China tightened export restrictions on rare earth-related items and materials, which are used in high-tech and dual-use products, on Thursday to safeguard national security and interests by preventing them from ending up in the hands of foreign militaries, Beijing said.
Unveiled by China’s Ministry of Commerce, Announcement No. 61 restricts the export of rare earth items and bars their sale to foreign military entities and related firms, as well as some semiconductor-related companies. Announcement No. 62 restricts the export of technologies related to rare earth mining, smelting, separation and other related processes as well as the assembly, debugging, maintenance and repair of related production lines.
“Rare earth-related items have both civilian and military applications, and controlling their export is common international practice,” a Commerce Ministry spokesperson said in response to a reporter’s question on Thursday.
Unspecified foreign individuals and organizations have come into possession of rare earth items from China that have been used in military and other sensitive fields, according to the spokesperson, who said this activity poses “serious harm or potential threats to China’s national security and interests, undermining international peace and stability, and harming global nonproliferation efforts.”
“Therefore, the Chinese government, in accordance with the law, decided to impose export controls on certain overseas rare earth-related items containing Chinese components,” the spokesperson said.
“As a responsible major country, China’s imposition of controls on relevant items reflects its consistent position of firmly upholding world peace and regional stability and actively participating in international nonproliferation efforts.”
China has previously imposed similar export restrictions, including in April. It first started restricting the export of related rare earth technologies as early as 2001, the spokesperson said.
The announcement came a day after U.S. lawmakers calling for more stringent restrictions on the export of chipmaking equipment after finding that U.S. and allied-nation companies have made tens of billions of dollars from selling semiconductor-related equipment to Beijing state-owned and military-linked companies.
The U.S. House of Representatives’ Select Committee on China, local time Tuesday, released a report stating that U.S. and allied-nation companies had “fueled” semiconductor manufacturing in China in exchange for tens of billions of dollars in profit.
The report states that Tokyo Electron in Japan and U.S.-based Lam Research and KLA saw more than 40% of their revenue come from China last year, with ASML in the Netherlands and U.S.-based Applied Materials receiving 36% from the Asian nation.
“It makes little sense to sell the CCP the chips they need to modernize their military and violate human rights. But it makes even less sense to sell them the machines and tools they need to produce those chips themselves,” Rep. Raja Krishnamoorthi, D-Ill., ranking member of the select committee, said in a statement, while referring to ruling Chinese Communist Party by its initials.
“Alongside our allies, we need to protect our national security and ensure we remain the world’s leading innovators in SME.”
The committee called for allies the Netherlands and Japan to align their export controls with those of the United States, expand controls to make it more difficult for China to obtain the restricted items and widen the number of restricted entities, while prohibiting all allied manufacturers from selling to Chinese military entities, among other recommendations aimed at ending companies’ ability to profit from aiding Beijing.
