China expands rare earth restrictions, targets defenceStaff WritersReutersThu, 9 October 2025 11:12PM
China has dramatically expanded its rare earths export controls, adding five new elements and extra scrutiny for semiconductor users as Beijing tightens control over the sector ahead of talks between leaders Donald Trump and Xi Jinping.
The world’s largest rare earths producer also added dozens of pieces of refining technology to its control list and announced rules that will require compliance from foreign rare earth producers who use Chinese materials.
The Ministry of Commerce’s announcements follow US politicians’ calls on Tuesday for broader bans on the export of chipmaking equipment to China.
They expand controls that Beijing announced in April that caused shortages around the world, before a series of deals with Europe and the US eased the supply crunch.
“The White House and relevant agencies are closely assessing any impact from the new rules, which were announced without any notice and imposed in an apparent effort to exert control over the entire world’s technology supply chains,” a White House official told Reuters on Thursday.
The new curbs come ahead of a scheduled face-to-face meeting between Trump and Xi in South Korea at the end of October.
“This helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in (South) Korea later this month,” said Tim Zhang, founder of Singapore-based Edge Research.
China produces over 90 per cent of the world’s processed rare earths and rare earth magnets.
The 17 rare earth elements are vital materials in products ranging from electric vehicles to aircraft engines and military radars.
Exports of 12 of them are now restricted after the ministry added five – holmium, erbium, thulium, europium and ytterbium – along with related materials.
Foreign companies producing some of the rare earths and related magnets on the list will now also need a Chinese export licence if the final product contains or is made with Chinese equipment or material.
This applies even if the transaction includes no Chinese companies.
The regulations mimic the rules the US has implemented to restrict other countries’ exports of semiconductor-related products to China.
It was not immediately clear how Beijing intends to enforce its new regime, especially as the US, the European Union and others race to build alternatives to the Chinese rare earth supply chain.
“We’re likely entering a period of structural bifurcation — with China localising its value chain and the US and allies accelerating their own,” said Neha Mukherjee, a rare earths analyst with Benchmark Mineral Intelligence.
In a nod to concerns about supply shortages, the ministry said the scope of items in its latest restrictions was limited and “a variety of licensing facilitation measures will be adopted”.
China’s latest restrictions on the five additional elements and processing equipment will take effect on November 8, just before a 90-day trade truce with Washington expires.
The rules on foreign companies that make products using Chinese rare earth equipment or materials are to take effect on December 1.
The ministry also said overseas defence users will not be granted licences, while applications related to advanced semiconductors will be approved on a case-by-case basis.
The new rules apply to 14-nanometre chips or more advanced chips, memory chips with 256 layers or more, and equipment used in the production of such chips, as well as to related research and development.
These advanced chips are used in products from smartphones to AI chipsets that require powerful computing performance.
The rules will also apply to research and development of artificial intelligence with potential military applications.
South Korea, home to major memory chipmakers Samsung Electronics and SK Hynix, is assessing the details of the new restrictions and will continue discussions with China to minimise their impact, its industry ministry said in a statement to Reuters.
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