KEY POINTS
- Five new elements added: holmium, erbium, thulium, europium, ytterbium.
- Controls target foreign defence and semiconductor users.
- Dozens of refining tools and technologies added to the control list.
- Foreign firms using Chinese materials must obtain export licences.
- China supplies over 90% of processed rare earths globally.
BEIJING: China on Thursday tightened controls on its rare earth export, saying it intended to limit exports to foreign defence companies and semiconductor users while adding five rare earth elements to its list.
The world’s biggest rare earth producer also included dozens of pieces of refining technology on its control list and announced regulations that will require compliance from foreign rare earth producers who use Chinese materials.
The Ministry of Commerce’s announcement comes in response to calls by US lawmakers on Tuesday for broader restrictions on the export of chipmaking equipment to China.
The latest restrictions are being implemented just weeks before a planned face-to-face meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea.
“This helps with increasing 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.
China, which accounts for over 90% of the world’s supply of processed rare earths and rare earth magnets, has expanded its export restrictions on these critical materials.
The 17 rare earth elements are essential components in a wide range of products, including electric vehicles, aircraft engines, and military radars.
The Ministry of Commerce has now imposed export restrictions on 12 of these elements, after adding five more—holmium, erbium, thulium, europium, and ytterbium—along with related materials.
Chinese export license
Under the new rules, foreign companies manufacturing certain rare earths or related magnets using Chinese materials or equipment will be required to obtain a Chinese export license, even if no Chinese company is directly involved in the transaction.
The move mirrors US regulations aimed at limiting exports of semiconductor-related products to China and reflects the growing strategic competition between the two states.
In addition, the ministry has added dozens of mining and refining tools and materials to its export control list.
China’s latest curbs on the five additional elements and processing equipment will take effect on November 8, just before a 90-day trade pact with Washington expires.
The new export rules targeting foreign companies that use Chinese rare earth materials or equipment are set to take effect on December 1.
Following the announcement, shares of major Chinese rare earth firms surged—China Northern Rare Earth Group rose by 10%, China Rare Earth Resources and Technology by 9.97%, and Shenghe Resources by 9.4% on Thursday.
Impact on Chips and Defence
China’s Ministry of Commerce also announced that export licenses will not be granted to overseas defence-related users. Applications related to advanced semiconductor technology will be evaluated on a case-by-case basis.
The restrictions cover the production and development of 14-nanometer or more advanced chips, memory chips with 256 layers or more, and the equipment used to manufacture them.
These high-performance chips are essential for products ranging from smartphones to AI processors requiring significant computing power.
Additionally, the rules extend to research and development in artificial intelligence, particularly projects with potential military applications.
In response, South Korea—which is home to leading memory chipmakers Samsung Electronics and SK Hynix—said it is reviewing the new measures and will continue discussions with Chinese authorities to minimise any negative impact, the industry ministry said in a statement to Reuters.
Chinese rare earth exports have been steadily increasing in recent months as Beijing issues more export licenses. However, some users continue to report difficulties in securing access to these materials.
