China's Strategic Minerals Policy
Nov 04, 2025|
View:27On November 1, 2025 (local time), the White House announced that China and the United States had reached a trade agreement, under which China will issue general export licenses for key minerals including rare earths, gallium, germanium, antimony and graphite. This policy adjustment, which effectively lifts the export controls implemented in October 2022 and April 2025, and suspends the stricter measures announced in October 2025 for one year, has attracted global attention to China's regulatory philosophy on strategic mineral resources. Behind this decision lies a sophisticated policy logic that balances national security, industrial development and global supply chain stability.
I. The Evolution of Regulatory Policy: From Targeted Control to Flexible Opening
China's management of strategic minerals has undergone a systematic evolution, reflecting a clear strategic thinking of "governing according to law and adapting to changes". As early as 2022, export controls on key minerals were introduced to safeguard national resource security and prevent unauthorized flow to sensitive fields. The regulatory upgrade in April 2025 further focused on medium and heavy rare earths such as samarium, gadolinium and terbium, which are critical to high-end manufacturing. The even stricter measures announced in October 2025 established a "full-chain penetrating supervision" system, covering mining, smelting, processing and technical services, with a 0.1% component threshold to regulate overseas products containing Chinese rare earth elements .
The latest decision to issue general licenses is not a reversal of policy, but a flexible adjustment based on comprehensive assessments. As emphasized by China's Ministry of Commerce, export controls have always been a normal part of improving the regulatory system in accordance with the law, not targeting specific countries or regions . The general license system maintains the government's regulatory power while simplifying procedures for legitimate civil use, which is a concrete manifestation of optimizing the business environment for compliant trade. This "adjustable and controllable opening-up" model fully demonstrates China's ability to balance security and development in strategic resource management.
II. Policy Logic: Safeguarding Core Interests While Fulfilling International Responsibilities
The core driving force behind China's policy adjustment lies in two fundamental considerations: safeguarding national security and promoting the stable operation of the global industrial chain. Strategic minerals such as rare earths, gallium and germanium are known as the "vitamins of modern industry", with irreplaceable applications in new energy vehicles, semiconductors, aerospace and other fields. Each F-35 fighter jet requires more than 400 kilograms of rare earth materials, and each Tesla Model 3 uses about 5 kilograms of neodymium-iron-boron magnets . China's dominant position in the industrial chain—controlling 90% of global rare earth smelting capacity and 93% of permanent magnet manufacturing capacity —means that its regulatory policies have a direct impact on global supply security.
The previous regulatory measures were mainly aimed at addressing risks such as illegal transfer of strategic resources to military-sensitive fields and unsustainable exploitation . The new general license policy responds to the urgent demand for stable supply in the global industrial chain. It not only ensures that legitimate civil needs in countries around the world are met, but also prevents the disorderly flow of resources through institutionalized management. This approach is in line with international practices—many countries have established export control systems for dual-use items related to national security . China's policy design also includes humanistic considerations, such as exempting licenses for emergency humanitarian relief and setting reasonable transition periods for existing contracts , fully reflecting its sense of responsibility as a major country.
III. Market Response and Industrial Impact: The Value of Scarce Resources Remains Unchanged
The market reaction to the policy adjustment fully confirms the rationality of China's regulatory strategy. Data from November 2025 shows that the prices of medium and heavy rare earths continued to rise despite the expected increase in supply: the average price of dysprosium oxide surged to 1.5625 million yuan per ton, terbium oxide exceeded 6.6 million yuan per ton, and metallic dysprosium reached 1.9675 million yuan per ton . This price trend reflects the fundamental logic of supply and demand in the global rare earth market—medium and heavy rare earths are scarce global resources with limited reserves, and their demand is booming due to the rapid development of high-end manufacturing and new energy industries.
The differentiated performance of the capital market further illustrates the market's recognition of China's industrial advantages. While Chinese rare earth ETFs saw a 300% increase in scale within a month, with midstream and downstream enterprises focusing on high-value-added products benefiting significantly , some overseas rare earth concept stocks experienced corrections, reflecting the market's reassessment of supply patterns. This contrast shows that China's position in the global strategic mineral industrial chain—built on core technologies such as cascade extraction and cost advantages (smelting costs are only one-third of those overseas )—cannot be shaken in the short term.
IV. Looking Ahead: Building a More Stable Global Supply Chain Ecosystem
China's strategic mineral policy adjustment sends a clear signal to the world: in the era of deep global industrial integration, the management of strategic resources should not be a zero-sum game, but should pursue win-win cooperation based on rules and mutual trust. The general license system retains China's right to regulate exports, which helps prevent excessive exploitation of resources and promotes the high-quality development of the domestic industry—such as advancing technological innovation in 3nm process rare earth targets and building circular utilization bases .
At the same time, China's policy also provides opportunities for the diversification of the global supply chain. While countries such as the United States and Australia are promoting cooperation in mineral development , China's orderly opening-up helps avoid drastic fluctuations in the global supply chain. This "multi-polar supply + Chinese core" pattern is conducive to reducing geopolitical risks and promoting the healthy development of the global high-end manufacturing industry.
In the context of the newly revised Mineral Resources Law coming into effect , China's strategic mineral management will be more institutionalized and standardized. The country will continue to adhere to the principle of "controlling while opening up", safeguard national security and development interests, and at the same time actively participate in international cooperation on non-proliferation and supply chain security . For the global market, understanding China's policy logic of "safety first, flexibility and efficiency" is crucial to coping with supply chain changes.
In an era when strategic resources are increasingly linked to technological competition and industrial security, China's policy practice provides a valuable reference for global resource governance. By balancing development and security, and coordinating domestic and international interests, China is contributing to building a more stable, resilient and mutually beneficial global strategic mineral supply chain system.
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