Core Insights - China's new rare earth export regulations, effective from October 9, 2025, significantly impact the global supply chain, reflecting a shift in strategic resource management and the competitive landscape in technology [1][11] - The regulations introduce a comprehensive control system that includes not only the export of raw materials but also extends to products containing Chinese rare earth elements, with a threshold of 0.1% for controlled substances [3][11] Regulatory Framework - The new regulations feature a "full-chain penetration control" approach, covering all aspects of the rare earth industry from mining to recycling [3] - Key elements include a 0.1% content threshold focusing on critical applications like high-performance magnets and semiconductor materials, and a 45-day approval cycle affecting global supply chain timelines [3][11] Global Manufacturing Impact - Rare earth elements are essential in high-end manufacturing, with significant applications in products like the F-35 fighter jet and Tesla Model 3 [4] - China dominates the rare earth market, controlling 70% of global mining, 90% of separation processing, and 93% of permanent magnet manufacturing [4] Case Studies - ASML, the sole producer of advanced EUV lithography machines, faces potential production disruptions due to the new regulations, as its products contain 0.3% dysprosium, exceeding the new threshold [5] - The U.S. military and semiconductor industries are also at risk, with rising costs and potential delays in production schedules due to increased rare earth prices [5][6] Market Reactions - The stock market has reacted variably, with Chinese rare earth companies seeing price increases while U.S. firms like Applied Materials experienced declines, indicating a reassessment of the strategic value of rare earths [6][11] Strategic Responses - Countries are diversifying their supply chains in response to the new regulations, with the U.S. supporting domestic rare earth industries and forming partnerships with countries like Australia and Canada [8] - Companies are adjusting inventory and procurement strategies, with some exploring alternative technologies to reduce reliance on rare earths [8] Industry Evolution - China's rare earth industry is focusing on upgrading and transitioning towards high-end, circular, and clustered development, enhancing its competitive edge in advanced processing technologies [9] - The new regulations signify a shift in China's role in global governance, moving from rule adaptation to active participation in rule-making [11][12]