October 10, 2025
BEIJING – China has tightened its grip on rare earths, extending export controls beyond its borders for the first time to cover foreign transfers of products made with Chinese rare earth materials or technology.
Observers say the move appears to be a gambit in China’s trade talks with the US, as Beijing uses its leverage ahead of a possible summit between the countries’ two leaders in South Korea later in October.
On Oct 9, China’s Ministry of Commerce said that, from Dec 1, overseas entities will need Beijing’s approval to export products made abroad that contain Chinese-origin controlled materials of at least 0.1 per cent in value.
The step plugs the gaps in rare earth export curbs introduced in April, following US President Donald Trump’s Liberation Day tariffs, on materials Beijing says could be used for military purposes.
“For some time, certain foreign organisations and individuals have transferred Chinese-origin rare earth materials, directly or after processing, to military and other sensitive users, threatening China’s security, undermining global peace and stability, and harming non-proliferation,” a Commerce Ministry spokesperson said on Oct 9.
Licences must also be obtained for products made overseas using Chinese technology related to rare earth mining and processing, the ministry added. But it is unclear how China will enforce these rules.
The ministry also said that, with effect from Oct 9, technology related to rare earth mining, smelting, refining, magnet manufacturing and recycling of rare earth resources may not be exported without permission. The restrictions also cover technology related to the relevant production lines.
Such technology has been restricted for export since 2001, but the new measure aims to clarify the rules and strengthen supervision.
China wants control over its technology, given that its advantage lies not just in its rare earth deposits, but also in its expertise in separating and refining them for use in manufacturing.
It also announced four other sets of export restrictions related to super-hard materials, rare earth equipment and raw materials, five types of medium and heavy rare earth elements, and lithium battery and graphite-anode materials, to take effect from Nov 8.
A Commerce Ministry spokesperson said all the listed items had “obvious dual-use properties”.
Assistant Professor Stefanie Kam from the S. Rajaratnam School of International Studies, who has researched China’s rare earth policy, said China is going on the offensive to protect its interests.
“(The curbs) are, first and foremost, designed to leverage Beijing’s dominance in the rare earth market to be used as a bargaining chip in trade negotiations,” she told The Straits Times, adding that they could also be retaliation for American trade measures and tech restrictions.
“They are also defensive in nature, in that they are designed to protect Beijing’s domestic industrial needs in rare earths, to be used for supplying the country’s robotics, automation and semiconductor manufacturing, and part of China’s economic statecraft to achieve its own national economic and security goals,” she added.
China and the US have traded tit-for-tat moves since Mr Trump announced tariffs in April, but they reached a truce that lowered tariffs by the US to 30 per cent and those by China to 10 per cent earlier in 2025. The tariff truce is set to expire on Nov 10.
Despite the truce, both countries have continued to beef up their negotiating positions ahead of in-person talks between Mr Trump and Chinese President Xi Jinping expected on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea in late October.
The latest announcement on rare earth curbs, made the first day China returned from an eight-day public holiday, expands a licensing regime that started in April.
The export requirements had not just roiled the US defence and auto industries, but also frustrated European importers.
China’s Commerce Ministry said on Oct 9 that approval will not be given for export applications to overseas military users, as well as to importers and end users on the export control list, “including their subsidiaries, branches and other affiliates in which they hold a 50 per cent or more stake”.
This appeared to be a response to a new rule issued by the US Department of Commerce on Sept 29, which expanded American export restrictions to entities that are 50 per cent or more owned by those on US trade blacklists, seen as targeting China.
China had said that it firmly opposed the so-called “affiliate rule”, which a Ministry of Commerce spokesperson said was “extremely egregious” and “severely damaged the legitimate rights and interests of affected companies”.
Associate Professor Chong Ja Ian from the National University of Singapore, who specialises in Chinese foreign policy, said China’s new restrictions could be a signal to warn other countries, or firms from other countries, not to cooperate with the US in ways that Beijing claims would harm its interests.
Prof Chong cautioned against over-expectations of the meeting between Mr Trump and Mr Xi, given the volatility in US-China relations. Even if the two leaders do meet, they may change their minds later on, he told ST.
“Trump’s apparently successful meeting with (Prime Minister Narendra) Modi did not stop heavy US tariffs on India, just as the tumultuous meeting between Trump and (Ukrainian President Volodymyr) Zelensky earlier in the year seems to have given way to some support.”
In the US, the response to the latest curbs was muted compared with April, when China first put controls on rare earth magnets in response to Mr Trump’s threat to impose triple-digit tariffs on China.
“It’s not nothing at all, but the adrenaline levels haven’t soared, and it’s not game-changing,” said an expert speaking off the record.
But in the longer term, if the US does not make these products, the situation could get extremely difficult for it, experts in the US say.
“I think the immediate impact is limited because the US has had six months to prepare,” said Ms Caroline Messecar, strategic markets editor for technology metals at Fastmarkets, a leading cross-commodity price reporting agency.
“But they (the US) have no capacity to produce these materials today,” she noted.
Said Mr David Abraham, an American natural resources strategist and the author of The Elements Of Power, widely considered the first book to reveal how rare metals shape global power: “This is continuing a strategy to ensure Chinese resources favour Chinese manufacturing, and also uses leverage to cut off valuable resources to other countries.”
China is also seeking leverage before negotiations, he added.
While the US has no leverage in rare earths, there are other areas where China is reliant on US technology or resources, he said.
Additional reporting by Bhagyashree Garekar