China Hands Down Tighter Control on Rare Earth Exports, Rattling Global Tech Supply Chains
Beijing — In a sudden, sweeping move early Thursday, China expanded its export controls over rare earth elements, extending its grip on materials crucial to semiconductors, electric vehicles, and defense systems worldwide. The announcement has sent immediate shock waves through global tech and manufacturing circles.
Under the new regulations, five more rare earth elements—holmium, erbium, thulium, europium, and ytterbium—will now be tightly restricted. The controls also target export of refining technologies and impose licensing requirements on foreign companies using Chinese materials or equipment, even if the final product is not made in China. Beijing says the expanded rules take effect November 8 for materials and November 1 for related foreign-producer compliance.
This move comes just weeks before a scheduled summit between U.S. President Donald Trump and China’s President Xi Jinping, elevating fears that these restrictions may be a leverage play in looming trade negotiations. A White House official, speaking on condition of anonymity, told Reuters the U.S. is “closely assessing any impact,” and warned the abrupt restrictions could shake global supply chains.
China already dominates over 90 percent of the world’s processed rare earth supply, and today’s expansion marks a more aggressive turn. The five newly regulated elements are key in high-performance magnets, lighting, lasers, and other critical technologies. In addition, the new rules restrict exports to advanced semiconductor users, making licensing for 14-nm and above chip fabrication, memory chips with 256 layers or more, and AI-related research subject to stricter review.
“The White House and relevant agencies are closely assessing any impact from the new rules, which were announced without any notice and imposed in an apparent effort to exert control over the entire world’s technology supply chains,” said the U.S. official.
Analysts say this escalation could force rival nations and corporations to accelerate efforts to reduce dependence on Chinese material chains. “We’re likely entering a period of structural bifurcation—with China localizing its value chain and the U.S. and allies accelerating their own,” remarked Neha Mukherjee, a rare earths expert from Benchmark Mineral Intelligence.
Markets reacted immediately. Shares of Chinese rare earth firms surged—Northern Rare Earth, China Rare Earth Resources, and Shenghe Resources jumped 10 percent, 9.97 percent, and 9.4 percent respectively. At the same time, stock of foreign rare earth companies also rallied: Critical Metals gained 25 percent; MP Materials, 2.5 percent; USA Rare Earth, 15 percent.
Semiconductor giants watched nervously. Though South Korea’s markets were closed Thursday, companies like Samsung and SK Hynix noted the changes and said they would assess the impact. Taiwan’s TSMC rose modestly in afternoon trades—investors seeing possible reprieve if supply constraints shrink Chinese leverage.
One senior executive at a major chip manufacturer, speaking off the record, said the timing is brutally sharp: “We expected movement in rare earths policy, but not something this sweeping, this fast. R&D, production, supply contracts—they all feel under threat now.”
Observers emphasize that the new rules do not outright ban exports, but subject them to licensing and scrutiny, especially for advanced technology users. Chinese authorities say some licensing facilitation measures will be adopted to soften the blow. But many doubt relief will be enough.
In global boardrooms and factories, engineers and decision makers are scrambling. Firms are accelerating investments into rare earths mining and processing outside China, reviving projects in the U.S., Australia, and Africa. Supply chain maps are being redrawn, as dependencies on Chinese raw materials are being assessed as strategic liabilities.
For developing industries—electric vehicles, robotics, military systems, AI hardware—this shift is not academic. It could translate into delays, cost surges, or outright restrictions in access to essential components. In the coming months, it may define who holds the power in the next tech arms race.
From Beijing’s perspective, this is a calculated assertion of control at a pivotal moment. From the rest of the world’s perspective, it is a warning: in a world driven by chips, rare earths are the silent currency.
