What’s new: China has rolled out new rules that tighten its control on its rare earth supply chain, as the country seeks to ensure the security of its natural resources while boosting the industry crucial to the green transition.
No organization or individual may “encroach upon or destroy” rare earth resources that belong to the state, according to the regulation released by the State Council, China’s cabinet, on Saturday.
The regulation, which takes effect Oct. 1, stipulates that government departments under the State Council will establish a system for tracing rare earth products. Meanwhile, companies engaged in rare earth mining, smelting and separation, and export of rare earth products, are among those required to establish a separate system to record the whereabouts of rare earth products. They must also “truthfully” enter the details into the government’s system.
Violations could result in fines, revocation of business licenses and criminal penalties, the State Council said.
The background: The regulations come amid escalating trade tensions as the West tries to reduce its reliance on green imports from China and protect local industries from cheaper competition.
In May, Washington announced tariff hikes on $18 billion worth of Chinese imports. Among them, a new 25% tariff on permanent magnets, including rare earth magnets, has been proposed to take effect in January 2026.
Rare earths are non-renewable and important strategic resources, and processed rare earths are widely used in new-energy fields such as new-energy vehicles and wind turbines.
China is the world’s largest producer of rare earth permanent magnets. The country produced 240,000 tons of rare earth products last year, accounting for 68% of the global total, data from the U.S. Geological Survey showed.
Last year, China banned the export of a range of rare-earth technologies, including those for separating the materials and producing metals and magnets.
Contact reporter Wang Xintong (xintongwang@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
