China’s New Export Controls: A Strategic Shift in the Global Rare Earth Market

Recently, China’s Ministry of Commerce, under President Xi Jinping’s new policy direction, has implemented a fresh regulatory framework governing the export of rare earth elements and related technologies. Under this directive, China has imposed significant restrictions on the export of its domestically sourced rare earth materials to international markets.

This move is widely seen as part of Beijing’s strategy to counter ongoing trade and tariff tensions with the United States and to consolidate China’s dominance in the global technology and materials market. Under the new rules, the extraction, refining, separation, smelting, magnetic material production, and recycling of rare earth elements from secondary sources can no longer be exported or transferred to foreign entities without prior government approval.

Additionally, any technology required for assembly lines, maintenance, repair, and modernization in rare earth production must also receive authorization before export. The Chinese government has further mandated export licenses for all foreign entities or individuals involved in the export of “dual-use items” — goods that can serve both civilian and military purposes.

According to Chinese policymakers, this initiative will enhance national security regarding rare earth resources while also reshaping the global balance of the technology and trade sectors. However, analysts warn that China’s tightening control over rare earth exports may create significant volatility in the international technology market.

As of 2024–2025, global reserves of rare earth metals are estimated at around 110 million tons, of which 44 million tons are located in China. Other major holders include Vietnam (22 million tons), Brazil (21 million tons), Russia (10 million tons), and India (about 7 million tons) — with Andhra Pradesh recently discovering approximately 723,000 tons of rare earth deposits.

Among other countries, Australia possesses roughly 4.2 million tons, and the United States about 2.3 million tons. More recently, Turkey has claimed to have discovered an enormous rare earth deposit in the Beylikova region, estimated at an astonishing 694 million metric tons. However, experts suggest that the rare earth oxide content in this deposit might only be 1–2%, and the claim has yet to be fully verified internationally. Even so, the find could potentially provide Turkey with significant geopolitical and strategic leverage in the future.

China currently controls around 60–70% of global rare earth production and 85–90% of the processing, effectively dominating nearly 80% of the global supply chain. In 2024, the international market for rare earth metals was valued at approximately USD 8.42 billion, with projections indicating growth to USD 19.62 billion by 2032.

The United States and other technologically advanced Western nations remain heavily dependent on Chinese supply chains for these critical materials — essential for 

products such as smartphones, batteries, electric vehicles, aircraft, and defense systems. Analysts believe this dependence constitutes a strategic vulnerability for the West.

In conclusion, China’s new export control policy marks the beginning of a new era in the global rare earth market — one that is not merely an economic decision but a calculated geopolitical strategy. As a result, Western nations, led by the United States, are likely to accelerate investments in alternative sources of rare earth elements to secure their supply chains. Meanwhile, emerging players like Turkey could reshape the competitive landscape of this vital global industry.##