China outlines more controls on exports of rare earths and technology

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HONG KONG (AP) — China outlined new curbs on exports of rare earths and related technologies on Thursday, extending controls over use of the elements critical for many products ahead of a meeting later this month between President Donald Trump and Chinese leader Xi Jinping.

The regulations announced by the Ministry of Commerce require foreign companies to get special approval to export items that contain even small traces of rare earths elements sourced from China.

Beijing also will impose permitting requirements on exports of technologies related to rare earths mining, smelting, recycling and magnet-making, it said.

China accounts for nearly 70% of the world’s rare earths mining. It also controls roughly 90% of global rare earths processing. Access to such materials is a key point of contention in trade talks between Washington and Beijing.

As Trump has raised tariffs on imports of many products from China, Beijing has doubled down on controls on the strategically vital minerals, raising concerns over potential shortages for manufacturers in the U.S. and elsewhere.

It was not immediately clear how China plans to enforce the new policies overseas.

The critical minerals are used in a broad range of products, from jet engines, radar systems and automotives to consumer electronics including laptops and phones.

The new restrictions are to “better safeguard national security” and to stop uses in “sensitive fields such as the military” that stem from rare earths processed or sourced from China or from its related technologies, the Commerce Ministry said.

It said some unnamed “overseas bodies and individuals” had transferred rare earths elements and technologies from China abroad for military or other sensitive uses which caused “significant damage” to its national security.

The new curbs were announced just weeks ahead of an expected meeting between Trump and Chinese President Xi Jinping in late October on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea.

“Rare earths will continue to be a key part of negotiations for Washington and Beijing,” George Chen, a partner at The Asia Group, said in an emailed comment. "Both sides want more stability but there will be still a lot of noises before the two leaders, President Trump and Xi, can make a final deal next year when they meet. Those noises are all negotiation tactics.”

In April, Chinese authorities imposed export curbs on seven rare earth elements shortly after Trump unveiled his steep tariffs on many trading partners including China.

While supplies remain uncertain, China approved some permits for rare earth exports in June and said it was speeding up its approval processes.