China Expands Rare Earth Export Controls, Extending Reach to Foreign-Made Products

China has expanded its export controls on rare earth materials, now requiring foreign companies to obtain approval for exporting products containing even minimal amounts of Chinese-origin rare earths or produced using Chinese technology. This move mirrors the United States' foreign direct product rule, which extends U.S. jurisdiction over foreign-made products incorporating U.S. technology.

Under the new regulations, foreign firms must secure Chinese government approval to export magnets containing as little as 0.1% by value of Chinese-origin rare earth elements. This policy applies to products manufactured using Chinese rare earth technologies, including mining, processing, and magnet production. The measures are set to take effect on December 1, 2025.

The Chinese Ministry of Commerce stated that these controls aim to "better safeguard national security and interests" and prevent the transfer of critical items for military or sensitive applications by "overseas bodies and individuals."

Analysts note that this strategy reflects China's adoption of U.S. trade practices. Neil Thomas, a fellow on Chinese politics at the Asia Society Policy Institute's Center for China Analysis, commented, "Beijing is copying Washington's playbook because it saw firsthand how effectively U.S. export controls could constrain its own economic development and political choices."

The new export controls are expected to have significant implications for global supply chains, particularly in the technology and defense sectors, which rely heavily on rare earth materials. Companies worldwide may face increased compliance requirements and potential disruptions as they navigate the evolving regulatory landscape.