China yesterday tightened its rare earth export controls, expanding restrictions on processing technology, and spelling out its intention to limit exports to overseas defense and semiconductor users.
The announcement from the Chinese 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 US, and the tightening comes weeks ahead of a possible face-to-face meeting between US President Donald Trump and Chinese President Xi Jinping (習近平) in South Korea.
Photo: AP
“From a geostrategic perspective, this helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in [South] Korea later this month,” said Tim Zhang, founder of Singapore-based Edge Research.
China produces more than 90 percent 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 would also be expanded to more types of magnets, and China is to limit some components and assemblies that contain restricted magnets.
China is the world leader in rare earth technology and equipment to recycle rare earths would now require a license to export, adding it to the long list of restricted processing technology.
The ministry’s announcement clarified for the first time some of the targets of China’s restrictions.
Overseas defense users would not be granted licenses, the ministry said, while applications related to advanced semiconductors would only be approved on a case-by-case basis.
A day earlier, US lawmakers called for broader bans on exports of chipmaking equipment to China.
China’s rare earth shipments have been growing steadily over the past few months as Beijing granted more export licenses, although some users still complain they are struggling to get them.
In a nod to concerns about access, the ministry said the scope of the items in its latest round of restrictions was limited and “a variety of licensing facilitation measures will be adopted.”
The new rules bar Chinese companies working with companies overseas on rare earths without permission from the ministry.
Manufacturers overseas using any Chinese components or machinery must also apply for licenses to export controlled items, the ministry said.
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