China Expands Rare Earth Export Controls Before Key Trump-Xi Meeting

Hong Kong, Oct 9 (AP) China has announced new export restrictions on rare earths and related technologies, expanding its control over these crucial materials ahead of a meeting later this month between U.S. President Donald Trump and Chinese President Xi Jinping. The Chinese Ministry of Commerce stated that foreign companies must now obtain special approval to export items containing even minute traces of rare earth elements sourced from China. Additionally, Beijing will impose permitting requirements for the export of technologies associated with rare earth mining, smelting, recycling, and magnet-making.

China is responsible for nearly 70% of the world's rare earth mining and controls about 90% of the global rare earth processing. This dominance has made access to these materials a central issue in ongoing trade discussions between Washington and Beijing. As President Trump has increased tariffs on many Chinese imports, Beijing has intensified its controls over these strategically important minerals, raising concerns about potential shortages for manufacturers in the United States and elsewhere.

The method of enforcing these new overseas policies by China remains unclear. Rare earth materials are vital for a range of products, from jet engines and radar systems to automotive and consumer electronics like laptops and phones. The Ministry of Commerce explained that these new restrictions aim to "better safeguard national security" and prevent the use of rare earths in "sensitive fields such as the military" derived from Chinese sources.

The ministry highlighted that certain unspecified "overseas bodies and individuals" had transferred rare earth elements and technologies out of China for military or other sensitive uses, which it claims caused "significant damage" to national security. These new restrictions were announced just weeks before an anticipated meeting between Trump and Xi on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea.

George Chen, a partner at The Asia Group, noted, "Rare earths will continue to be a key part of negotiations for Washington and Beijing." He added that while both sides desire more stability, much negotiation is still required before Trump and Xi can finalize a deal next year. Chen asserted that the ongoing issues are primarily negotiation tactics. Previously, in April, China imposed export restrictions on seven rare earth elements shortly after Trump introduced substantial tariffs on numerous trading partners, including China. While the supply situation remains tentative, China approved some export permits for rare earths in June and announced efforts to expedite the approval process. (AP) SCY SCY

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