China's Improvement of Rare Earth Governance is to Safeguard the Stability of the Global Production and Supply Chain

On October 9th, the Ministry of Commerce of China issued two announcements on strengthening the export control of rare earth-related items. The new regulations will impose export control on certain rare earth-related items and technologies that contain Chinese components from abroad. This further improves the rules and measures for the export control of relevant rare earth items and technologies under control in China, and has drawn attention from both domestic and international public opinion. The new regulations will help China better safeguard its national security and interests, and also demonstrate China's consistent stance of firmly maintaining world peace and regional stability and actively participating in international non-proliferation efforts.

This decision is by no means an impulsive one, but rather a part of China's systematic efforts to regulate the rare earth industry. The technology related to rare earths was included in the "Catalogue of Technologies Prohibited or Restricted from Exporting" as early as 2001. In April this year, the Chinese government also implemented export control over rare earth items exported by Chinese organizations and individuals. This announcement is a further improvement and strengthening of the existing management system, which not only demonstrates the continuity and stability of the national export control system, but also represents an enhancement of China's governance capacity in the rare earth sector. It is a routine measure for China to manage the rare earth industry in accordance with the law. Some foreign media are worried that normal rare earth trade may face a situation where "no goods can be imported" or even "stockouts". This is completely unnecessary.

Rare earth-related items have dual-use properties for both military and civilian purposes. Implementing export control over them is a common international practice. Preventing rare earths from being used in activities that undermine international peace and security is an international non-proliferation obligation that all countries must undertake. On September 9th, a spokesperson for the Ministry of Commerce disclosed that in recent times, some foreign organizations and individuals have directly or after processing, transferred or provided rare earth control items originally from China to relevant organizations and individuals, directly or indirectly for use in sensitive areas such as the military. In the face of such behavior that causes significant damage or potential threats to China's national security and interests and has adverse effects on international peace and stability, China, as a responsible major country, must take action. This further confirms the necessity of China's regulation of rare earth-related technology exports.

China's rare earth control is a natural extension of its modern governance system in the industrial field. In the 1990s, the disorderly development of China's rare earth industry due to extensive management not only depleted its resource endowment but also caused significant environmental damage. Such development is unsustainable and will ultimately affect the stability of the global supply chain. Actively aligning with international common practices, regulating and enhancing the governance level of the rare earth industry is not only a demand of China's own industrial development but also an inevitable step for China, as an important supplier of global key minerals, to fulfill its responsibilities as a major country.

China accounts for 37% of the global rare earth reserves and produces over 60% of the global rare earth output. As a major supplier of rare earths, China has never used its resource advantage as a tool for hegemony. China's control over rare earths has always aimed at "regulating exports" rather than "prohibiting exports". Instead, the relevant control policies have always maintained openness and non-discrimination, neither setting barriers against specific countries nor leaving sufficient space for compliant trade. Since the implementation of China's rare earth control policies, not only has the global rare earth supply chain breakdown that some Western media claimed did not occur, but it has also promoted the industry's transformation from low-price, disorderly competition to high-quality development. This new regulation has also specifically reserved policy space for technologies that have entered the public domain, are necessary for basic scientific research, and are required for ordinary patents. All of these fully demonstrate the responsible attitude of the Chinese government in considering the actual needs of market entities. The so-called "China is choking the world's neck" speculation by some Western media is groundless and based on stereotyping others. It ignores the long-term standardized path and peaceful nature of China's rare earth control, and also misunderstands the deep value of its control over the global industrial chain.

Building an open world economy is a consistent proposition of China. As long as it complies with the rules of the World Trade Organization, for China, resource and technology control will never become a form of resource and technology blockade. In the series of rare earth control regulations and policies that China has already introduced, we can see various green channels and exemption procedures, as well as a classified management model of "one case, one trial, one matter, one discussion". Behind these precise measures, as the spokesperson of the Ministry of Commerce said, it is to ensure the security and stability of the global industrial and supply chain. From these rare earth control policies of China, the international community can clearly see the development philosophy that China adheres to, that is, mutual interdependence among countries and shared destiny of the world. Globally, the management of rare earth technology will surely move towards a more standardized and transparent direction. China is playing a constructive role in this process and, through candid dialogue and cooperation, is jointly promoting the establishment of a fairer and more reasonable international rare earth trade order with the international community, and safeguarding the stability and prosperity of the global strategic resource supply chain.