China Imposes Export Ban on Rare-Earth Technology

Following the reinforcement of rare earth exports, China has raised the level of ‘weaponizing strategic resources’ by prohibiting the export of rare earth processing technology.

According to Nihon Keizai Shimbun (Nikkei) on the 22nd, the Ministry of Commerce and the Ministry of Science and Technology in China announced the revised version of the ‘China Export Prohibition/Restriction List’ the day before. While the total number of items was reduced from the previous 164 to 134 in the 2020 updated list, control over the high-tech sector, where the US-China confrontation is intensifying, especially the rare earth-related sector that China strictly manages, has been strengthened.

The revised version includes the addition of rare earth refining (process to increase purity by removing impurities, etc.) and processing technology, as well as the manufacturing technology of high-performance magnets using rare earths. China had already banned the export of extraction, separation, and alloy material production technologies for rare earths.

Nikkei analyzed this measure as a check against the ‘decoupling from China’ movement spreading mainly in the US and Japan. As China recently raised the level of ‘resource weaponization’ by controlling rare earths, major countries around the world are moving to reduce their dependence on China, along with discussions on building separate supply chains and cooperation. However, due to the significant environmental burden from extracting, refining, and processing rare earths, related industries have not developed in many countries outside of China, and in the meantime, China has accumulated facilities and technology, establishing a unique position. Even in the US, the proportion of Chinese rare earths has been reduced from 90% ten years ago to 70% last year through the development of rare earth mines, but most of the domestic rare earths are sent to China for refining and then re-imported for use. As of 2022, the US was the largest trading partner for China’s rare earth exports and imports. Given this situation, it is interpreted that China has thrown a curveball of ‘technology export restrictions’ against the movement to build a supply chain excluding China. Especially, the high-performance magnets using rare earths included in the list this time are mainly produced by Japan, and the US also produces many advanced electronic products equipped with these magnets.

Meanwhile, China has restricted graphite exports, a key material for battery anodes, from this month, following gallium and germanium used in semiconductors in August. In addition, by adopting a revision of the ‘Mineral Resources Law’, it blatantly shows its stance to use strategic materials as diplomatic means and weaponization.

By. Ju Hee Song