BDO Indirect Tax News

China has expanded its restrictions on rare earth and permanent magnet exports. On 9 October 2025, the Ministry of Commerce Bureau of Industry Security and Import-Export Control released two announcements (Announcements No. 61 and No. 62) that contain updated export control measures for rare earth-related items and technologies. Under the new policy, foreign firms are required to obtain Chinese government approval to export magnets (even if they only contain trace amounts of Chinese-origin rare earth materials) or that were produced using Chinese technologies, and exports will be prohibited in certain circumstances. While the measures for items originating from China apply as from 9 October, the rules for items manufactured overseas will not apply until 1 December 2025.

Key Points of Announcement No. 61

Announcement No. 61 establishes the extraterritorial application of China's export control regulations. It requires overseas exporters to obtain export approval from China's Ministry of Commerce to export certain rare earth items manufactured outside China if such items incorporate specific materials or technologies originating from China.
 

Focus Area	Key Contents
Scope of Controlled Items	The export of three categories of items are subject to licensing approval: Items manufactured overseas incorporating rare earth-related materials originating from China: Items (e.g., rare earth permanent magnets, rare earth targets) manufactured overseas that incorporate specific rare earth materials sourced from China (e.g., samarium, dysprosium and gadolinium) where the value ratio of such Chinese materials reaches or exceeds 0.1%. Items manufactured overseas utilising Chinese technology: Items (e.g., samarium, dysprosium and gadolinium, as well as rare earth permanent magnets and rare earth targets) produced overseas utilising Chinese rare earth-related technologies, including those for mining, smelting, magnetic material manufacturing and recycling of secondary rare earth resources. Items originating from China: All relevant items originating from China, including metals such as samarium, dysprosium and gadolinium, as well as rare earth permanent magnets and rare earth targets.
Applicable Entities	Overseas organisations and individuals (i.e., "specific overseas export operators"). Note: “Export approval” issued by China's Ministry of Commerce must be obtained before exporting controlled items to countries or regions other than China.
Prohibited Scenarios	Export approval will not be granted in the following circumstances: - Prohibited End-User: Overseas military end-users; importers and end-users on export control lists and watch lists (including their subsidiaries, branches, etc., where there is 50% or greater ownership). - Prohibited End-Uses: Intended or potentially intended for use in weapons of mass destruction, terrorist purposes, or military use or purposes.
Scenarios Subject to Case-by-Case Review	Export applications for the following end-uses will be subject to a case-by-case review: - R&D or the production of logic chips at 14 nanometres and below, memory chips with 256 layers and above, and related manufacturing equipment and materials. - R&D of artificial intelligence technologies with potential military uses.
Effective Date	- For items manufactured overseas (categories 1 and 2 above), the measures will take effect on 1 December 2025. - For items originating from China (category 3), the relevant measures are effective as from 9 October 2025.

Key Points of Announcement No. 62

Announcement No. 62 focuses on the export control of rare earth- related technologies across the entire industry chain, rather than specific physical items.  
 

Focus Area	Key Contents
Scope of Controlled Technologies	The controls cover technologies across the entire rare earth industry chain, primarily including the following categories: Core Production Technologies: Techniques for mining, smelting, separation, magnetic material manufacturing and recycling, along with their carriers (e.g., designs, specifications). Production Line-Related Technologies: Technologies for the assembly, debugging, maintenance, repair and upgrading of related production lines.
Forms of Technology and Carriers	Including but not limited to design drawings, process specifications, process parameters, processing programs, simulation data, etc.
Applicable Parties	Chinese citizens and all individuals, legal enterprises and other organisations in China Note: Covered parties must obtain “Export approval” from the Ministry of Commerce and submit relevant explanations as required.
Effective Date	The measures apply as from 9 October 2025.

BDO Insight

The announcements signal a strategic and regulatory tightening of China’s control over critical materials and technologies. Potentially affected parties should consider making an immediate assessment of their supply chains for exposure to Chinese-origin rare earths or technologies, re-assess any supplier and manufacturing dependencies related to Chinese inputs, and keep current on any additional guidance released by the Chinese authorities.

Emily Li
Erica Zhang
BDO in China