China expands rare earth export restrictions ahead of possible Trump-Xi meeting

China has tightened export controls connected uncommon earths and related technologies portion barring its citizens from participating successful unauthorized mining overseas, adding caller strains to a assemblage cardinal to its geopolitical leverage.

Foreign entities indispensable present get a licence from Beijing to export immoderate products containing implicit 0.1% of domestically-sourced uncommon earths, oregon manufactured utilizing China's extraction, refining, magnet-making oregon recycling technology, the Ministry of Commerce said Thursday.

To forestall the "misuse" of rare-earth minerals successful the subject and different delicate sectors, companies tied to overseas militaries oregon placed connected export-control oregon ticker lists volition beryllium denied permits, the commerce ministry said. Applications for items that could beryllium utilized successful weaponry, coercion oregon different subject purposes volition besides beryllium rejected.

The latest determination marks a "major upgrade for uncommon world export control," expanding restrictions from lone earthy materials to intelligence spot and technologies, said Dan Wang, China manager astatine Eurasia Group. China added respective uncommon earths and related materials to its export power database successful April.

These restrictions could further deepen different countries' dependence connected Chinese know-how portion supporting Beijing's efforts to determination its ain industries up the worth chain, Wang added.

Chinese citizens are besides prohibited from supporting overseas activities related to uncommon world extraction and magnet manufacturing without support from Beijing.

The caller rules connected the export of uncommon world materials volition instrumentality effect connected December 1, portion those connected technologies and labour took effect immediately, according to official statements.

Applications for uncommon world exports utilized successful producing sub-14 nanometer semiconductors, precocious representation chips, semiconductor manufacturing oregon investigating equipment, oregon artificial quality with imaginable subject applications volition beryllium reviewed connected a case-by-case basis, the ministry said.

The measures chiefly people the defence sector, said George Chen, spouse astatine The Asia Group, arsenic portion of Beijing's efforts to dwarf the U.S. defence capabilities.

Rare earths are captious to high-tech industries, including automobiles, defence and semiconductors. Tightened entree to uncommon earths has disrupted planetary proviso chains caught successful the U.S.-China crossfire this year.

"Beijing has realized that it has leverage successful this assemblage and is intelligibly not shy astir utilizing it," said Wendy Cutler, a elder vice president astatine the Asia Society Policy Institute and erstwhile U.S. commercialized negotiator. The determination could unit Washington to marque further concessions successful ongoing talks, specified arsenic tariff reductions oregon relaxed U.S. export controls.

China accounts for astir 70% of the planetary supply and has repeatedly utilized the critically needed minerals arsenic a bargaining spot successful commercialized discussions.

The latest restrictions came conscionable weeks earlier a imaginable gathering betwixt U.S. President Donald Trump and his Chinese counterpart Xi Jinping. The 2 leaders are expected to conscionable successful idiosyncratic connected the sidelines of the Asia-Pacific Economic Cooperation forum during the past week of October successful Gyeongju, South Korea.

While China has been soundless connected aboriginal meetings, Trump had besides said helium would sojourn China aboriginal adjacent twelvemonth and that Xi would travel to the U.S. astatine a aboriginal date.

The caller announcement tin beryllium viewed arsenic "a bid of bargains" that Beijing wants to spot adjacent earlier the adjacent circular of large commercialized talks, The Asia Group's Chen said.

"The Chinese broadside is getting much and much experienced successful dealing with their counterparts and they cognize what their American friends want," Chen added.

Since precocious past year, China has tightened restrictions connected uncommon world exports, including demanding impervious that they volition not beryllium utilized for subject purposes. Beijing started issuing single-use export licenses pursuing a commercialized truce with Washington successful May.

While China's authoritative information showed that exports of uncommon world magnets person recovered successful caller months, advancement appeared uneven. The European Chamber of Commerce said successful a survey released past period that Beijing's choky grip had outgo astatine slightest 1 subordinate "millions of euros" portion different members cited inconsistent procedures for obtaining export approvals.

A Chinese ministry spokesperson connected Thursday said that determination would beryllium definite exemptions nether the caller rules, including exports for exigency aesculapian situations oregon catastrophe relief. A "transition period" volition besides let businesses to fulfill existing contracts and conscionable compliance requirements.

The modulation model is apt to cushion immoderate near-term impacts for companies, Eurasia's Wang said, noting that "similar to however the U.S. tech export prohibition to China near country for American tech companies to lobby and use for support — astir of them did get approvals."

"It volition springiness China much powerfulness than conscionable a blunt ban," Wang said.

— CNBC's Evelyn Cheng contributed to this story.