China announced sweeping new export controls on rare earth materials and related technologies on Thursday, deepening state oversight of resources that are vital to modern manufacturing and defense systems.
The Ministry of Commerce said the measures, introduced “to safeguard national security,” formalize earlier restrictions and impose specific limits on exporting mining, processing, and refining technologies. The regulations also prohibit Chinese firms from entering joint ventures or collaborations with foreign companies in the rare earth sector without prior government approval.
This marks the latest escalation in Beijing’s management of its rare earth industry, a sector it’s long regarded as a strategic national asset. The move’s expected to further tighten global supply chains that rely on these critical minerals for products ranging from smartphones and electric vehicles to wind turbines and advanced weaponry.
Rare earth exports have become a particularly sensitive flashpoint in China-U.S. trade relations, with Washington actively seeking to diversify its supply amid concerns about overdependence on China. The announcement comes just ahead of a planned meeting between President Xi Jinping and U.S. President Donald Trump, where trade and technology are expected to dominate discussions.
Under the revised framework, companies must obtain government licenses before exporting any technology related to rare earth mining, smelting, separation, or recycling. The same applies to the manufacturing and maintenance of magnetic materials used in electric motors, generators, and defense applications.
Industry experts say the new measures reinforce China’s control over the global supply chain and could restrict access to rare earths for defense and semiconductor industries in the United States, Europe, and Japan. “This is a clear reminder of how strategically important these materials have become,” said one Beijing-based analyst.
The new restrictions build on earlier steps taken by Beijing. In April, China added seven rare earth elements to its export control list, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. That move caused temporary supply disruptions and price volatility in global markets. The latest announcement clarifies the scope of these restrictions, making it clear that licenses are unlikely to be granted to foreign arms manufacturers or certain chipmakers.
The Ministry of Commerce also outlined that the regulations extend beyond raw materials. Equipment used in rare earth production, including assembly, repair, maintenance, and upgrades, will now be subject to export approval. The move aims to prevent the transfer of sensitive technology that could enhance foreign competitors’ refining capabilities.
The United States, despite having rare earth deposits in states such as California, remains heavily reliant on China for processing. Beijing controls approximately 70 percent of global rare earth extraction and about 90 percent of processing capacity. This near-monopoly gives China significant influence over industries that depend on these materials, from renewable energy and consumer electronics to aerospace and defense.
Recent export data shows the impact of earlier restrictions. In May 2025, China’s total exports of rare earth magnets fell by 74 percent year over year to 1.2 million kilograms, the lowest level since February 2020 during the COVID-19 pandemic.
Rare earths are a group of 17 chemically similar elements that play an essential role in advanced technologies. Neodymium, for example, is used in powerful magnets found in computer hard drives, electric car motors, and aircraft engines. Though relatively abundant in the earth’s crust, these elements are rarely found in concentrated deposits and are difficult and hazardous to extract.
China’s dominance in the rare earth sector dates back decades, following deliberate state investment in mining and processing capabilities. As other countries closed environmentally challenging mines, China became the world’s primary source of both raw and processed rare earth materials.
The European Parliament responded earlier this week to China’s restrictions, adopting a resolution with 523 votes in favor calling the action unjustified and potentially coercive given the country’s market dominance.
Beijing’s tightening of export rules also follows criticism from Western governments that it’s permitted the export of “dual-use” technologies to Russia, materials that could serve both civilian and military purposes amid the war in Ukraine. China’s repeatedly denied these allegations, saying its trade practices comply with international law.
By refining its export regulations, China’s sending a signal that it intends to maintain full oversight of one of its most strategically important industries. The move highlights how critical minerals have become a geopolitical tool in an increasingly fractured global economy.
