China has announced a significant expansion of export controls over 12 rare-earth materials after adding five more materials: holmium, erbium, thulium, europium, and ytterbium to the existing list of restricted ones and related technologies targeting foreign defense, military, and semiconductor users. These measures, which build on stricter rules introduced in April, have already disrupted global supply chains. The law was adopted on October 9, 2025.
The new rules include outright license denials for overseas defense users. Exports of recycling equipment and magnet production technologies will require official licenses.
Rare-earth elements are used not only in everyday electronics but also in military equipment, from smartphones to fighter jets. They are also critical for semiconductor manufacturing. The law for advanced semiconductor applications requires review on a case-by-case basis. New restrictions prohibit locally based firms from collaborating abroad on rare earth-related processes without official approval. Some of the new rules are already in effect, while others are scheduled to begin on December 1.
China dominates the processing stage of the rare-earth, controlling 90% of global rare-earth output and magnet production. Rare-earth is critical to many high-tech and defense agencies. These restrictions give China significant leverage in global trade, especially in its negotiations with the U.S. This move is more alarming given the fact that it was adopted before the U.S.-China leaders’ meeting at the Asia-Pacific Economic Cooperation summit in South Korea, which should be held in a few months. The commerce ministry stated that the restrictions aim to “safeguard national security and interests” by preventing materials from “being used, directly or indirectly, in military and other sensitive fields.”
