Navigating a New Era of Global Supply Chains: China's Expanded Export Controls

On 9 October 2025, China's Ministry of Commerce (商务部) and the General Administration of Customs (海关总署) announced a sweeping new set of export control measures that are set to reshape global supply chains. Effective 8 November 2025, these regulations go far beyond previous restrictions, targeting not only finished products but also the critical materials, specialised equipment, and key technologies used to produce them.

This move marks a significant step in Beijing's strategy to consolidate its control over supply chains for strategically vital materials and technologies. According to a Ministry of Commerce spokesperson, the items under control have "obvious dual-use properties," with both civilian and military applications. The stated purpose of the controls is to safeguard national security and interests and to fulfill international non-proliferation obligations.

Below is a breakdown of the key items now subject to export controls and what these new regulations mean for the global market.

The Items Under Control

The new measures, detailed in Announcements No. 55 through 58 of 2025, cover a wide range of materials and technologies across several high-tech industries:

• Rare Earths and Related Production Equipment: The new regulations add five medium- and heavy-rare earth metals - holmium, erbium, thulium, europium, and ytterbium - to an existing list of seven controlled elements. This group is essential for everything from laser technology and fibre optics to advanced defence systems and specialised magnets used in electric vehicles and wind turbines. Crucially, the controls also extend to the specialised equipment and raw materials used for rare earth separation, processing, and refining, a sector where China holds a near-monopoly on global production.

  
  

• High-End Lithium Batteries and Critical Battery Components: The measures introduce a licensing requirement for high-end rechargeable lithium-ion batteries with a weight energy density of 300 Wh/kg or greater. This category is particularly important for advanced electric vehicles and high-performance energy storage systems. The regulations also cover critical battery components, including specific grades of lithium iron phosphate (LFP) cathode materials, precursors for ternary cathodes (NCM and NCA hydroxides), and artificial graphite anode materials.

  
  

• Battery and Material Production Equipment: A key aspect of the new policy is its focus on manufacturing technology. The controls list a wide array of equipment used to make both batteries and their components. This includes winding, stacking, and electrolyte filling machines for battery production, as well as roller kilns and grinding equipment for cathode materials and specialised graphitisation furnaces for anodes.

  
  

• Super-Hard Materials: Certain types of synthetic diamond materials are now subject to export controls. This includes specific grades of diamond micro-powder and single crystals, as well as tools like diamond wire saws and grinding wheels that use these materials. The regulations also target the equipment and technology used to produce them.

The Strategic Implications for Global Supply Chains

These comprehensive export controls go beyond simple restrictions on goods. By targeting the entire value chain - from raw materials and processing equipment to finished products - China is effectively solidifying its strategic dominance in these critical sectors. The new regulations could have a profound impact on global businesses and governments:

1. Increased Administrative Burden and Delays: Companies that rely on Chinese suppliers for any of the listed items will now need to apply for export licenses. This process can be lengthy and unpredictable, introducing significant delays and administrative complexity that could disrupt production schedules for manufacturers worldwide. The regulations even have an extraterritorial component, requiring foreign companies to get approval to export products that contain Chinese-origin materials, potentially creating a "foreign direct product rule" for critical minerals.

   
   

2. Higher Costs and Supply Chain Vulnerability: The new licensing requirements and potential for supply shortages may force companies to seek alternative, and often more expensive, non-Chinese sources for materials and equipment. This not only increases costs but also highlights the fragility of supply chains that are heavily dependent on a single country.

   
   

3. Acceleration of Diversification Efforts: This move will likely serve as a wake-up call for countries and corporations to accelerate their efforts to diversify supply chains and invest in domestic or allied production. The restrictions on processing equipment and technology are particularly significant, as they make it harder for other nations to build their own independent rare earth and battery value chains.

   
   

4. A Geopolitical Tool: The timing of these announcements suggests a broader strategic aim. By leveraging its control over these essential inputs, China gains significant negotiating power in ongoing trade and technology disputes.

In conclusion, these export controls represent a new era of global supply chains. They are not simply a trade barrier but a calculated move to assert control over the industries of the future. For the global business community, this means that building resilient, diversified supply chains is no longer a strategic option - it is a critical necessity.