China tightens rare Earth export rules, restricts defence and semiconductor access
China has tightened its rare earth export controls, requiring licenses for processing technologies and restricting overseas collaboration. The new rules specifically block defence users and limit semiconductor-related exports.
New Delhi: China has tightened its exportation of rare earths in order to limit the export of materials to foreign countries in the defence and high-technology industries. According to a statement made by the Ministry of Commerce, the new regulations that became effective immediately state that exporters are to receive government permission regarding a variety of processing technologies, starting with mining and smelting, through the maintenance and upgrades of the production lines.
The action is part of China's larger plan to position itself in the international market of rare earths. The nation produces approximately 60 percent of the world output of mines and almost 90 percent of finished products and permanent magnets. Rare earth elements play a crucial role in numerous high-technology uses, such as electric cars, aircraft engines, military radar systems, and semiconductors.
Broader technology restrictions
The new rules are an expansion of the previous measures announced in April, which had led to shortages globally prior to supply returning under agreements with the U.S. and Europe. The export restrictions are also extended on additional types of rare earth magnets and equipment utilised in the recycling of rare earths. An export licence has been added onto a Chinese manufacturer in any of the international firms that use Chinese materials or manufacturing equipment.
Defence and semiconductor targets
On the one hand, China has mentioned its target sectors explicitly. Licenses will not be issued to overseas defence users, and cases to use advanced semiconductors will be examined on an individual basis. Even higher is the restriction on Chinese companies that operate overseas to partner with foreign companies to work on rare earth projects without involving the government's approval, which further restricts the transfer of important technology of the country.
The experts argue that the actions would reorganise the world supply chains and make the industries that require the rare earths more costly. It is also observed by observers that such controls strengthen the strategic position of China on the world high-tech markets.