BEIJING: China tightened its rare earth export controls on Thursday, expanding restrictions on processing technology and spelling out its intention to limit exports to overseas defence and semiconductor users.
The announcement from the Ministry of Commerce clarifies and expands sweeping controls announced in April that caused shortages around the world before a series of deals with Europe and the US eased but did not eliminate the supply crunch.
The controls are a major bargaining chip for China in its trade talks with the United States, and the tightening comes weeks ahead of a face-to-face meeting between Presidents Donald Trump and Xi Jinping in South Korea.
“From a geostrategic perspective, this helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in Korea later this month,” according to Tim Zhang, founder of Singapore-based Edge Research.
China produces over 90% 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.
Restrictions on exporting the technology to make rare earth magnets will also be expanded to more types of magnets, and China will limit some components and assemblies that contain restricted magnets.
China is the world leader in rare earth technology, and equipment to recycle rare earths will now require a licence to export, adding it to the long list of restricted processing technology.
The commerce ministry’s announcement clarified for the first time some of the targets of China’s restrictions. Overseas defence users will not be granted licences, the ministry said, while applications related to advanced semiconductors will only be approved on a case-by-case basis.
A day earlier US lawmakers called for broader bans on the export of chipmaking equipment to China. Samsung Electronics declined to comment, and chipmakers TSMC and SK Hynix did not immediately respond to questions.
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