China Escalates Rare Earth Export Clampdown, Halting Shipments to Global Defense and Chip Industries

China has announced a new round of restrictions on rare earth exports, marking a notable tightening of its control over this critical sector. According to a statement released by the Ministry of Commerce, the updated regulations expand limitations on certain processing technologies and ban any international cooperation that lacks prior authorization. The policy specifically indicates that exports connected to defense or semiconductor manufacturing abroad will face stringent scrutiny.

These measures refine and extend earlier rules introduced in April, which had temporarily disrupted global supplies before stabilization agreements were reached with partners in Europe and the United States.

Under the new framework, companies must now obtain government approval before exporting any technology used in rare earth extraction, refining, or magnet production. Although many of these activities were already regulated, the latest order widens the scope to include additional magnet types and related manufacturing methods.

The Ministry also included machinery used for rare earth recycling among the items requiring export licenses, broadening the list of controlled technologies. Furthermore, foreign firms that rely on Chinese-made components or equipment will need to apply for licenses before sending any restricted materials overseas. Chinese enterprises operating abroad are likewise barred from engaging in joint ventures involving rare earths without official consent.

For the first time, the government explicitly outlined which sectors would face tighter restrictions. Defense contractors outside China are ineligible for export licenses, while requests related to advanced semiconductor applications will be reviewed individually.

Rare earth materials remain essential to numerous high-technology and strategic industries—from aircraft engines and radar systems to electric vehicles. China continues to dominate the global supply chain, accounting for more than half of all rare earth mining and nearly all global processing and magnet manufacturing.