HONG KONG. China outlined new curbs on exports of rare earths and related technologies on Thursday, extending controls over use of the elements critical for many products ahead of a meeting later this month between President Donald Trump and Chinese leader Xi Jinping.
The regulations announced by the Ministry of Commerce require foreign companies to get special approval to export items that contain even small traces of rare earths elements sourced from China.
Beijing also will impose permitting requirements on exports of technologies related to rare earths mining, smelting, recycling and magnet-making, it said.
China accounts for nearly 70% of the world’s rare earths mining. It also controls roughly 90% of global rare earths processing. Access to such materials is a key point of contention in trade talks between Washington and Beijing.
As Trump has raised tariffs on imports of many products from China, Beijing has doubled down on controls on the strategically vital minerals, raising concerns over potential shortages for manufacturers in the U.S. and elsewhere.
It was not immediately clear how China plans to enforce the new policies overseas.
The critical minerals are used in a broad range of products, from jet engines, radar systems and automotives to consumer electronics including laptops and phones.
The new restrictions are to “better safeguard national security” and to stop uses in “sensitive fields such as the military” that stem from rare earths processed or sourced from China or from its related technologies, the Commerce Ministry said.
It said some unnamed “overseas bodies and individuals” had transferred rare earths elements and technologies from China abroad for military or other sensitive uses which caused “significant damage” to its national security.
The new curbs were announced just weeks ahead of an expected meeting between Trump and Chinese President Xi Jinping in late October on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea.
“Rare earths will continue to be a key part of negotiations for Washington and Beijing,” George Chen, a partner at The Asia Group, said in an emailed comment. “Both sides want more stability but there will be still a lot of noises before the two leaders, President Trump and Xi, can make a final deal next year when they meet. Those noises are all negotiation tactics.”
In April, Chinese authorities imposed export curbs on seven rare earth elements shortly after Trump unveiled his steep tariffs on many trading partners including China.
While supplies remain uncertain, China approved some permits for rare earth exports in June and said it was speeding up its approval processes.
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The new restrictions are to “better safeguard national security” and to stop uses in “sensitive fields such as the military” that stem from rare earths processed or sourced from China or from its related technologies, the Commerce Ministry said.
It said some unnamed “overseas bodies and individuals” had transferred rare earths elements and technologies from China abroad for military or other sensitive uses which caused “significant damage” to its national security.
The new curbs were announced just weeks ahead of an expected meeting between Trump and Chinese President Xi Jinping in late October on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea.
“Rare earths will continue to be a key part of negotiations for Washington and Beijing,” George Chen, a partner at The Asia Group, said in an emailed comment. “Both sides want more stability but there will be still a lot of noises before the two leaders, President Trump and Xi, can make a final deal next year when they meet. Those noises are all negotiation tactics.”
In April, Chinese authorities imposed export curbs on seven rare earth elements shortly after Trump unveiled his steep tariffs on many trading partners including China.
While supplies remain uncertain, China approved some permits for rare earth exports in June and said it was speeding up its approval processes.
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China has tightened its rules on the export of rare earths – the elements that are crucial to the manufacture of many high-tech products.
New regulations announced by the country’s Ministry of Commerce “to safeguard national security” formalise existing rules on processing technology and unauthorised overseas cooperation.
China is also likely to block exports to foreign arms manufacturers and some semiconductor firms.
Rare earth exports are a key sticking point in the months-long negotiations between Beijing and Washington over trade and tariffs. The announcement comes as China’s President Xi Jinping and his US counterpart Donald Trump are expected to meet later this month.
Technology used to mine and process rare earths, or to make magnets from rare earths, can only be exported with permission from the government, the Ministry of Commerce said.
Many of these technologies are already restricted. China had added several rare earths and related material to its export control list in April, which caused a major shortage back then.
But the new announcement makes clear that licenses are unlikely to be issued to arms manufacturers and certain companies in the chip industry.
Chinese firms are also banned from working with foreign companies on rare earths without government permission.
China has been accused by the US and other Western countries of aiding Russia’s war on Ukraine by allowing dual technology exports – materials that can be used for either civilian or military purposes – to be sent to Moscow. Beijing has repeatedly denied this.
The latest announcement also clarifies the specific technologies and processes that are restricted.
These include mining, smelting and separation, magnetic material manufacturing, and recycling rare earths from other resources.
The assembly, debugging, maintenance, repair, and upgrading of production equipment are also prohibited from export without permission, the announcement added.
This could have an impact on the US, which has a significant rare earths mining industry but lacks processing facilities.
The new regulations create Beijing’s version of US rules which block countries from selling chip-making equipment to China.
The US has used those measures to slow China’s development of powerful chips that could be used for artificial intelligence (AI) with military applications.
Trade expert Alex Capri believes China’s new regulations “are specifically timed” ahead of Xi and Trump’s expected meeting later this month.
Beijing has targeted key vulnerabilities in US electronics and weapons manufacturing, mirroring America’s earlier moves against China’s chip industry, he added.
Rare earths are a group of 17 chemically similar elements that are crucial to the manufacture of many high-tech products.
Most are abundant in nature, but they are known as “rare” because it is very unusual to find them in a pure form, and they are very hazardous to extract.
Although you may not be familiar with the names of these rare earths – like neodymium, yttrium and europium – you will be very familiar with the products that they are used in.
For instance, neodymium is used to make the powerful magnets used in loudspeakers, computer hard drives, electric car motors and jet engines that enable them to be smaller and more efficient.
China has a near monopoly on extracting rare earths as well as on refining them – which is the process of separating them from other minerals.
The International Energy Agency (IEA) estimates that China accounts for about 61% of rare earth production and 92% of their processing.