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China has unveiled sweeping new export controls on rare earths and related technologies, as Beijing seeks to protect and leverage its dominant position in the global supply chain for critical minerals.
The restrictions announced on Thursday by China’s commerce ministry will for the first time create a Chinese version of the US foreign direct product rule, measures which Washington has used to block semiconductor-related exports to China from third countries.
Under the new rules, foreign companies will need Chinese government approval to export products that contain even trace amounts of Chinese-sourced rare-earth minerals, or that were manufactured using the country’s rare-earth extraction, refining or magnet-making technology.
China said the measures are intended to “protect its national security and interests” and prevent the “misuse of rare-earth materials in military and other sensitive sectors”.
The commerce ministry added that it had found some overseas companies had significantly harmed China’s security by transferring Chinese-origin rare-earth materials and technology to others for military use.
The move gives Beijing fresh leverage to exert control over the entire global rare-earth supply chain as western countries race to diversify their rare earth production supply chains away from China.
The controls mark the country’s first extraterritorial export-control regime, to expand China’s jurisdiction over its materials used abroad.
This is a developing story
