China’s New Rare Earths Regulations Trigger US Stock Market Concerns
WASHINGTON D.C. – US stock markets experienced a sharp downturn Thursday following Beijing’s proclamation of stringent new regulations governing the export of rare earth metals, critical components in numerous high-tech industries. The move, requiring exporters to obtain technology transfer licenses for the extraction, smelting, and processing of these materials, sparked fears of supply chain disruptions and ignited concerns over china’s dominance in the sector.
China’s control over rare earth metals – essential for the automotive, electronics, and defense industries – has long been a point of strategic vulnerability for the US and its allies. According to estimates from the United States Geological Survey for 2024, global deposits total 110 million tons, with China holding 44 million tons, and controlling approximately 90 percent of their processing. The new regulations, which took partial effect Thursday and are fully implemented December 1st, extend beyond export restrictions, now requiring any foreign manufacturer incorporating Chinese rare earth metals into their products to seek government permission to sell those goods. This escalation follows Beijing’s earlier spring suspension of exports of certain rare earth minerals and magnets.
The immediate market reaction saw significant losses across key sectors. While a precise dollar figure attributable solely to the Chinese announcement is challenging to isolate, reports indicate a widespread sell-off. CNBC reported market declines Thursday, and Jakub Jakóbowski, deputy director of the center for Eastern Studies and head of the China Team, explained on Platform X that the regulations impact “every foreign manufacturer…that has even a small element of Chinese rare earth metals in its product.” The move is widely interpreted as a presentation of China’s willingness to leverage its rare earth dominance in pursuit of technological and military advantage.
