BEIJING — China on Thursday announced a significant tightening of its rare earth export controls, expanding restrictions on key processing technologies and specifying new limits on exports to overseas defense and semiconductor users.
The move, unveiled by the Ministry of Commerce, underscores Beijing’s growing determination to wield its dominance in critical mineral supply chains as a strategic tool amid escalating tensions with the United States.
The ministry said the new rules will include stricter licensing requirements for rare earth magnet technology and broader limits on components and assemblies containing restricted materials.
Analysts say the timing, just weeks before a planned meeting between Presidents Donald Trump and Xi Jinping in South Korea, highlights the policy’s geopolitical intent.
Rare earth elements a group of 17 minerals essential for producing electric vehicles, wind turbines, advanced electronics, and military radars have become a central front in the global technology and trade rivalry between Washington and Beijing.
China accounts for more than 90 percent of the world’s processed rare earth supply and is the leading producer of rare earth magnets, a critical component in everything from smartphones to missile guidance systems.
In April, Beijing had already imposed sweeping export controls that triggered temporary global shortages, sending shockwaves through supply chains across Europe and North America.
Although subsequent trade deals eased the crunch, Thursday’s announcement indicates a renewed push by China to strengthen its leverage.
The latest controls aim to safeguard national security and strategic interests, the Ministry of Commerce said in its statement. “Exporting technologies and materials related to rare earths will now require additional approvals.”
Experts view the decision as a calculated move in Beijing’s broader strategy to counter escalating US export restrictions on advanced semiconductors and chipmaking tools.
“From a geostrategic perspective, this helps increase leverage for Beijing ahead of the anticipated Trump Xi summit in South Korea later this month,” said Tim Zhang, founder of Singapore based Edge Research.
“It sends a clear signal that China’s dominance in rare earth processing remains a powerful diplomatic and economic tool.”
The policy also mirrors the United States’ own export controls on semiconductor technologies that rely on US origin components or software, even when produced overseas.
China is now adopting the same playbook, said Dr. Mei Lin, a trade policy specialist at the University of Hong Kong. “If a foreign company uses Chinese rare earth material or technology, they will now fall under Beijing’s regulatory umbrella.”
Global demand for rare earth elements has surged in recent years, driven by rapid expansion in renewable energy and electric vehicle production. According to data from the International Energy Agency (IEA), global demand for rare earths used in magnets is projected to triple by 2030.
China produced roughly 240,000 metric tons of rare earth oxides in 2024, compared to just 40,000 tons combined from the United States, Australia, and Myanmar. Despite efforts by Western nations to diversify supply chains, China’s refining and processing capabilities remain unparalleled.
“Even if other countries increase mining, processing remains the choke point,” said John Healy, senior analyst at Mineral Research Partners in Washington. “That’s where China has a 20 year head start.”
The European Union and Japan have also expressed concerns over the potential for disruptions. Both regions rely heavily on Chinese imports to sustain their defense and semiconductor manufacturing industries.
In Baotou, Inner Mongolia the heart of China’s rare earth industry local business owners and engineers reacted with mixed feelings.
Liu Wen, a factory manager at a magnet manufacturing plant, said tighter controls could boost domestic industry value. “These measures will make our technology more secure and help raise prices for our products,” Liu said.
But others worried about long-term repercussions. “If other countries invest more in alternatives, we might lose customers,” said Chen Rui, a logistics operator who exports rare earth powders to Europe. “We depend on foreign buyers as much as they depend on us.”
A U.S.-based defense contractor executive, speaking on condition of anonymity, said the new measures could disrupt supply lines for high performance sensors and missile components.
This could hit the defense industry hard, the executive said. There’s no immediate substitute for Chinese rare earth magnets. Analysts expect the latest restrictions to intensify global efforts to reduce dependence on Chinese rare earths.
The United States, Australia, and Canada are already investing heavily in domestic refining capacity and recycling technologies though experts caution that building competitive infrastructure could take years.
“The message from Beijing is clear: access to its rare earth technology will not come without political and economic strings,” said Li Yufan, senior fellow at the China Institute of International Trade Studies.
China’s Ministry of Commerce also indicated that recycling equipment for rare earths will now require export licenses, expanding its control over environmental technologies tied to the sector. This could further complicate Western supply diversification efforts.
Still, Beijing maintains that its actions are in line with international trade norms. “China’s policy on rare earth exports remains open, transparent, and in accordance with WTO regulations,” the ministry said.
As the world’s dominant producer and processor of rare earth elements, China’s latest export controls mark another escalation in the global technology rivalry with the United States.
The move not only underscores Beijing’s strategic leverage but also deepens uncertainty for industries dependent on advanced materials from electric vehicles to defense systems.
With the Trump Xi summit approaching, observers say the tightening of rare earth export controls will likely serve as both a warning and a bargaining chip, reminding Washington and its allies of just how deeply interconnected and fragile the world’s high tech supply chains remain.