China tightens export controls on rare-earth and battery technologies

The Ministry of Commerce of the People’s Republic of China announced codified and tightened export restrictions on rare-earth-related technologies and other items in early October.

• Main action: The new MOFCOM rules require export licenses on national security grounds for Chinese technologies used in mining, processing, refining and recycling rare earths, and for core battery-supply-chain technologies (cathode/anode materials and industrial machines that produce EV batteries); the rules state “nothing leaves China without official approval” and warn that military-linked end-uses will likely lead to license denials. The rules apply to every exporter and intermediary in China (including banks, freight companies and e-commerce platforms) and include Announcement 61, which permits China to apply legal provisions beyond its borders.

• Background and details: By early September Beijing had approved under 15% of rare-earth licence requests from European companies and the ECB reports over 80% of main European firms are “no more than three” intermediaries away from Chinese rare-earth producers; affected sectors named include semiconductors, defence equipment, ammunition and clean-technology supply chains. The piece recommends collective EU measures using the 2023 Anti-Coercion Instrument (ACI) (triggered by a qualified majority in the Council) and lists possible responses such as import tariffs, services restrictions, export controls, suspension of IP rights, and curbs on access to finance and public procurement.