China’s Critical Minerals and Rare Earth Export Controls: The New Non-Tariff
Battlefield

Rare Earths: The Strategic Core of Economic Competition

Framed as national security measures, China’s Rare Earth controls have recently

operated as sophisticated non-tariff barriers. China's approach to critical minerals and rare earths has evolved from viewing them primarily as economic commodities to recognizing them as strategic national assets with dual economic and security significance. This paradigm shift is reflected in the comprehensive legal and regulatory architecture developed between 2020 and 2025:

China’s Critical Minerals and Rare Earth Export Control System: Timeline

Establishing the Legal Foundation (2020–2023)

• 2020: China promulgated the Export Control Law, laying the groundwork for

  systematic export controls.

• 2023: Rare earths were added to export reporting catalogues, and controls

  expanded to gallium, germanium, and graphite. Restrictions on the export of rare

  earth processing technologies were introduced.

Expanding and Strengthening Controls (2024)

• 2024: The Rare Earth Management Regulations were officially released and

  came into effect, requiring all rare earth product imports/exports to comply with China’s trade and export laws. Export controls were extended to antimony and

  superhard materials.

Targeted Restrictions and Entity Lists (2025)

• 2025: China expanded controls to additional minerals (tungsten, tellurium,

  bismuth, molybdenum, indium) and specific rare earth elements (samarium,

  gadolinium, terbium, dysprosium, lutetium, scandium, yttrium, holmium, erbium,

  thulium, europium, ytterbium). Multiple U.S. and Taiwan entities were added to

  the export control list, further restricting access. In addition, new controls were

  introduced on technologies related to critical minerals and rare earths.

This series of measures underscores how China is methodically tightening its grip on

Rare Earth resources through a phased and deliberate approach. Beginning with the establishment of a robust legal and regulatory framework, China has progressively

introduced specific export restrictions and targeted controls on select minerals and

foreign entities. This stepwise strategy enables China to wield Rare Earths not only as

economic assets but also as instruments of geopolitical leverage.

Scope of Control

China’s export controls apply both to the physical presence of rare earth materials in

products and to the use or transfer of rare earth-related technologies.

Material-Based Controls

As of the latest regulatory updates, a total of 12 rare earth elements are now subject to

export controls in China.

• Effective April 4, 2025:

  Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and

  Yttrium are covered by the regime.

• Effective November 8, 2025:

  Holmium, Erbium, Thulium, Europium, and Ytterbium are added to the

  controlled list.

These elements—whether present in raw form, alloys, oxides, permanent magnets, or

target materials—are all subject to China’s export control requirements, and a license is

required.

No Minimum Content Exemption:

• China’s export controls apply even to trace amounts of controlled rare earths. For example, an alloy containing just 1% of a controlled rare earth element triggers export licensing requirement.

Form and Processing Matter:

• If rare earth materials are simply shaped (e.g., magnetic blocks, rings, sheets), they are considered controlled. These forms can be easily separated and reused, so they remain under strict regulation.

• If rare earths are deeply processed—such as magnets permanently fixed

  inside motors, sensors, or speakers (embedded, glued, or injection molded)—these products are generally exempt. The critical factor is whether the rare earth material can be removed and reused. If it’s locked in place and cannot be extracted, the product is less likely to be controlled.

• For downstream products like catalyst powders, phosphors, or rare earth- based luminescent materials, significant processing usually means they’re not controlled.

• Everyday consumer goods—such as magnetic phone cases or toys—are also typically exempt.

Technology-Based Controls

China’s controls extend beyond raw rare earth materials to cover a wide range of

technologies related to rare earths. According to the latest Ministry of Commerce

(MOFCOM) Notice. 62, the following are subject to export licensing:

• Rare earth mining, refining, and separation technologies.

• Metal smelting and magnet manufacturing technologies (including samarium-

  cobalt, neodymium-iron-boron, and cerium magnet tech).

• Technologies for recycling and reusing rare earth secondary resources.

• Technical documentation and data, such as design drawings, process

  specifications, simulation data, and manufacturing parameters.

Exporters must apply for a license before transferring or providing these technologies or

related documentation to foreign entities, whether through trade, licensing, investment,

technical cooperation, or any other means. Unlicensed export or provision of these

technologies is prohibited and subject to penalties under Chinese law.

Extraterritorial Reach:

• China’s export control regime for rare earths now systematically applies

  extraterritorial jurisdiction, Article 1 of MOFCOM Announcement No. 61 and

  Article 49 of the Regulations on Export Control of Dual-Use Items require foreign

  organizations and individuals exporting rare earth-related items to third countries

  to obtain a MOFCOM license—even if the items are manufactured or processed

  outside China.

Three Main Control Principles

• Origin-Based Control (Effective October 9, 2025):

  All rare earth metals, alloys, oxides, permanent magnet materials, and target materials listed in Annex 1 that originate from China are subject to export control. Any product in these categories made with Chinese-origin materials must comply with Chinese export control regulations and require an export license.

• De Minimis Rule (Effective December 1, 2025):

  If a product manufactured outside China contains 0.1% or more (by value) of any China-origin rare earth metal, alloy, or oxide (including Samarium, Dysprosium, Gadolinium, Terbium, Lutetium, Scandium, Yttrium, and their specified alloys and oxides), it is subject to Chinese export controls. This applies to permanent magnets and rare earth target materials. An export license from China is required, regardless of where the product is made.

• Foreign Direct Product Rule (Effective December 1, 2025):

  Products manufactured outside China using Chinese-origin technologies—such as rare earth mining, refining, smelting, magnet production, or recycling—are subject to Chinese export controls, even if they do not contain any physical Chinese materials. This covers rare earth metals, alloys, oxides, permanent magnet materials, and target materials made with these rare earths or alloys, as listed in Annex 1 of Announcement No. 61.

  
  

Compliance Responsibilities

• Under this framework, any foreign entity that receives Chinese-origin controlled

  items and processes them into permanent magnets or rare earth target materials

  containing 0.1% or more by value must obtain an export license before shipping

  these products onward.

• This introduces a new layer of responsibility and regulatory oversight for

  companies outside China. They must monitor, document, and report the presence of Chinese-origin controlled content in their products—even at very low levels.

• Importantly, compliance liability must also be passed on to the next customer in

  the supply chain.

• Each consignee, importer, or end-user must receive a Compliance Notification

  Letter, informing them of their obligations under China’s export control laws.

  When transferring or exporting such products, the notification must be drafted

  according to the requirements of Announcement No. 61 of 2025, ensuring that

  every subsequent recipient is aware of and responsible for compliance.

Impact of China's Rare Earth Export Control System on Global Supply Chains

Since October 2025, China’s rare earth export controls have fundamentally reshaped

the landscape for global manufacturers and technology companies. With the release of

MOFCOM’s Notices No. 61 and 62, the regulatory framework has become broader and

more intricate, extending China’s reach far beyond its borders.

• The export licensing process for rare earths and related technologies is notably

  complex, operating as a two-tier approval system. Applications are first reviewed

  by provincial-level commerce authorities, who typically forward complete

  submissions to MOFCOM. MOFCOM then conducts a substantive review,

  officially set at 45 working days from acceptance. However, in reality, this

  timeline is frequently exceeded due to common delays—such as requests for

  supplemental documentation, technical appraisals, export opinions, and

  additional scrutiny for applications involving national security or major interests,

  which may require State Council approval.

• Given these complexities, companies should expect the actual licensing process

  to take at least two to three months, and often longer. The documentation

  requirements are extensive, including detailed trading history, mapping of the

  industrial chain, and comprehensive information about downstream suppliers.

  This level of scrutiny adds significant uncertainty and complexity, especially for

  supply chains that rely on just-in-time manufacturing.

• Crucially, the new regime means that even foreign-made permanent magnets

  and rare earth target materials containing as little as 0.1% Chinese-origin rare

  earths now require an export license. This extraterritorial clause introduces

  additional delays, as overseas export operators must follow the same rigorous

  license application process as domestic exporters—including provincial review,

  MOFCOM approval, and all associated documentation and technical appraisals.

• As a result, if another export license is required for foreign-made magnets or

  target materials, the total process can easily extend to six months or more,

  significantly delaying the entire supply chain. Companies are strongly advised to

  plan export schedules well in advance and allow ample time for license

  applications to avoid disruptions.

In summary, China’s Rare Earth export control system is more than a set of licensing

requirements. It is a comprehensive and tightly coordinated mechanism that governs

the entire value chain—from raw material extraction and processing to technology

transfer and end-use verification. By combining regulatory enforcement, cross-agency

oversight, and restrictions on technical know-how, China has established a robust

framework that not only controls the flow of Rare Earths but also reinforces its strategic

leverage in global supply chains. This integrated approach significantly raises the

barriers for foreign entities seeking to diversify or localize supply, underscoring the long-

term implications for global manufacturing and technological independence.

This article reflects the author's views and not necessarily those of the Export Controls Australia Group.