China Tightens Rare Earth Export Controls Ahead Of Crucial Trump-Xi Summit In South Korea

China has dramatically expanded its rare earths export controls, adding five new elements to its restricted list and imposing sweeping new requirements on foreign producers, in a move that dramatically escalates tensions ahead of a crucial meeting between Presidents Donald Trump and Xi Jinping later this month.

The announcement by China's Ministry of Commerce brings the total number of restricted rare earth elements to 12 out of the 17 rare earths vital for products ranging from electric vehicles to military radars and advanced semiconductors.

The five newly restricted elements—holmium, erbium, thulium, europium and ytterbium—join seven others on China's export control list, with the restrictions taking effect on 8th November 2025.

Foreign companies producing rare earths and related magnets will now require a Chinese export licence if their final product contains or is made with Chinese equipment or material, even if no Chinese companies are involved in the transaction.

A Chinese commerce ministry spokesperson stated the restrictions aim to safeguard national security by preventing materials from being used in military and other sensitive fields.

The ministry cited instances where foreign organisations had transferred Chinese rare earth items or technologies, with some materials being used in military fields, causing significant harm to China's national security.

A White House official told Reuters the rules were announced without any notice and imposed in an apparent effort to exert control over the entire world's technology supply chains.

The timing has not gone unnoticed, with the new curbs coming just weeks before Trump and Xi are scheduled to meet on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea at the end of October.

Tim Zhang, founder of Singapore-based Edge Research, observed that the move helps increase leverage for Beijing ahead of the anticipated Trump-Xi summit in South Korea later this month.

China produces over 90 per cent of the world's processed rare earths and rare earth magnets, positioning the country as the dominant force in a sector critical to global technology and defence industries.

The restrictions extend well beyond raw materials to encompass dozens of pieces of rare earth processing equipment and technologies, including mining, smelting and separation, magnetic material manufacturing, and recycling.

Chinese nationals are also prohibited from supporting overseas rare earth extraction and magnet manufacturing without government approval.

Companies tied to foreign militaries or placed on export-control lists will be denied permits, whilst applications for rare earths intended for advanced semiconductors and artificial intelligence with potential military applications will be reviewed on a case-by-case basis.

The regulations mirror rules the United States has implemented to restrict other countries' exports of semiconductor-related products to China, and follow US lawmakers' call on Tuesday for broader bans on the export of chipmaking equipment to China.

Analysts suggest the world is likely entering a period of structural bifurcation, with China localising its value chain whilst the US and allies accelerate their own.

The expanded controls build upon restrictions Beijing announced in April that caused shortages around the world, before a series of deals with Europe and the US eased the supply crunch.

It remains unclear how Beijing intends to enforce its new regime, especially as the US, the European Union and others race to build alternatives to the Chinese rare earth supply chain.