Beijing Tightens Grip on Critical Minerals:
As Presidents Donald Trump and Xi Jinping prepare for a landmark meeting later this month, China has announced comprehensive export controls on rare earth minerals, strengthening an already tight hold over materials essential to global technology, defense, and green energy production.
Beijing’s recent decision adds 5 new rare earth minerals to its restricted export list, raising the total amount of minerals under license control to 12. The implementation of these restrictions also covers dozens of pieces of equipment used in mining and refining, providing China with further oversight in nearly every aspect of the supply chain.
The message is straightforward; as the world’s sole processor of over 90% of global rare earths, China is signaling it can, and will weaponize its market share at any point.
The Significance of Rare Earths:
The 17 Elements classified as “Rare Earth’s” due to their exclusivity and the vital role they play in serving much of the world’s capacity building are the unseen foundation of the modern global economy. They power electric vehicles, wind turbines, smartphones, aircraft engines, and most famously advanced semiconductors.
While the elements themselves are relatively abundant, processing them safely and efficiently requires complex refining methods that only a handful of countries have mastered. Over decades, China has consolidated control not only over extraction, but of midstream and downstream processing, essentially making the rest of the world dependent on Beijing’s output.
This level of dominance gives China an enormous, unmatched leverage at a time when strategic competition with the United States is at an all time high.
What The New Controls Do:
The latest regulations expand Beijing’s authority in three crucial ways. First, they bring an additional 5 rare earths under restriction, bringing the total to 12 out of the 17 rare earths that now require export licenses. Second, they impose new limits on refining and mining equipment, subjecting dozens of specialized tools to tighter control. Lastly, they extend oversight to downstream products, which marks the first time that China says it will regulate some foreign producers that use Chinese raw materials or equipment abroad.
Exporters must now apply for licenses through the Ministry of Commerce, which has pledged to “facilitate approvals” but also made it clear that applications linked to defense, semiconductors, or artificial intelligence will be “rejected or heavily scrutinized.”
An earlier round of controls in April led to shortages of rare earth magnets that forced temporary shutdowns at several global car plants- a disruption that served as a reminder to the international community of the system’s fragility.
Extending China’s Reach Abroad:
What makes this round of measures especially significant is its extraterritorial reach. For the first time, Beijing is extending its export control regime to foreign companies that use Chinese rare earths or Chinese-made refining equipment in production.
In practical terms, a rare earth magnet manufacturer in Japan using Chinese equipment must now obtain Chinese approval before selling products abroad. A European processor using Chinese-sourced dysprosium or neodymium must similarly comply with Chinese export rules.
This mirrors the U.S. “foreign direct product rule,” which Washington has used for decades, most notably in the semiconductor sector, to block companies from selling advanced chips to China if they were made using American technology.
Beijing’s decision, therefore, marks a notable strategic inversion: the same tool the U.S. deployed to constrain China’s tech ambitions is now being used by Beijing to limit global access to critical minerals.
What Is Not Covered:
Despite its scope, China’s new controls are not universal. The rules apply specifically to producers and refiners, not to every product containing trace rare earths.
For instance, a washing machine built in Germany using a Chinese-made magnet does not require approval to be sold within Europe. However, if a German company manufactures those magnets using Chinese raw materials, it must now seek authorization from the Chinese Ministry of Commerce.
That distinction, though technical, allows Beijing to focus its power where it matters most, at the industrial bottlenecks that give it leverage over global supply chains.
China’s Enforcing Power:
Enforcement remains uncertain. While Chinese export control law includes penalties ranging from fines to imprisonment, it would be difficult to prosecute foreign companies operating outside China’s borders.
However, enforcement may not even require prosecution. For firms dependent on Chinese feedstock, machinery, or suppliers, the threat of being cut off could be enough to ensure compliance.
This coercive leverage is likely to accelerate Western efforts to diversify supply chains. The United States, the European Union, and Japan have all announced new investments in rare earth mining and processing, but replicating China’s scale and expertise could take a decade, likely much longer.
Beijing’s Strategic Signal:
The timing of these restrictions, coming just before the Trump-Xi talks, is not coincidental. Beijing appears to be reminding Washington that its dominance in critical minerals is not merely economic; it is a strategic asset.
In the broader context of global trade tensions, these measures serve as both deterrent and demonstration: deterrent, by warning against attempts to isolate China technologically; demonstration, by showing that supply chains once considered apolitical are now deeply intertwined with geopolitics.
As one Chinese analyst quoted in domestic media put it, the move ensures that “whoever seeks to contain China must first understand the cost of doing so.”
The Emerging Era of Resource Weaponization:
China’s new rare earth export controls mark another step in what analysts increasingly call the “weaponization of interdependence.” Just as the U.S. leveraged its technological dominance through export bans on advanced semiconductors, China is now flexing its power in critical raw materials.
Yet, this approach carries risks for Beijing as well. Each tightening of control pushes Western nations to accelerate decoupling, develop alternative suppliers like Australia, Canada, and the U.S., and invest heavily in rare earth recycling and refining technologies.
In the short term, however, China’s grip remains unmatched. It can use licensing delays, bureaucratic scrutiny, or outright denials to influence global markets with precision, all while maintaining plausible deniability that it is simply enforcing regulation.
This wave of regulatory restrictions is less about cutting off the world from rare earth access and more about reminding the international community who is securely in control.
Conclusion:
Beijing’s expanded rare earth export controls represent not just an administrative tightening but a strategic recalibration of global trade leverage. They underscore that in the new era of great-power competition, supply chains are battlefields, and the minerals buried beneath them are as powerful as missiles or microchips.
For the United States and its allies, the challenge is now existentially clear: to secure the materials that power modern life without depending on a single geopolitical rival. For China, the calculus is simpler, control the chokepoints, and you control the future.
