China has significantly tightened its export regulations for crucial rare earth elements and associated processing technologies, citing national security concerns. These new rules formalize existing restrictions and are expected to impact foreign arms manufacturers and certain semiconductor firms, amidst ongoing trade negotiations between Beijing and Washington.

• China holds a near monopoly, accounting for approximately 61% of global rare earth production and 92% of their processing, according to the International Energy Agency (IEA).
• The regulations prohibit Chinese firms from collaborating with foreign companies on rare earths without government permission and restrict the export of technologies related to mining, smelting, and magnet manufacturing.
• This move is seen as a strategic response, mirroring US rules that block the sale of chip-making equipment to China, and could severely impact the US, which has significant rare earth mining but lacks processing facilities.