China has tightened export controls on rare earths and other materials critical for advanced tech manufacturing as trade negotiations continue with the US.
It processes around 90% of the world’s rare earths, which go into everything from solar panels to smartphones – a key bargaining chip ahead of an expected meeting between Chinese leader Xi Jinping and his US counterpart Donald Trump this month.
Beijing had already restricted processing technology and unauthorised overseas co-operation, but Thursday’s announcement formalised the rules.
Foreign companies now need the Chinese government’s approval to export products with even small amounts of rare earths and must explain their intended use.
The ministry announced similar restrictions on the export of lithium batteries and some forms of graphite, which are also essential components in the global tech supply chain and largely produced in China.
Beijing said the regulations are intended to “safeguard national security”. One of the main targets of these controls appears to be overseas defence manufacturers, including those in the US, who rely on rare earths from China.
China had added several rare earths and related material to its export control list in April, as the trade war with Washington ramped up, which caused a major global shortage.
But the new announcement makes clear that licenses are unlikely to be issued to arms manufacturers and certain companies in the chip industry.
Even the technology used to mine and process rare earths, or to make magnets from rare earths, can only be exported with permission from the government, the Commerce Ministry said.
Chinese firms are also banned from working with foreign companies on rare earths without government permission.
The latest announcement also clarifies the specific technologies and processes that are restricted.
These include mining, smelting and separation, magnetic material manufacturing, and recycling rare earths from other resources.
The assembly, debugging, maintenance, repair, and upgrading of production equipment are also prohibited from export without permission, the announcement added.
This could have a major impact in the US, which has a significant rare earths mining industry but lacks processing facilities.
(BBC)
