China Tightens Grip on Rare Earths: New Rules Target Imports and Supply Chains

China has introduced stricter regulations on its rare earth industry, extending controls to imported materials and requiring companies to report monthly data. The rules aim to enhance traceability and expand China’s dominance over the global rare earth supply chain, which is vital for advanced technologies like EVs and smartphones. By regulating imports and refining, China strengthens its geopolitical leverage amid U.S. trade tensions. Despite declining imports, China continues to export high-value products, underscoring its strategic dominance in this critical sector.

China has unveiled stringent regulations to tighten its control over the rare earth industry, expanding its oversight beyond domestic production to include imported materials. The newly announced rules, released as part of the implementation of the Rare Earth Management Regulations, require enterprises to report detailed monthly data on the flow of these strategic resources. This significant regulatory shift is expected to have far-reaching implications for the global rare earth supply chain.

The updated guidelines, published by three government entities led by the Ministry of Industry and Information Technology (MIIT), emphasize the importance of traceability within the rare earth sector. Effective immediately, the rules mandate that companies involved in rare earth production submit their data by the 10th of each month to a centralized information system. This marks a notable departure from previous practices, as the quota system now applies not only to domestically sourced materials but also to those imported for refining in China.

Strategic Control Over Critical Resources

China, the world’s leading producer and refiner of rare earth elements, has long recognized the strategic value of these materials, which are crucial components in advanced technologies like smartphones, electric vehicles, and robotics. The MIIT highlighted the need for updated measures, stating that the evolving rare earth industry has rendered older regulations inadequate.

Beijing’s enhanced oversight aligns with its broader strategy to maintain a dominant position in the global rare earth market. The country’s rare earth production accounted for over 60% of the world’s total in 2023, according to the International Energy Agency. Over the years, China has developed advanced technologies and expanded its capacity to process raw materials into high-value products, reinforcing its control over the supply chain.

Trade Implications and Global Impact

The timing of these new regulations coincides with ongoing trade tensions between China and the United States. Rare earth elements have emerged as a critical bargaining tool in Beijing’s negotiations with Washington, given their importance in the production of high-tech goods. Analysts view the move to regulate imported materials as a calculated effort to further consolidate China’s grip on the global rare earth supply chain.

Li Chao, chief analyst at Guojin Securities, noted in a research report that the updated measures enhance China’s control by explicitly including imported materials under the quota system. This expanded regulatory framework is seen as a strategic response to rising global demand and geopolitical uncertainties.

Shifts in Trade Data

Recent trade statistics offer insight into the evolving dynamics of China’s rare earth industry. In the first half of 2025, the country imported 38,600 tonnes of rare earth smelting and separation products, a decline of over 12% compared to the previous year, according to Chinese customs data. Meanwhile, imports of rare earth permanent magnets—key components in mobile phones and robotics—rose by 11% to 1,056 tonnes during the same period.

On the export front, China shipped 32,000 tonnes of rare earth smelting and separation products from January to June, reflecting an 11.3% year-on-year increase. However, exports of rare earth permanent magnet materials fell by 19% to 22,000 tonnes. These contrasting trends underscore China's dual strategy of importing raw materials for refinement while maintaining a competitive edge in exporting high-value products.

A Calculated Move

China’s decision not to disclose specific details about this year’s quota allocations has drawn attention from industry observers. Mainland media reports suggest this lack of transparency may be a deliberate tactic in the context of the ongoing trade war, aimed at maintaining flexibility in negotiations while signaling its dominance in the rare earth market.

By expanding its regulatory scope to include imported materials and enforcing stricter reporting requirements, China has reinforced its position as the global leader in rare earth production and processing. These measures not only ensure greater oversight of the domestic industry but also strengthen Beijing’s leverage in shaping the future of the global rare earth supply chain.

As nations around the world seek to diversify their sources of rare earths, China’s latest move serves as a reminder of its unparalleled influence in this critical sector.