Chinese authorities have announced a new phase of export restrictions on rare earth elements — strategically important resources essential for producing electronics, batteries, semiconductors, and military equipment. According to customs data, in September 2025, China’s rare earth metal exports fell by nearly one-third compared to the previous month. The move has caused concern among major global manufacturers, as China still supplies more than 90% of all processed rare earth materials worldwide.

What’s under restriction

The new rules include not only quotas on the export of the elements themselves but also limits on the export of processing technologies. Companies operating in sensitive industries — defense, electronics, and semiconductors — must now obtain special licenses reviewed on a case-by-case basis. Moreover, Chinese firms are required to coordinate even joint international projects with the government if they involve strategic raw materials.

For many foreign corporations, these changes came as a shock: export license applications now undergo lengthy reviews, and deliveries are delayed for weeks. Chinese authorities justify the new policy as a matter of «national security protection», yet experts believe that export control is also becoming a tool of geopolitical leverage — especially in light of the upcoming trade talks between China and the United States.

Global market reaction

The effects of these restrictions are being felt across multiple industries — from automobile manufacturing to electronics. Spot prices for rare earth metals have climbed, while shares of non-Chinese companies engaged in rare earth mining and processing have risen sharply. Analysts, however, caution that these firms cannot yet fully replace China’s production capacity, and the price surge could trigger another wave of inflation.

Manufacturers of electronics and batteries are already reconsidering logistics chains and seeking new suppliers. Some companies have started building material reserves to weather the uncertainty. Investors, meanwhile, see not only risks but also opportunities: the sector could attract new funding, particularly for recycling and the development of cleaner extraction technologies.

How countries are responding

To reduce dependence on China, governments and corporations are taking active measures. New projects are emerging in the United States, Australia, India, and Canada, where governments are offering tax incentives and subsidies to build alternative facilities. Growing attention is also being paid to recycling used components — such as old batteries and electronics — from which rare earth elements can be recovered. The most common strategies include:

• creating strategic stockpiles of rare earth metals;
• developing domestic processing and refining capacities;
• forming international agreements among «friendly» countries;
• developing substitution technologies for rare elements using more accessible materials;
• encouraging recycling programs and investment in «green» mining.

Experts note, however, that implementing such projects will take years, not months. During that time, China may consolidate its position as both a technological and resource powerhouse, making it harder for competitors to reclaim market share.

Possible consequences

The tightening of export controls reflects a new global reality: raw materials have become a political instrument. Since China dominates most of the world’s rare earth market, any of its policy changes immediately ripple through global supply chains. Manufacturers dependent on these resources are now forced to revise their strategies, diversify procurement, and factor additional risks into budgets.

Market volatility is also increasing — sudden price surges and supply uncertainty are creating instability. Yet for those ready to adapt, new opportunities are emerging: investors can benefit from rising demand for alternative suppliers, and nations can accelerate the development of their own technologies. In the coming years, flexibility and the ability to adjust quickly will become the key advantages for players in the commodity market.

Experts largely agree that China’s export restrictions are not a short-term measure but a signal of a new era of resource protectionism. The global economy is entering a stage where raw materials are part of strategic policy rather than just trade goods. This shift brings risks — but it also opens the door to innovation, investment, and new forms of cooperation.