Beijing’s new restrictions on rare earth exports heighten geopolitical tension and threaten to disrupt global technology supply chains.
China has introduced a fresh wave of export controls on rare earth materials, tightening its grip on a sector critical to global manufacturing and advanced technology. The move, announced Thursday by the Ministry of Commerce, is expected to ripple across supply chains tied to semiconductors, artificial intelligence, and defense industries.
“China just weaponized rare earths again — but this time globally,” said Velina Tchakarova, a geopolitical strategist. “The new rules effectively give Beijing a veto over parts of the global chip, EV, and defense supply chains, even beyond its borders.”
Under the new regulations, set to take effect December 1, foreign firms that export products containing Chinese-origin rare earths or related technologies — even if they operate outside China — must obtain a special dual-use license from Beijing.
Analysts say this represents a major escalation in China’s long-running strategy to protect its dominance in the rare earth market. The country controls more than 70% of global production, giving it significant leverage over industries from electric vehicles to aerospace.
According to Tchakarova, licenses will likely be denied for military or AI-related uses, including technologies involving 14nm semiconductors, advanced memory systems, and military-grade AI components. She warned that the move could lead to price spikes and supply disruptions across multiple sectors, particularly EV batteries and renewable energy infrastructure.
The timing of the announcement adds a geopolitical layer: it comes just weeks before a planned meeting between Chinese President Xi Jinping and former U.S. President Donald Trump at the APEC Summit in South Korea.
“This is a calculated move by Beijing,” said a senior analyst at Global Strategy Partners. “By tightening control over rare earth exports, China is strengthening its negotiating position ahead of critical trade discussions.”
The decision could also weigh on investor sentiment, with potential spillover effects into both traditional and crypto markets as investors hedge against increased geopolitical risk.
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