China Hardens Export Controls as US Eases Tech Curbs

Key Summary

China is significantly expanding its export control apparatus, particularly concerning rare earths, causing widespread confusion and compliance burdens for its domestic exporters. This tightening coincides with a notable moderation in U.S. technology export restrictions against Beijing, signaling a strategic shift in the economic rivalry between the two global powers.

Situational Overview

Following new regulations on rare-earth materials, China’s commerce ministry has seen a dramatic increase in compliance queries, jumping from 43 between 2019-2024 to 135 in 2025 alone. To support this stricter regime, Beijing is increasing enforcement manpower, with the government adding dozens of new positions dedicated to managing and enforcing its expanding export control laws.

Economic and Market Impact

These opposing policy shifts impact global supply chains across technology, automotive, and defense sectors. While China's actions create uncertainty, the U.S. has slowed its pace of adding Chinese firms to its trade blacklist, with Entity List additions falling from 257 in 2024 to 131 in 2025. This U.S. moderation suggests an acknowledgment of China's growing leverage over critical materials.

Outlook

The evolving strategies indicate a new phase of economic competition where each nation leverages its strengths. Observers view this as China weaponizing its supply chain chokepoints while the U.S. recalibrates its approach to tech sanctions, setting the stage for high-stakes negotiations.

FAQ

Q: Why is China tightening its export controls?
A: Beijing is building a comprehensive export control system to leverage its dominance in strategic sectors, such as rare-earth processing, as a tool in its economic strategy.

Q: How is the U.S. government responding?
A: The U.S. has slowed the rate of new export restrictions on Chinese companies, a move seen by some as a strategic response to China's control over critical supply chains.

Source: Investing.com