China Imposes Extraterritorial Export Control Measures Over Rare Earth Items

In Short

The Situation: On October 9, 2025, China's Ministry of Commerce ("MOFCOM") unveiled several new measures tightening export controls of sensitive materials and technologies. Most notably, the new measures assert extraterritorial controls on certain foreign-made items incorporating Chinese-origin rare earth content. Concurrent actions include controls on rare earth technologies, additions to the Unreliable Entity List, and restrictions on dual-use items, such as superhard materials and certain lithium batteries.

The Result: For the first time, China is imposing extraterritorial export controls on certain foreign‑made rare earth items through the Chinese version of the de minimis rule and the foreign direct product ("FDP") rule, as well as adopting a new 50% rule that extends controls to affiliates of listed entities.