On October 9, 2025, China’s Ministry of Commerce of the People’s Republic of China (MOFCOM) announced a major expansion of export controls on rare earth elements (REEs), heavy-RE magnet technologies and related equipment. These controls mark a significant escalation in China’s use of strategic materials policy and carry important implications for global supply chains, industrial manufacturers and logistics providers.
What Has Changed?
- Expansion of Restricted Materials and Technology
China increased the number of rare earth elements subject to export control—from 7 previously restricted elements to 12 elements in total.
In addition, China now covers equipment, technologies and manufacturing processes (for example magnet production equipment, mining and separation equipment) in its export control regime.
- Licensing Requirements for Foreign Goods & Technology
New rules require that foreign-produced items that incorporate ≥ 0.1 % Chinese-origin rare earths also require a Chinese export licence — even if manufactured abroad.
Chinese firms are also prohibited from cooperating in rare-earth processing-technology ventures overseas without MOFCOM approval.
- Strategic Targeting of Defense & Semiconductor Uses
China explicitly stated that overseas defence users will be denied licences, and that items used for advanced semiconductor manufacturing will be subject to case-by-case reviews.
Why It Matters
- China’s Dominance in Rare Earths
China currently controls about 90% of global processed rare earth capacity and a large share of magnet manufacturing.
This dominant position means China’s policy has high potential to affect major industries: electric vehicles, wind turbines, consumer electronics, semiconductors, defence systems.
- Supply-Chain Impact
Global data show that China’s rare-earth magnet exports dropped 6.1% month-on-month in September 2025 (to ~5,774 tons) ahead of the tighter rules.
The effect: manufacturers relying on Chinese‐origin materials may face delays, cost increases, and sourcing risk.
- Geopolitical Leverage
The timing of the announcement—just before a planned summit between Donald Trump and Xi Jinping—suggests the controls are also designed as a lever in trade and technology negotiations.
What Companies and Traders Should Do
- Map out rare-earth exposure: Companies, especially in magnets, EVs, semiconductors, must audit whether inputs contain Chinese-origin rare earths or processing technologies.
- Verify vendor and origin information: For goods or parts incorporating rare earths, ensure vendor declarations are consistent and compliant.
- Engage customs & export-control experts: New controls create licensing risk, denial risk, and delays — forwarders and logistics providers must include compliance checks.
- Diversify supply chains: Given the concentration of processing in China, firms may accelerate sourcing from non-Chinese countries or invest in domestic supply-chain resilience.
- Monitor regulatory legislation: These are evolving rules. Items which may escape regulation now could be added later (for example the rule extends internationally in December).
Conclusion
China’s expanded rare earth export controls represent a strategic move which blends industrial policy with trade leverage. While not an outright trade war measure alone, they underscore how critical-material supply chains are becoming battlegrounds in global technology and geopolitical competition.
For global manufacturers, importers and freight logistics firms — the message is clear: the era of “just import and assemble” is over. Supply-chain visibility, origin tracking and compliance readiness are now non-negotiable.