China’s commerce ministry announced new controls on the export of rare-earth technologies and items on Thursday, adding to regulations on a critical industry that has been a key source of tension between Beijing and Washington.
China is the world’s leading producer of the minerals used to make magnets, crucial to the auto, electronics and defence industries. It has required licenses for certain exports of the materials since April, hitting global manufacturing sectors.
Rare earths have been a major sticking point in recent trade negotiations between China and the United States, with Washington accusing Beijing of slow-walking export license approvals.
The new controls — which kick in immediately — mean exporters must obtain permission for technologies used for rare-earth mining and smelting, among other processing steps, a Chinese commerce ministry statement said.
They will also apply to technologies used in the “assembly, adjusting, maintenance, repair and upgrading of production lines”, it said.
The commerce ministry said separately that restrictions would be placed on foreign entities that export related items outside China.
The controls will require such exporters to obtain a permit before making certain shipments, the statement said, adding that applications to overseas military users would not be approved.
“For some time, some overseas organisations and individuals have directly or after processing transferred or provided controlled rare-earth items originating in China… for direct or indirect use in sensitive areas such as military operations,” a ministry spokesperson said in a statement.
The practice has caused “significant damage or potential threats to China’s national security and interests (and) adversely impacted international peace and stability”.
The European Commission said on Thursday it was “concerned” by China’s announcement of the new controls.
“The commission expects China to act as a reliable partner and to ensure stable, predictable access to critical raw materials,” EU trade spokesman Olof Gill told reporters.
Global disruption
The restrictions imposed by Beijing this year have caused significant disruption in worldwide industries, with some companies facing halts to production as supply of the key minerals dwindles.
European Union chief Ursula von der Leyen said after a tense summit in Beijing in July that leaders had agreed to an improved mechanism for Chinese exports of rare earths to the bloc.
However, a business lobby warned last month that European firms still faced challenges in securing access to the materials.
The European Union and the United States are both trying to boost their own production of rare earths and better recycle what they use to reduce dependence on Beijing.
The United States Geological Survey estimated in a 2024 assessment that there were 110 million tonnes of deposits worldwide, including 44 million in China.
A further 22 million tonnes are estimated in Brazil and 21 million in Vietnam, while Russia has 10 million and India seven million tonnes.
Beijing has for decades made the most of its reserves by investing massively in refining operations, often without the strict environmental oversight required in Western countries.
China has also filed a huge number of patents on rare earth production, an obstacle to companies elsewhere hoping to launch large-scale processing.
As a result, many firms find it cheaper to ship their ore to China for refining, further reinforcing the world’s reliance.
