Hello, this is Hamamoto from TIMEWELL. China's rare earth export controls have moved in rapid succession, from Announcement No. 18 in April 2025 to the dual-use controls targeting Japan in January 2026, making it hard to tell what is currently controlled and what is suspended. In this article, drawing on primary sources from MOFCOM (Ministry of Commerce) announcements, I organize the regulatory structure and scope of impact in a beginner-friendly way. I treat this neutrally as export control by a sovereign state, in the same way as the U.S. EAR or Japan's Foreign Exchange and Foreign Trade Act.
What You'll Learn in This Article
- The three-tier structure of China's Export Control Law, the Regulations on Export Control of Dual-Use Items, and MOFCOM announcements
- The "7 permanently controlled elements" still in force (Sm/Gd/Tb/Dy/Lu/Sc/Y)
- The "5 additional elements" (Ho/Er/Tm/Eu/Yb) and related equipment and batteries, suspended until November 10, 2026
- The content and current status of the extraterritorial provisions (the 0.1% rule) and the 50% rule
- How to check in three points whether your company is affected, and the 5 practical steps to take
Just Three Terms to Understand First
China's regulatory documents use a lot of distinctive terminology, so let's nail down at least three terms.
Dual-use items: A general term for goods, technologies, and software that can be used for both civilian and military purposes. Typical examples include semiconductor manufacturing equipment, chemicals, cryptography, and special materials, and countries around the world apply export controls under the same category. The items China controls are likewise these dual-use items, not weapons.
Export licensing: A system in which an exporter inside China applies to MOFCOM and obtains a license for each export. It serves the same function as the U.S. EAR's "License Required" and the licensing system under Japan's Foreign Exchange and Foreign Trade Act, and it has three types: individual, bundled, and general.
Extraterritorial application (re-export controls): A mechanism that extends a country's own law to transactions conducted outside that country. It has the same structure as the U.S. de minimis rule and the FDP rule, and the "0.1% rule" and "50% rule" described later fall into this category (currently suspended).
The Big Picture of China's Rare Earth Export Controls
China's export controls form a four-tier pyramid, from the top-level law down to individual announcements. It is easiest to understand it as the bottom tier being updated each time a new announcement is issued.
[Top tier] Export Control Law (in force since December 2020)
basis for the licensing system, extraterritorial reach, and penalties
[Regulation] Regulations on Export Control of Dual-Use Items (in force since December 2024)
implementing rules for dual-use items (individual, bundled, and general
licenses; end-use management; re-export)
[List] Export Control List for Dual-Use Items (issued November 2024)
enumerates the items subject to licensing
[Announcements] MOFCOM announcements (annual additions and amendments)
e.g., 2025 No. 18, No. 55-58, No. 61, No. 70, and 2026 No. 1
This structure corresponds functionally to the United States' chain of ECRA, the EAR, the CCL, and individual Federal Register notices, and to Japan's Foreign Exchange and Foreign Trade Act, its Export Trade Control Order and Ministerial Ordinance on Goods, and administrative circulars. Even items outside the list can require a license application if their end use is judged to involve weapons of mass destruction or military purposes. This catch-all control is also common to the United States, Japan, and the EU.
The three types of export licenses
The Regulations on Export Control of Dual-Use Items organize licenses into three types.
| Type | Description | Typical use |
|---|---|---|
| Individual license | One batch, one license | Standard cases |
| Bundled license | Multiple exports to the same counterparty over a set period | Counterparties with an established track record |
| General license | For highly reliable exporters, based on post-shipment management | Companies with advanced compliance certification |
In December 2025, MOFCOM announced that it had granted its first general license to highly reliable exporters and counterparties (per media reports).
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The 7 Permanently Controlled Elements (Announcement No. 18 of 2025)
MOFCOM Announcement No. 18, dated April 4, 2025, added seven medium and heavy rare earth elements and related items (metals, alloys, oxides, compounds, mixtures, sputtering targets, and permanent magnet materials) to the scope of export controls. This measure is not covered by the comprehensive suspension of November 2025 discussed below, and it remained in force as of May 2026.
| Element | Symbol | Category | Main industrial uses |
|---|---|---|---|
| Samarium | Sm | Medium REE | Samarium-cobalt magnets (heat-resistant motors, space and defense) |
| Gadolinium | Gd | Medium REE | MRI contrast agents, neutron absorbers in nuclear reactors |
| Terbium | Tb | Medium REE | High-temperature additive for NdFeB magnets, green phosphors |
| Dysprosium | Dy | Medium REE | Improving coercivity of NdFeB magnets (essential for EV motors) |
| Lutetium | Lu | Heavy REE | PET detectors, petroleum refining catalysts |
| Scandium | Sc | (Quasi-REE) | High-strength aluminum alloys (aircraft, 3D printing) |
| Yttrium | Y | Heavy REE | YAG lasers, phosphors, high-temperature superconductors |
Supplement: the 17 rare earth elements and the "medium and heavy" group
Rare earths comprise 17 elements in total: the 15 lanthanides plus scandium (Sc) and yttrium (Y). Despite the name "rare," their abundance in the Earth's crust is not extremely low; the essential point is that the places where they can be economically separated and refined are concentrated in a few locations. Industry generally organizes them as follows.
| Category | Main elements | Main uses |
|---|---|---|
| Light REE (LREE) | La, Ce, Pr, Nd, Pm, Sm | Catalysts, glass polishing, permanent magnets (Nd) |
| Medium REE (MREE) | Sm to Dy (Eu, Gd, Tb, etc.) | High-temperature performance of permanent magnets, phosphors |
| Heavy REE (HREE) | Ho to Lu, Y | Improving coercivity of permanent magnets, lasers, medicine |
The medium and heavy rare earths together are referred to as the "medium and heavy rare earth group." The seven elements covered by Announcement No. 18 are also concentrated in this category.
The 5 Suspended Elements (Announcement No. 57 of 2025)
The controls added by Announcements No. 55-58, dated October 9, 2025, have been suspended until November 10, 2026 by Announcement No. 70, dated November 7, 2025. Among the suspended measures, the five additional elements are as follows.
| Element | Symbol | Category | Main uses |
|---|---|---|---|
| Holmium | Ho | Heavy REE | Medical lasers |
| Erbium | Er | Heavy REE | Optical communication amplifiers, lasers |
| Thulium | Tm | Heavy REE | Portable X-ray devices |
| Europium | Eu | Medium REE | Red phosphors, displays |
| Ytterbium | Yb | Heavy REE | Optical fiber amplifiers, atomic clocks |
Note that some reports include translations listing "iron" and "bronze," but these most likely stem from translation errors in the original Chinese text. Multiple English-language primary sources confirm the five elements Ho, Er, Tm, Eu, and Yb.
Related controls suspended at the same time
Announcements No. 55, 56, and 58 cover items beyond the five elements that also affect supply chains, and all are suspended until November 10, 2026.
| Announcement | Scope |
|---|---|
| No. 55 | Superhard materials and synthetic diamond |
| No. 56 | Rare earth mining and refining equipment, and extraction agents |
| No. 58 | Lithium-ion batteries and synthetic graphite anode materials |
A notable feature is that the suspension covers not only the rare earths themselves but also mining and refining equipment and battery materials, all in one package.
Extraterritorial Provisions: Overseas Products Made with Chinese-Origin Materials Are Also Covered
Announcement No. 61 of October 2025 included provisions requiring a Chinese license even for products manufactured outside China, under the following conditions (suspended until November 10, 2026).
The 0.1% rule (equivalent to de minimis)
If Chinese-origin rare earths (items listed in the announcement's annex) account for 0.1% or more of the price of an overseas product, then exporting that overseas product also requires a Chinese license. This is functionally the same as the U.S. de minimis rule, under which the U.S. EAR reaches foreign products that contain U.S.-origin items above a certain percentage. The 0.1% threshold is on the strict side, but this is thought to reflect the small share that rare earths occupy in a product's value.
The 50% rule (affiliate controls)
It was made explicit that subsidiaries and affiliates that are 50% or more owned or controlled by a company on the control list are subject to the same controls as the parent. This mirrors the "Affiliates Rule (50% rule)" that the U.S. Department of Commerce's BIS introduced in September 2025.
Products made with China-origin technology
"Products manufactured using China-origin extraction, separation, or magnetic-material production technology" were also subject to extraterritorial application. This corresponds functionally to the United States' Foreign Direct Product Rule (FDPR).
Practical scenarios: three patterns
If extraterritorial application resumes, cases like the following could be covered.
| Scenario | Path by which it becomes subject to control |
|---|---|
| Chinese-produced Dy procured indirectly through a trading company | Covered by Announcement No. 18 at the point the trading company moves it out of China |
| Components in which an overseas OEM has incorporated Chinese-origin rare earths | If they account for 0.1% or more of the finished product, a license is required even for the OEM's export to Japan |
| Chinese rare earths re-imported via the United States | Subject to enforcement as circumvention via a third country |
Even if you do not buy directly from China, tracing the supply chain upstream can still expose you to these controls. That is a defining feature of this regime.
A Timeline of Developments in 2025-2026
Arranging the announcements covered so far in chronological order gives the following.
| Date | Event |
|---|---|
| December 1, 2024 | Regulations on Export Control of Dual-Use Items and the List enter into force together |
| February 2025 | Tungsten, tellurium, bismuth, molybdenum, and indium added |
| April 4, 2025 | Announcement No. 18: seven medium and heavy rare earth elements (Sm/Gd/Tb/Dy/Lu/Sc/Y) added to the licensing regime |
| October 9, 2025 | Announcements No. 55-58: five additional elements, equipment, lithium-ion batteries, and superhard materials added. Announcement No. 61: extraterritorial application and the 50% rule introduced |
| November 7, 2025 | Announcement No. 70: suspends Announcements No. 55, 56, 57, 58, 61, and 62 until November 10, 2026 |
| December 18, 2025 | MOFCOM grants its first general license to highly reliable exporters and counterparties (reported) |
| January 6, 2026 | Announcement No. 1 of 2026: bans exports of dual-use items (including the seven elements) to military end uses and end users in Japan |
| November 10, 2026 (scheduled) | The suspension under Announcement No. 70 expires, and extraterritorial application, the five additional elements, and related controls are scheduled to resume |
There are two key points.
- Announcement No. 18 (the seven elements) is not among the suspended measures and remains in force.
- Because the suspension expires on November 10, 2026, you need to continuously watch operational information to see whether it will be resumed, amended, or extended.
A Three-Point Check on Whether Your Company Is Affected
Even if you think this may not concern you, checking the following three points reveals the scope of impact.
Check 1: Do your components contain any of the seven elements?
Companies that handle EV drive motors, industrial servo motors, wind turbines, MRI, PET, YAG lasers, display phosphors, or samarium-cobalt magnets are almost certainly affected. The following industry-by-industry mapping is a useful reference.
| Industry | Affected components | Example uses |
|---|---|---|
| Automotive (incl. EVs) | NdFeB magnets (with Dy, Tb added) | Drive motors, steering, sensors |
| Semiconductor manufacturing equipment | Rare earth alloys, abrasives, specialty gases | Etching and polishing processes |
| Defense and aerospace | SmCo magnets, Sc alloys | Fighter jets, guidance systems, radar |
| Medical devices | Gd (MRI), Lu (PET) | Diagnostic imaging |
| Renewable energy | NdFeB magnets | Wind turbines |
| Consumer electronics | Y, Eu (phosphors) | Displays, LEDs |
Check 2: Does your procurement route involve China?
Even if you do not import directly, it is not uncommon to use Chinese-produced rare earths indirectly through trading companies, overseas OEMs, or third countries. China is said to account for roughly 60 to 70% of Japan's rare earth imports, and nearly all of the heavy rare earths Dy and Tb are said to pass through China.
Check 3: Do your end uses or end users involve the military?
Under Announcement No. 1 of 2026, in January 2026, exports of dual-use items including the seven elements to military end uses and end users in Japan became non-permissible in principle. You need to check whether your business partners include such entities, for example defense equipment suppliers or military-related subsidiaries that are 50% or more owned.
Risks of Non-Compliance
The penalty framework under China's Export Control Law has two tiers: administrative penalties and criminal penalties.
| Type of violation | Penalty |
|---|---|
| Unlicensed export | Order to cease the unlawful act, confiscation of illegal income, and a fine of 5 to 10 times the value of the illegal business (cases of up to 20 times exist) |
| Revocation of export business qualification | For serious violations, the export business license for the item is revoked |
| Individual liability | Fines for directly responsible persons, suspension from duties, and a ban on engaging in export-related work |
| Criminal liability | Smuggling, illegal business operation, and similar offenses. Imprisonment in serious cases |
| Other | Listing on the Unreliable Entity List. For foreign companies, restrictions on transactions, investment, and entry involving China |
Both corporations and individuals are covered, and Chinese subsidiaries of Japanese companies and their expatriate staff can also be subject to it. There were reports in February 2026 that 20 Japanese companies had been placed on a watch list or similar, so the structure is one in which Japanese corporate entities effectively bear the risk.
Five Practical Steps to Take
To minimize the impact of China's rare earth controls, I recommend the following five steps.
Step 1: Inventory components that use rare earths. From purchasing data and bills of materials (BOMs), identify components that contain rare earths. HS codes 85051110 (permanent magnets) and 28530030 (rare earth compounds) are good entry points.
Step 2: Trace the country of origin across the supply chain. Confirm the country of origin of rare earth raw materials down to your primary and secondary suppliers, including routes via trading companies, OEMs, and third countries. In preparation for the resumption of the 0.1% rule, also prepare traceability documents (certificates of origin, import customs documents).
Step 3: Classify end uses and end users. Sort your shipment destinations into "civilian," "military end use or end user," and "unclear." Because Announcement No. 1 of 2026 makes exports of the seven elements to military-related destinations in Japan non-permissible in principle, early action is needed for any applicable transactions.
Step 4: Pursue a two-track plan of licensing and alternative sourcing. Work with the Chinese exporter to advance the necessary license applications. The statutory review period is up to 45 business days, but delays of several months have been reported in practice. In parallel, monitor developments at Lynas (Malaysia), MP Materials (United States), Carester (France), and others.
Step 5: Maintain ongoing monitoring on the assumption that controls will resume. The suspension under Announcement No. 70 expires on November 10, 2026. You need to continuously monitor MOFCOM announcements to see whether it becomes an extension of the suspension, a resumption, or a reintroduction in a different form.
Common Misconceptions and FAQ
Q1. If we go through a trading company, isn't it irrelevant?
Even when going through a trading company, a license application under Announcement No. 18 is required at the point the trading company moves the goods out of China. If the trading company cannot obtain the license, the goods will ultimately not arrive. MOFCOM has also explicitly designated circumvention via third countries as subject to enforcement.
Q2. If we only consume the goods within Japan, is it irrelevant?
Even for domestic consumption, you cannot procure the goods unless the Chinese export license is granted at the point of import from China to Japan. For civilian uses, licenses tend to be granted, but you need to plan on the assumption of delays in the application process and requests for additional information.
Q3. I heard it is "suspended." When will it resume?
The suspension under Announcement No. 70 runs until November 10, 2026. It could be resumed or amended before then, and the suspension could also be extended. Note that the control of the seven elements under Announcement No. 18 is not among the suspended measures and remains in force.
Q4. How should we conduct classification (whether items are controlled)?
Cross-reference the item numbers in the Export Control List for Dual-Use Items against your product specifications (chemical composition, use, and HS code). Classification is difficult for embedded and processed items, and JETRO also recommends using MOFCOM's inquiry system or consulting specialized organizations such as CISTEC.
Q5. Are Japanese companies also subject to penalties?
Because China's Export Control Law primarily regulates exports from within China, the exporter (the Chinese company) is the primary target. However, if the extraterritorial provisions resume, overseas companies will also need a Chinese license, and being placed on the Unreliable Entity List would restrict transactions with China across the board.
Summary
- China's rare earth controls operate through a four-tier structure: the Export Control Law, then the Regulations on Export Control of Dual-Use Items, the List, and MOFCOM announcements
- What remains in force is the "7 permanently controlled elements" under Announcement No. 18 (Sm/Gd/Tb/Dy/Lu/Sc/Y)
- The five additional elements (Ho/Er/Tm/Eu/Yb) under Announcements No. 55-58, and the extraterritorial application (the 0.1% rule) and 50% rule under Announcement No. 61, are suspended until November 10, 2026 under Announcement No. 70
- Under Announcement No. 1 of 2026, dual-use items including the seven elements are non-permissible in principle for military end uses and end users in Japan
- The structure is functionally symmetric with the U.S. EAR, Japan's Foreign Exchange and Foreign Trade Act, and EU Regulation 2021/821. It is most accurate to understand it as an export control regime that each country introduces from the standpoint of economic security
Related articles include The U.S. BIS Affiliates Rule (50% Rule), The Supply Structure of Critical Minerals, and Key Changes to Export Controls in 2026.
If You're Unsure Whether You Can Handle This In-House
The difficulty of China's rare earth controls is that it does not end with the question of whether you use the seven elements. Because of the extraterritorial provisions (the 0.1% rule and the 50% rule), you need to trace your entire supply chain retroactively: materials procured indirectly through trading companies, components incorporated by overseas OEMs, re-exports via the United States, and more.
TRAFEED (formerly ZEROCK ExCHECK) uses a knowledge graph of more than 200 million entries spanning papers, patents, researchers, corporations, and regulatory lists to visualize a counterparty's ownership chain, country of origin, and related companies in five seconds. It lets you check Chinese, U.S., EU, and Japanese regulations in one place, and it runs on domestic servers in the AWS Tokyo region, keeping confidential information secure.
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References
Chinese government (official)
- MOFCOM Announcement No. 18 of 2025 (seven medium and heavy rare earth elements): https://www.mofcom.gov.cn/zwgk/zcfb/art/2025/art_9c2108ccaf754f22a34abab2fedaa944.html
- MOFCOM (English version): https://english.mofcom.gov.cn/Policies/AnnouncementsOrders/art/2025/art_0dd87cbee7b045bf93fabe6ab2faceee.html/
- MOFCOM announcements page: https://www.mofcom.gov.cn/zcfb/blgg/gg/2025/index.html
- MOFCOM Bureau of Industry Security and Import and Export Control: https://aqygzj.mofcom.gov.cn/
Japanese government and related institutions
- JETRO: China's trade control system: https://www.jetro.go.jp/world/asia/cn/trade_02.html
- JETRO: China's rare earth export controls (series 1-4): https://www.jetro.go.jp/biz/areareports/special/2026/0101/
- JETRO: Export controls on seven medium and heavy rare earths (April 2025): https://www.jetro.go.jp/biznews/2025/04/9008601e0d63d27d.html
- JETRO Business News: Announcements No. 55-58: https://www.jetro.go.jp/biznews/2025/10/3604e5b18bf9755d.html
- CISTEC: China's Export Control Law: https://www.cistec.or.jp/service/china_law.html
- CISTEC: Provisional translation of the Regulations on Export Control of Dual-Use Items: https://www.cistec.or.jp/service/keizai_anzenhosho/china/data/20241021_yaku.pdf
- CISTEC: Full-spec re-export controls across three categories of rare earth export control (October 2025): https://www.cistec.or.jp/service/keizai_anzenhosho/china/data/20251009.pdf
- CISTEC: 2026 edition of the license control catalog for import and export of dual-use items and technologies: https://www.cistec.or.jp/service/keizai_anzenhosho/china/data/20260108.pdf
- Ministry of Economy, Trade and Industry: White Paper on International Economy and Trade 2025: https://www.meti.go.jp/report/tsuhaku2025/2025honbun/i2140000.html
Analysis from international law firms and others
- White & Case, "China imposes extraterritorial jurisdiction and a 50% Rule": https://www.whitecase.com/insight-alert/china-imposes-extraterritorial-jurisdiction-and-50-rule-export-controls-rare-earth
- Holland & Knight, "China Imposes Export Controls on Medium and Heavy Rare Earth Materials": https://www.hklaw.com/en/insights/publications/2025/04/china-imposes-export-controls-on-medium-and-heavy-rare-earth-materials
- Pillsbury, "China Suspends Export Controls on Certain Critical Minerals": https://www.pillsburylaw.com/en/news-and-insights/china-suspends-export-controls-certain-critical-minerals-related-items.html
- Hogan Lovells, "Regulations on the export control of dual use items": https://www.hoganlovells.com/en/publications/china-issues-the-regulations-on-the-export-control-of-dual-use-items
- TMI Associates, "Regulations on Export Control of Dual-Use Items and the Export Control List for Dual-Use Items": https://www.tmi.gr.jp/eyes/blog/2024/16392.html
- King & Wood Mallesons, "Reading China's dual-use export control regime through its rare earth export controls": https://note.com/kwmjapan/n/n3f21a483e218
News and analysis
- CGTN, "China imposes export control measures on 7 rare earth items": https://news.cgtn.com/news/2025-04-04/news-1CiFsoZXPVK/p.html
- China Briefing, "China's Rare Earth Export Controls": https://www.china-briefing.com/news/chinas-rare-earth-export-controls-impacts-on-businesses/
- Global Times, "China suspends implementation of certain export control measures": https://www.globaltimes.cn/page/202511/1347625.shtml
- IEA, "China's share in rare earth magnet production, 2024": https://www.iea.org/data-and-statistics/charts/china-s-share-in-rare-earth-magnet-production-2024
- CSIS, "The Consequences of China's New Rare Earths Export Restrictions": https://www.csis.org/analysis/consequences-chinas-new-rare-earths-export-restrictions
- Nomura Research Institute, Takahide Kiuchi column: https://www.nri.com/jp/media/column/kiuchi/20251128_2.html
- Sasakawa Peace Foundation, China's rare earth export controls and responses by various countries: https://www.spf.org/spf-china-observer/document-detail071.html