China announced new sweeping export controls on rare-earth elements exports and related processing equipment, a move that expands Beijing’s leverage over global technology and defense supply chains just weeks before a planned meeting between Presidents Xi Jinping and Donald Trump.
The Ministry of Commerce’s Notice No. 61 of 2025 adds five elements, holmium, erbium, thulium, europium, and ytterbium, to a list of restricted rare earth materials, bringing the total number to 12. The notice also places dozens of pieces of extraction and refining equipment under licensing requirements and extends rules to some foreign-made products that incorporate Chinese-origin materials or use Chinese processing technology.
Under the new rules, exporters must obtain a permit from China’s commerce ministry before shipping rare earth materials overseas. The rules apply not only to goods manufactured in China but, for the first time, to certain foreign-produced magnets and semiconductor materials that contain Chinese-origin rare earths if that content equals 0.1% or more of the product’s value.
Most of China’s restrictions on rare earth material exports take effect immediately
Some provisions of the notice take effect immediately, while others come into force later this year. The ministry’s published translation shows parts of the measure are effective Dec. 1, 2025, with other provisions effective on the date of issuance, Oct. 9. Chinese state media and international outlets have also reported implementation timelines for specific items beginning in November and December.
Beijing said the step was needed to protect national security, arguing that rare-earth materials can have both civilian and military uses and that tighter controls are international practice. The ministry said certain foreign organizations had been diverting Chinese-origin materials for sensitive applications, posing risks to China’s security and interests.
Analysts and U.S. security experts warned the move could deepen supply-chain vulnerabilities for advanced weapons systems and chips. Rare earths are key inputs in everything from electric-vehicle motors and semiconductors to missile guidance systems and fighter-jet components, and China processes the lion’s share of the world’s rare-earth materials. Washington and allied governments have been racing to develop alternative sources and domestic processing capacity.
Shares of Chinese rare earth producers rose after the announcement
The announcement sent ripples through financial markets. Shares of Chinese rare-earth producers rose sharply, and U.S. miners and critical-minerals companies also gained on bets that Western governments will accelerate efforts to develop domestic supply chains. U.S. officials said they were assessing the implications of the new rules.
Observers said the timing, ahead of a planned Xi-Trump meeting on the margins of the Asia-Pacific Economic Cooperation summit later this month, suggests Beijing is signaling political leverage in trade and technology talks. Chinese officials, while defending the measures, said they remain open to export-control dialogue and cooperation through bilateral and multilateral channels.
The new controls are likely to accelerate efforts by the United States, Europe, and other partners to diversify sources of critical minerals and to expand domestic processing and magnet-making capacity. But experts cautioned that building the full upstream and downstream industrial base will take years, leaving short-term vulnerabilities for advanced manufacturing and defense programs.
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