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American Focus > Blog > Economy > China increases scrutiny over rare earth magnets with new tracking system
Economy

China increases scrutiny over rare earth magnets with new tracking system

Last updated: June 4, 2025 6:51 am
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China increases scrutiny over rare earth magnets with new tracking system
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China Implements Tracking System for Rare Earth Magnets Amid Export Restrictions

BEIJING (Reuters) – China has recently put into effect a tracking system for its rare earth magnet sector in response to the export restrictions it has imposed on these critical materials. The new national tracking system, which was implemented last week, requires producers to provide additional information online, including details on trading volumes and client names. This move comes as China’s export restrictions on rare earth magnets have started to disrupt supply chains worldwide.

China, being the world’s largest rare earth magnet supplier and exporter, initiated export restrictions in early April on seven medium to heavy rare earth elements and various magnets, mandating exporters to obtain licenses for shipments. The delays in obtaining these approvals have caused disruptions in supply chains for industries such as automakers and semiconductor companies, with some global automakers already experiencing production line stoppages due to dwindling reserves.

Last June, Beijing had announced plans to establish an information tracing system for rare earth products, but there had been no further mention of it until recently. The introduction of this tracking system indicates that China’s export controls on rare earths and associated magnets, where it holds a near-monopoly on production, may become a permanent feature for these products.

Despite hopes in the U.S. and other countries that these export restrictions would be lifted as part of a trade truce agreed upon in Geneva last month, there is speculation that China will continue to enforce its export control mechanism on rare earths. Tim Zhang, founder of Singapore-based Edge Research, believes that this strategy serves as a strategic advantage for China.

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In addition to tracking rare earth magnets, Beijing’s long-term goal is to monitor the entire rare earth production chain, enhance its control over the sector, and crack down on illicit activities such as smuggling, illegal mining, and tax evasion. This comprehensive approach aims to strengthen China’s dominance in the rare earth market.

As China tightens its grip on rare earth exports, global industries reliant on these materials will need to navigate the evolving landscape of supply chain disruptions. The implementation of the tracking system underscores China’s strategic approach to maintaining control over this crucial sector.

(Reporting by Beijing newsroom and Lewis Jackson, Hyunjoo Jin in Seoul; editing by Veronica Brown, Jason Neely)

TAGGED:ChinaEarthincreasesmagnetsRareScrutinySystemtracking
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