BEIJING — China has introduced a new digital tracking system for its exports of rare earths and other critical minerals, tightening its control over key raw materials as trade tensions with the United States continue to escalate.
The system, which came into effect last week, mandates Chinese producers and exporters to submit detailed online reports for each transaction, including trading volumes and the identities of international buyers, according to industry sources. The move is part of a broader strategy by Beijing to assert greater oversight of its strategic resources.
Export Restrictions Disrupt Global Supply Chains
This new measure accompanies export restrictions imposed in April on several medium-to-heavy rare earth elements and related magnets—materials essential to industries such as automotive manufacturing and semiconductors. Companies seeking to export these materials must now obtain specific licenses, a process that has introduced significant delays and bottlenecks across global supply chains.
Manufacturers in Europe, North America, and East Asia have reported growing challenges in securing critical inputs, with some automakers forced to pause production as existing inventories dwindle.
Limited Relief and Uncertain Outlook
While Chinese state media have hinted at a possible easing of restrictions for select Chinese and European semiconductor firms, no substantive change has yet materialized. The discussions follow recent meetings between industry leaders and China’s Ministry of Commerce, during which the impact of export curbs on manufacturing output was a central topic.
VDA President Hildegard Müller confirmed to Reuters that China had granted rare earth export permits to a few producers, including for shipments to Volkswagen. However, she warned that these approvals fall short of ensuring stable supply.
“If the situation is not changed quickly, production delays and even production outages can no longer be ruled out,” Müller said.
Political Implications
The issue is expected to be a key agenda item in upcoming talks between U.S. President Donald Trump and Chinese President Xi Jinping. White House spokesperson Karoline Leavitt confirmed the planned discussion, noting that President Trump views China’s slow relaxation of critical mineral controls as a potential breach of recent bilateral agreements.
China remains the dominant global supplier of rare earths, producing over 70% of the world’s supply. As strategic competition intensifies, control over these minerals has become a powerful geopolitical tool, with ripple effects across industries reliant on advanced technologies.
