China Restricts Rare Earths Exports - MassPoint Legal and Strategy Advisory PLLC

December 21, 2023
Critical Minerals, Critical Resources, Emerging Technologies Regulation, International Trade, Tech War, United States China Law and Policy

China Restricts Exports of Rare Earths Processing Tech

Once again, China appears to take a page from the U.S. export controls playbook amidst the ongoing U.S.-China tech race, formalizes rare earths export controls.

China has restricted exports of technology to extract and separate rare earth elements, according to reports (see here and here). The move comes some four years after China signaled its intention to potentially deploy U.S.-style, national security-based export controls, and months after China imposed controls on exports of germanium and gallium, and followed with curbs on graphite exports.

Rare earths are essential to emerging and clean energy technologies and manufacturing, including electric vehicles, electronics, solar panels. They are designated critical minerals on the U.S. Critical Minerals List, first published in final form in May 2018, pursuant to Executive Order 13817, on A Federal Strategy To Ensure Secure and Reliable Supplies of Critical Minerals. As the Order’s name indicates, its intent is to “reduce the United States’ reliance on foreign (and unstable) sources critical nonfuel
minerals,” including those critical resources needed to produce emerging and critical technologies and maintain U.S. technological leadership.

China’s formal restriction on exports of rare earths processing technology is the latest move in the ongoing U.S.-China technology war, and is the latest move that appears to be modeled on the U.S. export controls blueprint. Indeed, the restriction of rare earths processing technology resembles the United States’ controls on exports of semiconductor manufacturing equipment to China, instituted last October and amended a year later. Those semiconductor manufacturing equipment (SME) controls leverage the United States’ qualitative SME advantage to cut off certain Chinese end users and end uses from the SME needed to produce advanced semiconductors. China’s rare earths processing technology controls appear to leverage China’s strength in the rare earths sphere.