Beijing\u2019s export curbs tighten global supply chains, raising concerns among tech and defence industries
\n Beijing
\nChina tightened its rare earth export controls on Thursday, saying it planned to limit exports to overseas defence firms and semiconductor users and adding five rare earth elements to its list.
\nThe world\u2019s largest rare earth producer also added dozens of pieces of refining technology to its control list and announced rules that will require compliance from foreign rare earth producers who use Chinese materials.
\nThe Ministry of Commerce\u2019s announcements follow US lawmakers\u2019 call on Tuesday for broader bans on the export of chipmaking equipment to China.
\nThey expand controls Beijing announced in April that caused shortages around the world, before a series of deals with Europe and the US eased the supply crunch.
\nThe new curbs come weeks ahead of a scheduled face-to-face meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea.
\n\u201cThis helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in (South) Korea later this month,\u201d said Tim Zhang, founder of Singapore-based Edge Research.
\nChina produces over 90% of the world\u2019s processed rare earths and rare earth magnets. The 17 rare earth elements are vital materials in products ranging from electric vehicles to aircraft engines and military radars.
\nExports of 12 of them are now restricted after the Ministry of Commerce added five\u2014 holmium, erbium, thulium, europium and ytterbium\u2014 along with related materials.
\nForeign companies producing some of the rare earths and related magnets on the list will now also need a Chinese export license if the final product contains or is made with Chinese equipment or material. This applies even if the transaction includes no Chinese companies.
\nThe regulations mimic rules the United States has implemented to restrict other countries\u2019 exports of semiconductor-related products to China.
\nThe ministry also added dozens of pieces of mining and refining equipment and materials to its control list.
\nChina\u2019s latest restrictions on the five additional elements and processing equipment will take effect on November 8, just before a 90-day trade truce with Washington expires.
\nThe rules on foreign companies that make products using Chinese rare earths equipment or material are to take effect on December 1. Shares in China Northern Rare Earth Group, China Rare Earth Resources and Technology and Shenghe Resources surged by 10%, 9.97% and 9.4%, respectively, on Thursday.
\nChips and defence
\nThe ministry also said overseas defence users will not be granted licenses, while applications related to advanced semiconductors will be approved on a case-by-case basis.
\nThe new rules apply to 14-nanometer chips or more advanced chips, memory chips with 256 layers or more, and equipment used in production of such chips, as well as to related research and development. These advanced chips are used in products from smartphones to AI chipsets that require powerful computing performance.
\nThe rules will also apply to research and development of artificial intelligence with potential military applications.
\nSouth Korea, home to major memory chipmakers Samsung Electronics and SK Hynix, is assessing the details of the new restrictions and will continue discussions with China to minimise their impact, its industry ministry said in a statement to Reuters.
\nSamsung declined to comment. SK Hynix and Taiwan\u2019s TSMC did not immediately respond to questions.
\nShares in TSMC rose 1.8% on Thursday, as the company reported forecast-beating third-quarter revenue. South Korea\u2019s financial markets were closed on Thursday for a public holiday.
\nChinese rare earth shipments have been growing steadily over the past few months as Beijing grants more export licenses, although some users still complain they are struggling to obtain them.
\nIn a nod to concerns about access, the ministry said the scope of items in its latest restrictions was limited and \u201ca variety of licensing facilitation measures will be adopted\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"
Beijing\u2019s export curbs tighten global supply chains, raising concerns among tech and defence industries Beijing China tightened its rare earth export controls on Thursday, saying it planned to limit exports to overseas defence firms and semiconductor users and adding five rare earth elements to its list. The world\u2019s largest rare earth producer also added dozens […]<\/p>\n","protected":false},"author":2,"featured_media":507751,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-507733","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n