China has introduced tougher export restrictions on rare earth materials and related technologies, while prohibiting its citizens from engaging in unapproved mining projects abroad. The move adds new pressure to a sector that has long served as a key source of Beijing’s global economic and strategic influence.
According to a Thursday announcement from China’s Ministry of Commerce, foreign companies will now need government approval to export any goods that contain more than 0.1% of rare earth materials sourced from China, or that were produced using Chinese extraction, refining, magnet production, or recycling technologies.
To curb what it described as the “misuse” of rare-earth minerals in defense and other sensitive industries, China’s Commerce Ministry said it will deny export licenses to entities linked to foreign militaries or listed under export-control or watch programs. The ministry added that applications involving materials that could be used for weapons, terrorism, or other military purposes will also be turned down.
The new measures represent a “major upgrade for rare earth export control,” broadening limits beyond raw materials to include intellectual property and advanced technologies, said Dan Wang, China director at Eurasia Group. Earlier in April, China had already placed several rare earth elements and related products under its export control list.
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Wang noted that the tighter controls could increase global reliance on China’s rare earth expertise, even as they advance Beijing’s goal of shifting its own industries toward higher-value manufacturing and technology.
Chinese nationals are now barred from taking part in overseas projects involving rare earth mining or magnet production unless they receive prior authorization from the government.
Official notices state that the export restrictions on rare earth materials will come into force on Dec. 1, while the rules governing related technologies and labor have already taken immediate effect.
The Commerce Ministry said export requests involving rare earth materials used in the production of sub-14 nanometer chips, advanced memory semiconductors, fabrication or testing tools, or artificial intelligence systems with possible military uses will be evaluated individually.
The new restrictions are largely aimed at the defense industry, said George Chen, a partner at The Asia Group, describing them as part of China’s broader strategy to counterbalance U.S. military strength.
Rare earth elements play a vital role in advanced industries such as electric vehicles, defense systems, and semiconductor manufacturing. This year, heightened export controls have added strain to global supply chains already entangled in the ongoing U.S.-China tensions.
“Beijing has realized that it has leverage in this sector and is clearly not shy about using it,” said Wendy Cutler, a senior vice president at the Asia Society Policy Institute and former U.S. trade negotiator, as quoted by CNBC.
China produces roughly 70% of the world’s rare earth supply and has often leveraged its dominance in these essential minerals during trade negotiations.
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The timing of the new export curbs is notable, coming only weeks ahead of a possible meeting between President Donald Trump and Chinese President Xi Jinping. The two leaders are expected to hold talks on the sidelines of the Asia-Pacific Economic Cooperation summit in late October in Gyeongju, South Korea.
Although China has not commented on upcoming meetings, Trump previously mentioned plans to visit China early next year, with Xi expected to visit the U.S. afterward.
The recent move can be seen as “a series of bargains” that Beijing aims to set ahead of the next round of major trade negotiations, said The Asia Group’s Chen.
“The Chinese side is getting more and more experienced in dealing with their counterparts and they know what their American friends want,” Chen added.
Since late last year, China has steadily strengthened controls on rare earth exports, requiring companies to certify that shipments will not be used for military applications. Following a trade truce with Washington in May, Beijing began issuing single-use export licenses.
Although official data indicates that rare earth magnet exports have rebounded somewhat in recent months, the recovery has been uneven. A survey by the European Chamber of Commerce last month highlighted the economic toll, with at least one member reporting losses of “millions of euros” and others pointing to inconsistent and opaque approval processes.