Beijing — China has announced sweeping new export restrictions on rare earths and related technologies, in a move analysts view as a strategic signal ahead of the upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit later this month in South Korea.
The new measures, unveiled by the Ministry of Commerce on October 9, 2025, dramatically expand Beijing’s control over critical materials and intellectual property tied to the global high-tech and defense industries.
Expanded Scope of Controls
The new rules extend well beyond raw mineral exports. They now encompass the technologies, processes, and equipment used in mining, refining, and manufacturing products based on rare earths a vital group of elements essential for modern electronics, renewable energy, and defense systems.
Technology Licensing
All exports involving rare earth mining, smelting, separation, metal refining, magnetic materials, and recycling technologies will now require special export licenses.
This shift effectively allows Beijing to regulate foreign access to not just the materials themselves, but also to Chinese-developed know-how and proprietary methods.
Global Supply Chain Reach
Foreign firms using Chinese-sourced rare earths or Chinese processing technologies will be required to obtain new licenses before exporting their own finished products.
Even items containing as little as 0.1% of Chinese-origin rare earths could be subject to approval. This “extraterritorial” mechanism extends China’s regulatory power deep into global supply chains, affecting industries worldwide.
Strategic Targets: Defense and High-Tech
China’s Ministry of Commerce emphasized that the new controls are motivated by national security concerns and will focus on sectors with potential military or dual-use applications.
- Defense: Exports tied to military purposes will face automatic denial. Beijing cited the need to prevent “Chinese-origin materials from being diverted into sensitive defense systems.”
- Semiconductors and AI: Applications involving advanced chipmaking (14-nanometer and below) and artificial intelligence systems with possible defense links will be subject to case-by-case review a move expected to create uncertainty and delays for global chipmakers.
At the same time, China’s “Unreliable Entities List” was expanded to include more than a dozen foreign firms, many of them American aerospace and defense companies, further restricting their access to Chinese goods and technologies.
Strategic and Economic Context
Negotiating Leverage Ahead of APEC
Analysts widely interpret these measures as a calculated show of leverage ahead of the Trump–Xi meeting at APEC.
By asserting tighter control over rare earth exports an area where China dominates with over 90% of global processing capacity Beijing is signaling that it remains a critical player in global supply chains and will use that dominance strategically in trade and technology negotiations.
Impact on Global Industry
The restrictions are expected to ripple through several sectors, including:
- Defense manufacturing (jet engines, missile guidance systems)
- Semiconductors and AI hardware
- Electric vehicles and renewable energy systems
The measures could also result in shortages and price spikes for key materials like neodymium, dysprosium, and terbium, used in magnets and advanced electronics.
Historical Precedent
This escalation follows earlier, narrower controls introduced in April 2025, which temporarily disrupted supply chains in Europe’s automotive sector and pushed global prices of refined rare earths up by over 20%.
Global Reaction and Countermeasures
The announcement has triggered urgent responses from Washington, Brussels, and Tokyo, with policymakers emphasizing the need to reduce dependency on China for critical minerals.
Diversification Push
The United States and its allies are accelerating plans to:
- Develop domestic rare earth mining and processing facilities.
- Invest in recycling technologies for critical minerals.
- Strengthen cooperation through frameworks such as the Minerals Security Partnership (MSP).
European Response
The European Commission reiterated that it is expanding its Critical Raw Materials Act to ensure “strategic autonomy” in the sourcing and refining of rare earths.
Meanwhile, private-sector investment in Australia, Canada, and Africa is increasing as nations race to build alternative supply chains.
Analysts’ Outlook
Experts note that the new restrictions represent one of the most assertive uses of export control policy in China’s modern trade history.
According to Liang Qiang, a Beijing-based trade scholar, “These controls are less about immediate economics and more about signaling they show that rare earths are China’s strongest geopolitical tool.”
Others warn that this escalation risks further fragmentation of the global tech ecosystem, as competing blocs form parallel supply chains and standards to mitigate dependence on Chinese materials.
With the Trump–Xi meeting looming, the move underscores the high stakes of U.S.–China strategic competition and the extent to which economic interdependence has become a battleground for geopolitical influence.
Looking Ahead
Industry observers expect the full impact of the new rules to become clearer in the coming months, as companies seek clarification on licensing requirements and potential exemptions.
If enforced strictly, the policy could reshape the rare earth trade for years, forcing a structural shift in how the world sources and manufactures critical technologies.
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