On 9th October 2025, China’s Ministry of Commerce (MOFCOM) announced an expansion of its rare-earth export controls, adding five new elements to the existing restrictions on seven rare-earth minerals. This brings the total number of rare earth elements under Chinese export control to 12 out of the 17 globally recognised rare earth elements. These elements include holmium, erbium, thulium, europium, and ytterbium, all of which are crucial for the manufacturing of lasers, optical fibres and advanced semiconductors.
Under the new policy, companies exporting these elements or products containing them must obtain a licence from Chinese authorities. Foreign companies are also required to seek approval from the Chinese government and provide detailed information on the intended use of the materials. These new restrictions are expected to take effect next week.
Why Is China Tightening Control?
This move appears to be a strategic response to the escalating trade tensions between China, the United States, and their allies over technology and commerce. Earlier this year, Washington introduced a series of tariffs and trade restrictions targeting Chinese industries. According to a U.S. Geological Survey report, the United States depended on China for around 70% of its rare-earth compound imports between 2020 and 2023, primarily for defence technologies, making it one of the most affected nations. By tightening export controls, Beijing strengthens its negotiating position ahead of the scheduled talks between President Xi Jinping and U.S. President Donald Trump later in October.
The policy also aligns with China’s domestic objectives. By making exports more restrictive, local processing and manufacturing can be encouraged, keeping the high-value parts of the supply chain inside China. It also signals to the world that China intends to maintain leverage in critical technologies rather than simply a raw-material supplier.
Global Implications
Following this move, forces within the U.S. have described the situation as an “economic coercion” and a “global supply chain power grab” that could reshape the global supply chain. Countries like the U.S. and the EU heavily reliant on Chinese rare-earth minerals, may face shortages or rising costs in sectors such as electric vehicles, renewable energy, and defence. While this development may accelerate efforts by other countries to diversify their sources and invest in domestic processing capabilities, such transitions are capital-intensive and time-consuming, making continued reliance on China difficult to replace in the near term.
Written by Morenike Kuye
Edited by Olivia Eliadou
Sources- BBC, Reuters, Bloomberg
Image – Getty Images
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