China Issues Rare Earth Export-Control Law Following US Moves

Including rare earth elements, China passed a law restricting exports of controlled items, allowing the government to act against countries that abuse export controls in a way that harms China's interests, state media said. Amid the China and US science technology war, the rare earths regarded as strategic materials, will face export controls, leading to soaring prices.

China and the United States have clashed over issues including trade, human rights, technology and the new coronavirus. The new Chinese law, passed by the National People's Congress Standing Committee, the country's top legislative body, take effect on Dec 1.

Controlled items include military and nuclear products, as well as other goods, technologies and services and relevant data, according to a statement on the National People's Congress website.

It said the law was "formulated for the purpose of safeguarding national security and interests." In August, China's commerce ministry issued a revised list of technologies that are banned or restricted for export.

Due to concerns about potential export controls, the buying of rare earths has heated up. Three main types of rare earths, terbium oxide, praseodymium and neodymium oxide, and dysprosium oxide, rose to new highs in eight years, three years, and five months respectively.

Rare earths are essential raw materials for many military and high-tech industries, and the mainland accounts for 95% of the world's rare earth exports. Therefore, there is a saying that "the Middle East has oil, and China has rare earths." Among them, 80% of the rare earths imported by the United States come from the mainland. When the mainland's "Export Control Law" was promulgated in October, foreign media suspected that this might be a way for the mainland to counter the United States, and indirectly caused the price of rare earths to rise.

There are also media reports that the United States often uses strategic means to control exports and combat competitors. After the mainland promulgates the "Export Control Law," it will have legal weapons similar to the United States. Many people believe that the "Export Control Law" may be formulated mainly for the export of rare earths.

However, as the world's largest consumer of rare earths, the US is preparing for the development of the rare earth industry of US$209 million this year in order to revitalize the rare earth industry. In November last year, the United States and Australia, which account for 1/6 of the world's rare earth reserves, started cooperation and have identified 15 mineral development projects including rare earths.

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