Core Viewpoint - China's recent upgrade of rare earth export controls has significantly impacted global supply chains, causing immediate reactions from countries like Japan and South Korea, as well as the United States [2][10]. Group 1: Policy Changes - On October 9, China's Ministry of Commerce announced that any product containing 0.1% rare earth elements will require a permit for export, a regulation stricter than previous measures [2][3]. - The new regulations also extend to superhard materials and rare earth equipment, effective November 8, further tightening control over the supply chain [2][3]. Group 2: Global Reactions - South Korean storage chip manufacturers are particularly affected, as their production relies heavily on Chinese rare earth materials, leading to urgent requests for leniency from the Chinese government [3][4]. - The U.S. is heavily dependent on China for rare earths, with 70% of its supply sourced from China, and the military's advanced weapon systems are also reliant on these materials [4][6]. Group 3: Strategic Implications - Rare earth elements are critical for various technologies, from smartphones to military applications, making them essential for both civilian and defense industries [6][12]. - The new regulations are seen as a strategic move by China to assert control over the global supply chain, especially in response to previous technology restrictions imposed by Western countries [10][14]. Group 4: Market Impact - Domestic companies like Zhongke Sanhuan and Jinli Permanent Magnet have seen their stock prices rise, indicating a positive market response to the new regulations [10][14]. - The shift in policy is expected to force a realignment of global supply chains, with countries scrambling to secure alternative sources and technologies [10][12].