China introduces national rare earth magnet tracking system; new system requires exporters to list clients and sales volumes

China introduces national rare earth magnet tracking system; new system requires exporters to list clients and sales volumes

China has implemented a new national rare earth magnet tracking system, which requires exporters to list their clients and sales volumes. This move comes amid growing global concerns over the supply of rare earth magnets, a critical component in various industries, including automotive, technology, and renewable energy.

The new system, effective as of May 2025, mandates that exporters of rare earth magnets must provide detailed information about their clients and the volumes of magnets sold. This initiative is part of China's broader strategy to enhance control over its rare earth resources and maintain its dominant position in the global market.

The implementation of this tracking system coincides with China's recent export restrictions on rare earth elements, including samarium and dysprosium, as a retaliatory measure against U.S. tariffs. These restrictions have sparked alarm among global automakers, who rely heavily on these magnets for various automotive components. The Alliance for Automotive Innovation, representing major automakers like General Motors, Toyota, and Volkswagen, has expressed serious concerns over potential factory closures within weeks due to a shortage of these critical materials [1].

The U.S. and the European Union have taken steps to mitigate their dependency on China for rare earth imports. The U.S. has escalated its tech war with China by imposing new export restrictions on semiconductor design software and other critical materials, while the EU is fast-tracking mining and recycling initiatives to reduce its reliance on Chinese imports.

The new tracking system is expected to provide China with better oversight of its rare earth exports and help manage the global supply chain more effectively. However, it may also exacerbate tensions between China and its trading partners, particularly the U.S., as the latter continues to push for greater access to these critical materials.

References:
[1] https://www.benzinga.com/news/topics/25/05/45708426/chinas-rare-earth-magnet-restrictions-threaten-auto-production-could-result-in-shutdown-of-assembly-lines-report