On October 9, China’s Ministry of Commerce and the General Administration of Customs jointly issued a series of announcements, deciding to implement export controls on items including superhard materials, some rare earth equipment and raw auxiliary materials, five types of medium and heavy rare earths, lithium batteries, and artificial graphite anode materials.

These measures will be implemented in phases. Controls on lithium batteries and related materials will officially take effect on November 8, while some rare earth measures will take effect on December 1.

These moves are based on relevant laws and regulations such as the “Export Control Law of the People’s Republic of China,” the “Foreign Trade Law of the People’s Republic of China,” the “Customs Law of the People’s Republic of China,” and the “Regulations on the Export Control of Dual-Use Items” to safeguard national security and interests and fulfill international non-proliferation obligations.

01 Policy Overview: Scope and Timeline

The export control policy covers three key areas: rare earths, lithium batteries, and superhard materials, forming a systematic control system for raw materials and technologies in strategic emerging industries.

In the rare earth sector, controls cover almost the entire chain of core equipment from mining to deep processing, including key equipment such as centrifugal extraction equipment, intelligent continuous impurity removal precipitation equipment, roasting kilns, and extraction tanks.

Meanwhile, primary minerals such as bastnaesite, monazite, and ion-adsorption rare earth ores, as well as key flotation and extraction agents like P507, P204, and naphthenic acid, are also included in the control scope.

In the lithium battery field, the focus is on high-tech threshold products. Lithium-ion batteries with a weight energy density ≥300Wh/kg are the target of controls, covering cells and battery packs.

Simultaneously, six types of key equipment for manufacturing lithium batteries, including winding machines, stacking machines, liquid injection machines, hot pressing machines, chemical formation and capacity division systems, and capacity division cabinets, are also included in the control scope.

Regarding cathode materials, lithium iron phosphate cathode materials with a compacted density ≥2.5g/cm³ and a gram capacity ≥156mAh/g, precursors for ternary cathode materials, and lithium-rich manganese-based cathode materials are all subject to controls.

For graphite anode materials, it includes not only artificial graphite anode materials and their mixed materials but also the full set of equipment and process technology for granulation, graphitization, and coating modification.

02 Technical Threshold: Precisely Defining Control Boundaries

The export controls are not a “one-size-fits-all” approach but define the control boundaries through precise technical parameters, reflecting the characteristic of targeted policy implementation.

Taking lithium batteries as an example, the 300Wh/kg energy density threshold is currently the technical watershed for high-end power batteries, a standard only met by cutting-edge products from leading companies.

Similarly, for lithium iron phosphate cathode materials, the requirements for a compacted density greater than or equal to 2.5g/cm³ and a gram capacity greater than or equal to 156mAh/g are also markers of current high-performance lithium iron phosphate materials.

In the rare earth field, the policy specifically targets technologies and their carriers related to rare earth mining, smelting separation, metal smelting, magnetic material manufacturing, and rare earth secondary resource recycling.

Key processes including manufacturing technologies for samarium-cobalt, neodymium-iron-boron, and cerium magnets are all listed under control.

03 National Security: Balancing Dual-Use Attributes

A spokesperson for the Ministry of Commerce explained that the listed items this time have obvious dual-use attributes and that China’s move is implementing export control measures in accordance with laws and regulations, consistent with international common practices.

Advanced lithium battery technology inherently possesses dual-use characteristics. High-energy-density batteries are used not only in electric vehicles but also in military applications such as drones, individual soldier equipment, and underwater submersibles.

Similarly, as a core material for power batteries, the manufacturing technology of artificial graphite anode materials directly affects battery performance.

The spokesperson clearly stated that the relevant measures are not targeted at any specific country or region and pointed out that it is an international common practice for countries to implement export controls on technologies with dual-use characteristics.

The Chinese government had previously notified relevant countries and regions, demonstrating efforts in policy transparency and prior communication.

04 Global Impact: Immediate Reactions in Industrial Chains and Capital Markets

Capital markets reacted immediately after the policy was announced.

Just hours after the news was released, U.S. rare earth stocks rose collectively in pre-market trading: MP Materials shares rose 4.6%, U.S. Antimony Corp gained over 6%, and USA Rare Earth LLC jumped more than 8%.

This phenomenon reveals the high dependence of international markets on China’s dominant position in key minerals and materials.

China dominates the global rare earth market, supplying about 90% of the world’s refined rare earth products according to industry data.

In the lithium battery industry chain, China controls over one-third of global lithium processing capacity and about 70% of cathode material capacity.

These export controls will directly affect the global supply chains for electric vehicles, energy storage systems, and high-end electronic products, potentially tightening the supply of high-end battery materials and accelerating the process for other countries to seek alternative sources.

05 Compliant Trade: Licensing Mechanisms and Transitional Arrangements

According to the announcement, exporters wishing to ship controlled items must apply for permission from the competent department of commerce under the State Council in accordance with relevant regulations.

Legitimate and compliant export applications can still obtain permits.

Exporters shall be responsible for the authenticity of declared goods and strengthen the identification of exported items. For controlled items, they must indicate “subject to dual-use items” in the remarks column of the customs declaration form and list the export control code for dual-use items.

For goods already in transit or under contract, the policy provides transitional arrangements.

Controls on lithium batteries and related materials will officially take effect on November 8, while some rare earth measures will take effect on December 1, allowing enterprises time to adapt.

The Chinese government has expressed willingness to communicate with relevant parties on export control policies and practices through bilateral export control dialogue and exchange mechanisms to jointly promote compliant trade.

Just hours after the policy was introduced, U.S. rare earth stocks rose: MP Materials shares were up 4.6%, U.S. Antimony Corp gained over 6%, and USA Rare Earth LLC surged more than 8%.

This market reaction underscores the global industrial chain’s high dependence on China’s dominant position in key minerals and materials.

As the Ministry of Commerce stated, these measures are not targeting any specific country but are routine actions based on national security interests.

With the November 8 effective date approaching, companies across the global new energy industrial chain are reassessing their supply chain risks and technology roadmaps.