In a significant move that could reshape the global rare earth supply chain, China has issued its first batch of streamlined export licenses for rare earth elements, signaling a tentative but important easing of export restrictions that have gripped the market for most of 2025. The decision comes on the heels of a high-stakes summit between former U.S. President Donald Trump and Chinese President Xi Jinping, which ultimately softened months of intensifying trade tensions between the world’s two largest economies.
According to multiple exclusive reports from Reuters, at least three of China's leading rare earth magnet producers, JL Mag Rare Earth (HKEX:6680), Ningbo Yunsheng (SHA:600366), and Beijing Zhong Ke San Huan High-Tech (SZSE:000970), were granted the first set of new "general licenses." These streamlined permits are designed to expedite the export process by allowing companies to make multiple shipments to clients under single-year authorizations, eliminating the need for repetitive, shipment-by-shipment licensing that previously caused protracted delays and unpredictability in vital industrial supply chains.
Of the three companies, JL Mag secured approvals covering nearly its entire customer base, while the other two received permits for export to a portion of their clients. All three companies declined to comment, as did China’s Ministry of Commerce, reflecting the sensitivity of the issue amid a still-volatile trade landscape.
The newly announced export regime is a direct result of trade negotiations initiated after the Trump–Xi summit in late October, where both leaders agreed on the need to stabilize the supply of critical materials essential for global industries. China’s rare earth export controls, revised in April and again in October, had dramatically affected industries including electric vehicles, consumer electronics, and defense sectors across North America and Europe.
Export restrictions imposed earlier in the year forced companies to obtain a license for each shipment, a bureaucratic bottleneck that led to shortages, supply chain gridlocks, and significant slowdowns, especially for European Union buyers. Of the more than 2,000 applications filed by EU importers, just over half were approved, generating widespread criticism of both inefficiency and lack of transparency in the licensing process.
Although the White House hailed the issuance of general licenses as the “de facto end” of China’s rare earth export restrictions, Beijing has stopped short of publicly confirming any wholesale rollback of its control regime. Chinese authorities maintain that the general licenses serve to facilitate "compliant trade in dual-use items" rather than dismantle export controls altogether. Only a select few large Chinese firms qualify for these permits, though the criteria may broaden if the current rollout proves successful.
As policy uncertainty lingers, the global rare earth industry has been forced to adapt. Facing delays and denials in acquiring critical heavy rare earth materials, leading magnet producers have pivoted toward innovation. According to multiple sources, companies have developed new magnet formulations that minimize or altogether eliminate the use of heavily regulated elements without sacrificing too much performance. Some manufacturers have refined their techniques to grind materials into ultra-fine particles, significantly enhancing heat resistance and performance at temperatures up to 300°F, an acceptable range for many household and industrial applications, though often unsuitable for high-performance sectors like aerospace and automotive.
Additionally, firms have resorted to strategically integrating rare earth magnets into larger components such as motors or electronic modules before shipment. Since China’s export laws focus on standalone rare earth elements and magnets, assembling them into more complex parts effectively exempts them from the licensing requirement, a workaround that Chinese authorities are beginning to scrutinize more closely. In response to such tactics, the Chinese government has moved to close certain loopholes. For instance, after manufacturers began substituting holmium in place of other restricted elements, China added holmium to its export control list in October. Enforcement of this rule, however, has been postponed for one year under the terms of the Trump–Xi agreement.
Rare earth elements remain at the center of global geopolitical maneuvering because of China’s near-monopoly over their mining and processing. Although alternative processing facilities are being developed in the U.S., Australia, and parts of Europe, they remain years from full operational capacity. Until then, Beijing retains a strategic advantage that it has not hesitated to apply in broader trade disputes.
Industry stakeholders warn that the general licenses, while a welcome development, may be only a reprieve in what could be a protracted tug-of-war over critical materials. The European Union Chamber of Commerce in China welcomed the move, describing the change as bringing much-needed “stability and predictability.” Nonetheless, concerns persist over the pace of license approvals, transparency of the criteria, and the fluid definition of items deemed for "civilian use."
With supply chains gradually adjusting and compliance officers playing an increasingly central role in export decisions, both industry and governments appear to be entering a new phase marked by cautious optimism, tactical flexibility, and constant vigilance. One thing is clear: rare earths are not just a series of elements on the periodic table; they are crucial leverage tools in today’s complex matrix of trade, technology, and geopolitics.
Whether China’s streamlined export regime will evolve into a lasting framework or remain a diplomatic stopgap remains to be seen. For now, the issuance of general licenses is a pivotal, if partial, step toward stabilizing a market that the world quite literally cannot function without.