China has taken a further step in its policy of control over exports of rare earth and the technologies linked to its processing, narrowing the filter for certain end uses and foreign actors. The focus is on sensitive sectors, with particular attention to defense and advanced semiconductor manufacturing.
The Ministry of Commerce has announced that these measures, which are in addition to those already applied in April, seek strengthen national security and final destination monitoring of materials and strategic innovations. Some provisions take effect immediately, while others will be activated on specific dates and with a broader scope.
What Beijing announces
The commercial authority expands the control perimeter to the export of extraction, processing and manufacturing technologies magnets of rare earths, as well as certain products that incorporate them. Without authorization, these developments will not be permitted to leave the country, nor will cooperation with third parties abroad.
The ministry has also specified that the list of items under control has been adjusted with a scope that they say is "limited", while promising measures to facilitate licensing to operations that meet regulatory requirements, including clarifications on critical raw materials.
Who is affected and what is left out
The statement makes it clear that Foreign users in the defense sector will not receive licensesFor projects involving cutting-edge semiconductors, applications will be reviewed on a case-by-case basis, with special scrutiny.
Likewise, research and development in artificial intelligence with potential military applications will be subject to enhanced control. However, exemption from licenses is contemplated for shipments for humanitarian aid purposes that fit within the current legal framework.
Semiconductors and technical thresholds
The new rules specify technical thresholds: projects related to 14 nanometer chips or more advanced, memories with 256 layers or higher and the equipment used to manufacture them, all of them linked to critical minerals.
The same caution will apply to the activities of R&D and production linked to those components, including critical tools and consumables that can support high-performance nodes and architectures.
Magnets, recycling and process technologies
Limitations are expanded to more types of rare earth magnets and, in addition, the export of certain components and assemblies containing them is restricted if they are on the restricted list. China adds the license requirement to export equipment destined for the recycling of these materials.
China, which is the world leader in these chains —produces more than 90% of processed rare earths and magnets globally—, adds to the list the license requirement to export equipment intended for the recycling of these materials.
Extraterritorial scope and deadlines
Another key point is the extraterritorial dimension: Foreign companies that use Chinese machinery, materials or components related to rare earths must apply for a license if they intend to export controlled items.
The ministry has indicated that These extraterritorial rules will come into force on December 1, while the rest of the package of measures has been in place since its announcement.
Geopolitical context and negotiations
The tightening comes at a time of technological tensions, following the call from US legislators to expand the ban on chip manufacturing equipment destined for China. At the same time, Beijing is framing its decision in terms of non-proliferation commitments and the search for alliances to ensure the supply of critical materials.
Industry sources interpret that these restrictions may increase the China's negotiating capacity ahead of an upcoming meeting between the leaders of both countries in South Korea, in a context in which the supply of critical materials has become a strategic lever.
Market impact and sectoral reaction
On the stock market, there were notable advances: Northern Rare Earth Group rose 8,3% and Shenghe Resources fell 6,3% after the measures were announced. There was also movement in Asian chip manufacturers.
TSMC closed with a 1,8% increase after reporting better-than-expected quarterly revenue. In South Korea, the sector is monitoring the impact while reminding everyone that the local market was closed for a national holiday.
As for the companies, Samsung declined to comment, and SK Hynix and TSMC They did not immediately respond to additional inquiries about the scope of the new rules.
Flow of exports and licenses
After the April controls, the rare earth shipments from China have grown steadily as more licenses were granted, although some users still complain about the difficulty of the process.
The Ministry of Commerce maintains that the new package has a limited scope and that various measures will be adopted to simplify licensing where appropriate, including clearer guidelines and processes for compliant operators.
The portfolio also prohibits the unauthorized cooperation of Chinese companies with foreign entities in rare earth projects, strengthening the supervision of alliances, know-how transfers and joint developments.
With this regulatory adjustment, Beijing seeks a balance between ensuring the traceability and end use of critical materials and maintain the continuity of global chains when sensitive interests are not compromised.