China tightens control of global rare-earth supply chain ahead of Trump talks

China has toughened its rules on the export of rare earths, crucial materials for many modern technologies from smartphones to fighter jets.

The move strengthens Beijing's hand ahead of talks expected later this month between China's President Xi Jinping and his US counterpart Donald Trump. China's Ministry of Commerce on Thursday announced tighter restrictions on exports of processing technology and hinted at limits on exports to foreign arms manufacturers and some semiconductor firms.

It follows calls in the US for stricter bans on exports of chip-making equipment to China, and mimics a measure Washington has used to restrict exports of semiconductor-related products to China. "From a geostrategic perspective, this helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in (South) Korea later this month," said Tim Zhang, founder of Singapore-based Edge Research.

The rules give China more control over the global rare-earth supply chain - a major sticking point in recent lengthy trade negotiations with Washington. China's rare earth dominance China accounts for nearly 70% of the world's rare earths mining and controls roughly 90% of global rare earths processing.

The 17 rare earth elements are used in products across society, including electric vehicles and military radars. China's dominance has given it a cutting edge over the clean technologies of the future, including electric vehicles and wind turbines.

In April, it announced sweeping controls in retaliation for tariffs imposed by the Trump administration, which caused worldwide shortages until a series of deals with Europe and the US somewhat eased the crunch. Under the new rules coming into effect in December, foreign companies will have to get special approval to export items that contain even small traces of rare earths elements sourced from China.

Permits will also be required for exports of any technology related to rare earth mining, smelting, recycling and magnet-making - though it's not yet clear how China would enforce these policies overseas. The new restrictions are to "better safeguard national security" and to stop uses in "sensitive fields such as the military.