【By Guan Jiaqi, Observers Network】

On October 9th, China stepped up its export regulations on rare earths. Foreign media have been surprised by the fact that this move means that any foreign companies exporting magnets containing Chinese rare earth elements or produced using Chinese rare earth mining, smelting, and magnet manufacturing technologies must obtain approval from China.

The Washington Post reported on the 14th that China has gradually expanded the scope of its rare earth export controls this year in response to the tariff chaos under the Trump administration. The latest regulations further transform China's dominant position in the global rare earth supply chain into an effective means of safeguarding its own interests.

U.S. media noted that the most critical part of the Chinese measures is the global licensing requirement that will take effect on December 1st: according to the new regulations, enterprises anywhere in the world must obtain Chinese approval if they want to export rare earth magnets or semiconductor materials containing 0.1% or more of controlled rare earth metals originating from China.

The report cited analysts' views, stating that such comprehensive control measures mean that although it may take years for the United States to challenge China's leading position in the rare earth sector, China has already noticed that Washington is seriously considering establishing an alternative supply chain, so it hopes to find ways to maintain its leading position.

These people pointed out that the purpose of the new regulations introduced by China is to eliminate any avenues for circumventing China's existing controls. Part of the purpose of the new regulations is to prevent the United States from rallying countries such as Malaysia, Myanmar, and Kazakhstan to establish a rare earth supply chain bypassing China.

"The key goal is to plug loopholes," said an anonymous researcher at a think tank. "The new rare earth control measures are not a temporary action, but an important step in building a long-term protection framework for China's rare earth industry."

China Securities also stated on Monday that the new regulations will help China "dig deeper moats" by restricting the export of mining and smelting technologies, making it "much more difficult and significantly more costly" to build independent supply chains outside of China.

A German Mercator Institute for China Studies (MERICS), which calls itself the largest European think tank on China issues, its analyst Jacob Gunter told U.S. media that for years there has been the view that China's leading position in strategic industries should be used as a "killing blow." After systematically strengthening control over rare earths, China's recent actions seem to aim to "warn" all parties.

"There is no other meaning except interpreting it as China's intention to fully control all modern rare earth technology flows," he said.

California's Mountain Pass MP Materials Company mines rare earth minerals, Oriental IC

Data shows that China controls about 70% of global rare earth mining, 90% of separation and processing, and 93% of magnet manufacturing.

According to the new regulations announced by the Chinese Ministry of Commerce on October 9th, China will implement export controls on certain rare earth-related items and rare earth-related technologies that contain Chinese components.

The new regulations cover rare earth magnets and some semiconductor materials manufactured abroad that contain 0.1% or more of Chinese heavy rare earth components, as well as certain items produced overseas using rare earth mining, smelting, metal smelting, magnet manufacturing, and rare earth secondary resource recycling technologies originating from China. These items will be subject to the new regulations starting December 1st; for some items originating from China, the new regulations will apply immediately.

In addition, China will "generally not approve" export licenses for most military uses. Export applications involving the development of AI with potential military uses will also be "reviewed on a case-by-case basis."

Foreign media generally interpreted the Chinese move as hitting the American automotive supply chain, forcing the Trump administration back to the negotiating table. Since then, the rare earth issue has repeatedly appeared in multiple rounds of Sino-U.S. trade negotiations, and the timing of the new regulations coincides with the expected time for a formal meeting between the two leaders.

The Financial Times also pointed out that China's new restrictions are similar to the U.S. "Foreign Direct Product Rule" (FDPR) export control system, which the U.S. uses to prevent third countries from exporting semiconductor-related products to China.

The Wall Street Journal also analyzed that the latest Chinese rare earth measures are considered an "almost unprecedented" export control, giving China greater leverage in trade negotiations.

It is worth noting that when the new Chinese regulations were first released, President Trump resorted to the same tactics, re-launching tariff extortion, which instead caused another "Black Friday" for the stock market, with the three major indices plunging sharply, and Wall Street was in despair. Soon after, Trump and Treasury Secretary Becerra had to soften their tone, saying that imposing a 100% tariff on goods from China "does not necessarily" happen.

"China's rare earth layout has been brewing for years, and one move has stirred the nerves of Trump," reported The Washington Post with the title. The new Chinese regulations caught the White House off guard, and Trump even said it came "suddenly." However, in fact, this move is not a sudden action, but the inevitable result of China's years of in-depth efforts and strategic planning in the rare earth sector.

The report pointed out that in response to previous U.S. export restrictions on computer chips and other advanced technologies, China has gradually strengthened its voice in the rare earth sector by imitating this control logic, continuously enhancing its bargaining power.

Laila Khawaja, an analyst at Laozhou Economic Information, said that rare earths are China's "ace," and in her view, there is currently no other means that can make the U.S. loosen up on related issues. Khawaja further analyzed that the Chinese rare earth control measures "were carefully considered," with the core objective being to push the U.S. to ease its restrictions on chips.

On October 9th, the spokesperson for the Ministry of Commerce responded to inquiries regarding the enhanced export controls on rare earth-related items, stating that rare earth-related items have dual-use characteristics and implementing export controls is a common international practice. Therefore, the Chinese government lawfully implements controls on certain rare earth-related items originating from abroad that contain Chinese components, with the purpose of better safeguarding national security and interests, and fulfilling international obligations such as non-proliferation.

As a responsible major country, China's implementation of controls on relevant items reflects its firm commitment to maintaining world peace and regional stability, and actively participating in international efforts against proliferation. China is willing to strengthen communication and cooperation with all parties through multilateral and bilateral export control dialogue mechanisms, promote compliant trade, and ensure the safety and stability of the global supply chain.

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