China mulls ban on export of rare earth magnet tech amid tensions with US

China is reportedly mulling a ban on the export of technologies used to produce high-performance rare earth magnets deployed in electric vehicles, wind turbine motors and other products amid rising tensions with the US. 

Amid a growing shift toward decarbonization and the use of electric motors, China is believed to be eyeing control of the magnet supply chain and establishing its dominance in the flourishing environment sector.

According to reports, Beijing is currently in the process of revising its Catalogue of Technologies Prohibited and Restricted from Export — a list of manufacturing and other industrial technologies subject to export controls.

In December, Chinese officials announced a plan for 43 amendments or additions to the country’s technology restriction act, while some proposed amendments “would prohibit or limit exports of alloy tech for making high-performance magnets derived from rare earth.”

The officials released a draft of the revised catalog for public comment after announcing the plan. The consultation period came to an end in January, and the amendments could be brought in as early as 2023, reports said.

The draft revision says the export ban and restrictions are aimed at protecting “national security” and are in the “public interest of society", according to a report in Japan News published on Wednesday.

The decision comes as the US has been tightening its grip over semiconductor technology and over the heart of the semiconductor technology center of the world - Taiwan and the Taiwan Semiconductor Company (TSMC).

A semiconductor is the most essential technological component in developing hi-tech military equipment and computing that has assumed great significance in recent years amid rapid advancements in the tech sphere.

The rare earth magnets, developed in the 1970s and 1980s, are strong permanent magnets made from alloys of rare earth elements, producing significantly stronger magnetic fields than other types such as ferrite or alnico magnets.

As per data, China controls about 90 percent of the market for samarium cobalt magnets and roughly 84 percent of the market for neodymium magnets worldwide.

If China bans the export of such technologies, it would become difficult for the US and Europe to enter the market and make them totally dependent on China, according to a report in Japan News, citing a European source.

Since China is still lagging behind when it comes to advanced semiconductors, “they’re likely going to use rare earth as a bargaining chip since rare earth are a weak point for Japan and the US”, Nikkie Asia cited a source in the resources industry as saying on Thursday.

As the world moves towards reducing its carbon footprint and getting rid of fossil fuels, the use of electric motors is expected to skyrocket in years to come.

Through the export restriction imposed on the magnet technology, experts believe China seeks to establish its dominance over it by taking control of the magnet supply chain, as it aims to end US hegemony along with sending a clear message about its stance on Taiwan.

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