by Muhammad Asif NOOR
In October 2025, China’s Ministry of Commerce announced new export controls on rare earths under Decrees No. 61 and 62. The measures expand licensing beyond raw ores to include refined metals, magnets, and extraction technologies. Even products with more than 50 per cent Chinese content made abroad now fall under review. Yet Beijing has been careful to stress that these are not bans. Civilian exports will continue under license, and a “green channel” mechanism is being developed to expedite legitimate trade. Officials argue that the move is aimed at preventing military misuse of sensitive materials while ensuring supply stability.
The announcement came just a day after Washington imposed 100 percent tariffs on certain Chinese goods and renewed software export restrictions. For China, the controls were a message of self-protection rather than confrontation, an attempt to defend its technological and industrial interests after months of mounting U.S. pressure. In its October 16 briefing, Beijing accused Washington of “talking dialogue while threatening new curbs,” and called for mutual respect in managing critical industries.
Rare earths occupy a central place in this contest because they represent both economic value and strategic leverage. China currently processes nearly 87 per cent of the world’s rare earths, while the United States controls about 12 per cent of mining but remains the largest consumer, particularly in its defence and tech sectors. According to the International Energy Agency (IEA), global demand for these minerals could increase by up to seven times by 2040, driven by the green energy transition. This imbalance of production and consumption has made the sector vulnerable to political friction.
Still, the global reaction to China’s latest move has been more measured than in the past. Prices of rare earths spiked briefly before stabilising once MOFCOM reaffirmed its commitment to continued civilian trade. European firms welcomed the “green channel” proposal, describing it as evidence of moderation rather than escalation. Analysts point out that the new measures target dual-use technologies, not general manufacturing, suggesting that Beijing is exercising regulatory precision, not economic coercion.
Yet the dispute also reflects how both major powers have come to treat trade as an extension of national security. The United States, long a proponent of open markets, now routinely employs tariffs and export bans to curb China’s technological rise. China, in turn, has begun to integrate its economic strategy with its security policy , using controls not to isolate but to safeguard. What emerges is not a decoupling but a restructuring of global interdependence under new terms of caution.
China’s efforts to refine its licensing system and the U.S. push for diversified sourcing can complement each other if integrated under international oversight. Multilateral institutions like the World Trade Organization (WTO) or the International Energy Agency could help design a neutral mechanism for monitoring supply stability and sustainability.
What often goes unnoticed in this debate is that rare earths are not just about technology; they are about power — who controls innovation, who defines sustainability, and who sets the rules of the global digital order. But the age of one country dominating the supply chain is fading. The next phase will require a web of interdependence where trust, regulation, and shared governance replace the illusion of unilateral control.
In this sense, China’s rare earth policy is a reminder of the need for restraint and reform. The United States, too, must recognise that lasting stability lies not in coercion but in cooperation. Both countries have the capacity — and the responsibility — to make this system equitable.
