China extends export controls on rare earths beyond its borders

Move appears to be a gambit to strengthen its position for trade talks with US: Observers

- Lim Min Zhang China Correspondent

A truck being loaded with rare earths at the Port of Lianyungang in Jiangsu province in 2013. From Dec 1, overseas entities will need Beijing's approval to export products made abroad that contain Chinese-origin controlled materials of at least 0.1 per cent in value. The step plugs the gaps in rare earth export curbs introduced in April. PHOTO: REUTERS

(PHOTO: REUTERS)

China has tightened its grip on rare earths, extending export controls beyond its borders for the first time to cover foreign transfers of products made with Chinese rare earth materials or technology.

Observers say the move appears to be a gambit in China's trade talks with the US, as Beijing uses its leverage ahead of a possible summit between the countries' two leaders in South Korea later in October.

On Oct 9, China's Ministry of Commerce said that, from Dec 1, overseas entities will need Beijing's approval to export products made abroad that contain Chinese-origin controlled materials of at least 0.1 per cent in value.

The step plugs the gaps in rare earth export curbs introduced in April, following US President Donald Trump's Liberation Day tariffs, on materials Beijing says could be used for military purposes.

"For some time, certain foreign organisations and individuals have transferred Chinese-origin rare earth materials, directly or after processing, to military and other sensitive users, threatening China's security, undermining global peace and stability, and harming nonproliferation," a Commerce Ministry spokesperson said on Oct 9.

Licences must also be obtained for products made overseas using Chinese technology related to rare earth mining and processing, the ministry added. But it is unclear how China will enforce these rules.