Export Control Announcement Released! Will Rare Earth Product Exports Be Affected? [SMM Analysis]

SMM, February 5: On February 4, the Ministry of Commerce and the General Administration of Customs jointly issued an announcement stating that, to safeguard national security and interests and fulfill international obligations such as non-proliferation, the State Council has approved the decision to impose export controls on items related to tungsten, tellurium, bismuth, molybdenum, and indium.

According to the announcement, exporters of the mentioned items must apply for export licenses from the competent commerce department of the State Council in accordance with the relevant provisions of the "Export Control Law of the People's Republic of China" and the "Regulations on the Administration of Export Control of Dual-Use Items of the People's Republic of China." This announcement takes effect from the date of its release, and the "List of Dual-Use Items Subject to Export Control of the People's Republic of China" will be updated accordingly.

Previously, in November 2024, China released the latest "List of Dual-Use Items Subject to Export Control of the People's Republic of China," covering multiple fields such as rare earth materials. The list includes rare earth optical materials, rare earth magnetostrictive materials, rare earth metals and alloy materials, rare earth aerospace materials, rare earth permanent magnet materials, rare earth superconducting materials, germanium, gallium, rhenium, antimony, graphite, indium, tellurium, and other important advanced rare military materials. In addition to raw materials, related technologies and equipment are also prohibited.

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Rare earth metals are core resources for high-tech industries and are widely used in electronics, petrochemicals, metallurgy, aerospace, and NEVs, among many other fields. Almost all high-tech weapons rely on rare earth materials, which are often located in critical parts of the weapons. For example, the US "Patriot" missile uses samarium-cobalt magnets and NdFeB magnets in its guidance system. These materials are used for electron beam focusing, ensuring precise interception of incoming missiles.

According to the latest SMM survey data, the export of rare earth products has not been significantly restricted. Industry feedback indicates that approximately 14% of China's current rare earth product exports are destined for the US, while over half of the US's rare earth imports depend on China. China's rare earth reserves account for 40% of the global total, and 90% of the world's rare earth permanent magnet products are manufactured in China, giving China an extremely important position in the rare earth industry.