China is expanding its export controls for rare earths. Observers see the new regulations against the background of growing tensions in technology competition with the USA.
China is tightening its export controls for rare earths. In two separate announcements, the Commerce Department announced new restrictions related to the strategically important metals. Accordingly, the export of technologies and expertise for the mining and processing of rare earths or the production of the associated magnets is prohibited without authorization.
Rare earths are a group of 17 chemical elements. They are found in minerals and ores. The rare earths include lanthanides and the two metals scandium and yttrium. In contrast to metals such as gold and silver, rare earths do not occur in nature in their pure form and can only be obtained using complex and expensive processes. They are crucial for modern technologies such as smartphones, wind turbines and electric cars. China is the world’s largest producer and processes a large proportion of global quantities.
Chinese authorities must grant approval
This applies, among other things, to the know-how of mining, processing and recycling metals. Software, technical plans and documents for maintenance or repairs also fall under the new rules. This could make it more difficult for foreign companies to set up independent processing outside of China.
In addition, products outside of China that contain rare earths from China or were manufactured using Chinese processes are also recorded for the first time. According to the plans, companies that export such goods to other countries will have to apply for approval from the Chinese authorities from December 1st. According to the government, exports that are intended for military purposes or go to armies should generally not be approved.
Signal to Washington before top meeting
For observers, the new tightening measures do not come as a complete surprise. They point to the growing tensions in technology competition with the USA. The announcement comes shortly before an expected meeting between state and party leader Xi Jinping and US President Donald Trump on the sidelines of the upcoming APEC summit in South Korea.
A customs dispute has been simmering between the two countries for months. Against this background, Beijing had already limited the export of certain rare earths and magnetic products in April. The export restrictions are also causing problems for European and German companies. In September, the European Chamber of Commerce in China warned again of further production losses among its member companies due to Beijing’s export controls.
