China tightens export rules for crucial rare earths

China has significantly strengthened its regulations on the export of rare earth elements, which are vital for the production of high-tech goods ranging from electric vehicles to military equipment. The Ministry of Commerce has formalized existing rules on processing technologies and unauthorized international collaborations, while also signaling a likely halt in exports to foreign arms manufacturers and select semiconductor firms. This move comes amid ongoing trade negotiations between China and the United States, with President Xi Jinping and former U.S. President Donald Trump expected to meet later this month. The new regulations mandate government approval for the export of technologies related to rare earth mining, processing, and magnet production, many of which were already restricted. Additionally, Chinese companies are prohibited from collaborating with foreign entities on rare earth projects without explicit government consent. The announcement also specifies restricted technologies, including mining, smelting, separation, magnetic material manufacturing, and recycling processes. This could significantly impact the U.S., which, despite having a robust rare earth mining industry, lacks sufficient processing capabilities. China dominates the global rare earth market, accounting for 61% of production and 92% of processing, according to the International Energy Agency. The move has raised concerns in Western countries, particularly amid accusations that China has facilitated Russia’s military efforts by exporting dual-use technologies. Beijing has consistently denied these allegations.