Highlights
- China implements a comprehensive tracking system for rare earth magnets, requiring detailed online data submission from magnet producers.
- Export restrictions and a new licensing regime aim to consolidate China’s 90% market control of rare earth magnet exports.
- Global manufacturers, including automakers in Europe, India, Japan, and the U.S., are experiencing production disruptions due to Beijing’s strict controls.
Beijing doubles down on surveillance, licenses, and control as supply chains unravel
China has intensified its grip on the global rare earth element (REE) magnet supply chain with the rollout of a new national tracking system, according to a Reuters report by Lewis Jackson, Hyunjoo Jin, and the Beijing newsroom (June 4, 2025). The move follows April’s sweeping export restrictions on seven heavy rare-earth elements (REEs) and associated magnets. It is expected to delay further shipments critical to the auto, defense, and semiconductor industries.
The new system, effective last week, requires Chinese magnet producers to submit detailed online data, including client names and trading volumes. While Beijing originally proposed such oversight in 2023, the full implementation marks a sharp escalation in China’s effort to consolidate control across the REE supply chain, from mine to magnet.
China, which accounts for 90% of rare earth magnet exports, is now pairing its licensing regime with data surveillance and enforcement mechanisms aimed at cracking down on smuggling, tax evasion, and unauthorized trade—the goal: full-spectrum dominance, not just in resources, but in global transaction visibility.
Already, global manufacturers are feeling the shock. Automakers in Europe, India, Japan, and the U.S. report halted production lines as license approvals stall. Beijing has shown no sign of easing restrictions, despite hopes sparked by the May U.S.-China trade truce.
“China sees rare earths as its ace card,” said Tim Zhang of Singapore-based Edge Research. “This control isn’t temporary—it’s strategic, long-term leverage.”
REEx View
The magnet tracking system is a watershed moment in rare earth geopolitics. Nations dependent on China for critical technologies must treat this as a red alert. Industrial policy—not diplomacy alone—will decide who thrives in the REE era.
Source: Reuters, “China increases scrutiny of rare earth magnets with new tracking system (opens in a new tab),” June 4, 2025
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