China’s recent updates to its rare earth permanent magnet export policy represent a significant development in the global critical minerals landscape. Framed as measures to safeguard national security and fulfill non-proliferation obligations, these policies establish a comprehensive, rules-based system that distinguishes between controlled items and open trade.

The Dual-Layer Control System
The policy operates on two clear, complementary layers established through official decrees:

1. Control on Materials:?The first layer, enacted in April 2025, focuses on specific?medium and heavy rare earth-related items. This includes metals, alloys, oxides, and certain permanent magnet materials like samarium-cobalt (SmCo) and terbium/dysprosium-containing neodymium-iron-boron (NdFeB) magnets.
2. Control on Technology:?The second layer, announced in October 2025, extends controls to the underlying?knowledge and expertise. It requires a license for exporting technologies related to the entire rare earth value chain, from mining and separation to the manufacturing of magnets (specifically SmCo, NdFeB, and Ce magnets). The definition of “export” is broad, covering not only physical transfer but also intangible means like technical services, training, or investment.

Clarifying the Scope: What is?Not?Controlled
A crucial aspect of the policy is the explicit clarification of its boundaries. Chinese authorities have specified that?many integrated downstream products are not subject to the material controls. This includes:

• Key components like?motor rotors and stators, and sensors.
• Finished consumer goods such as magnetic construction toys, magnetic phone cases, chargers, and accessories.
• Other downstream materials like catalytic powders and phosphors.
  This distinction is vital, as it assures global industries that the export of high-value manufactured goods, particularly for sectors like electric vehicles and consumer electronics, remains unimpeded.

Stated Objectives and Implementation
The government consistently states the policy’s twin goals:?protecting national security?by preventing sensitive materials and technologies from being used for military purposes, and?promoting stable, compliant global trade. Officials emphasize that?all compliant export applications for civilian use are approved in a timely manner. Furthermore, the government encourages the use of general licenses to facilitate trade for trusted exporters.

In summary, China’s policy is not an embargo but a targeted licensing regime. It aims to secure its strategic and technological advantages in the rare earth sector while seeking to maintain its central role in the global supply chain for civilian industries.