Highlights
- China now requires foreign companies to submit highly sensitive business information to secure export licenses for rare earth materials and magnets.
- The new licensing regime threatens intellectual property and forces manufacturers to disclose proprietary details or risk supply disruption.
- China processes over 85% of global rare earths, using its market dominance as leverage to extract commercial intelligence from foreign partners.
In a sharp escalation of its control over global rare earth supply chains ,China is now requiring foreign companies to submit highly sensitive business information—including customer lists, production line videos, and application details—to secure export licenses for critical rare earth materials and magnets, according to a Financial Times investigation.
The new licensing regime, introduced in April, applies to seven key rare earth elements and their corresponding magnet alloys. It has compelled European and U.S. manufacturers to disclose proprietary information, including end-user identities and technical processes, to Chinese authorities or risk supply chain disruption. Industry executives warn this could compromise trade secrets and expose sensitive intellectual property.
“This isn’t industrial espionage from the shadows—it’s institutionalized access,” said a European magnet supplier. “Companies are complying because they need the material. But the long-term risks are profound.”
Despite a recent framework deal between the U.S. and China aimed at restoring rare earth supply chains, there is no indication that Beijing will ease these data disclosure demands. Experts note the requirements often go beyond published guidelines. Even routine export approvals have been denied for “lack of end-user evidence,” prompting firms to submit photographs, operational schematics, and redacted order books.
China processes over 85% of the global rare earths and produces the vast majority of high-strength magnets, which are essential for electric vehicles (EVs), wind turbines, and defense systems. The new controls underscore its use of this dominance not only as leverage in the trade war with the U.S., but as a mechanism to extract commercial intelligence from foreign partners.
Rare Earth Exchanges reiterates its warning: strategic minerals cannot remain at the mercy of geopolitical coercion. A robust U.S. and allied industrial base for mining, refining, and magnet manufacturing is no longer optional—it is an existential economic imperative.
Source: Ryan McMorrow, Joe Leahy, and Kana Inagaki. “China demands sensitive information for rare earth exports, companies warn,” Financial Times, June 12, 2025.
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