(JW Insights) Nov 9 -- China will tighten export controls on rare earths, requiring exporters to report rare-earth types and their export destinations, reported Nikkei Asia on China’s announcement on November 7.

The new restrictions are set to run through the end of October 2025. Observers say China's move to tighten its grip over the strategic materials may be a negotiating tactic ahead of a planned November summit between Chinese President Xi Jinping and his US counterpart, Joe Biden.

China's Ministry of Commerce (MOC) announced on November 7 that it had added rare earths, including compounds and alloys, to its list of mineral resources and other items requiring disclosure of information such as material type and export destinations.

China accounts for 70% of the world's output of rare earths, which are essential for the manufacture of electric vehicles and some weapons, including missiles. The US, which has developed its mines for some critical minerals, has become the world's second-largest producer. However, it lacks sufficient smelting capacity, forcing it to export raw materials to China for processing before re-importing them.

China slashed rare earth exports to Japan in 2010. Japan, the US, and the European Union filed a complaint over the restrictions with the World Trade Organization (WTO) in 2012. Two years later, it was found in violation of WTO rules, and China eliminated export quotas and other measures, reported Nikkei Asia.

In recent years, the US has sought to work with allies to tighten exports of top-end semiconductors and chipmaking equipment to China. China began considering banning exports of manufacturing technology for high-performance magnets and other products that use rare earths at the end of last year. Given the increasing U.S.-China friction, the Chinese government began restricting exports of gallium, a semiconductor material, in August.

The US and China have agreed in principle to a face-to-face meeting between Biden and Xi in mid-November, and the leaders may discuss the export restrictions and how to manage the two countries' rivalry at the summit, according to the Nikkei Asia report.

(Li PP)