regulations were introduced after China had already placed export restrictions in retaliation for US tariffs. This earlier move had already impacted American industries reliant on these materials, forcing the US to reconsider its trade strategies. Gracelin Baskaran, a critical minerals expert, noted that “the timing of this new policy is strategic,” suggesting it adds pressure in upcoming negotiations.

China’s commerce ministry states these measures are meant to protect national security and prevent misuse of their materials in military applications. They claim that some foreign companies have risked China’s security by misusing these resources for military purposes.

Starting December 1, the new licensing system will go into effect. Most export licenses for military uses will be denied. Each case involving semiconductors and related materials will be evaluated individually.

In response to these dynamics, US officials are ramping up support for American rare earth miners and manufacturers, trying to lessen dependence on Chinese supplies. The G7 group is also looking into building a robust supply chain outside of China.

This development not only affects international trade but also highlights underlying tensions between global powers as they navigate a world increasingly reliant on technology. The stakes are high, and the race for rare earth resources is just beginning.

For further information on rare earth materials and their significance in global trade, check out the U.S. Geological Survey’s latest report on mineral commodities.

Source link