China Signals Rare Earth Supply Relief After U.S. Concerns

China has agreed to address United States concerns over shortages of critical rare earth minerals, according to a White House statement issued after last week’s leaders summit in Beijing. However, the agreement stopped short of calling for the removal of export restrictions that continue to affect key American industries, including aerospace and semiconductor manufacturing.

The restrictions were first introduced by Beijing in April 2025 in response to U.S. President Donald Trump’s “Liberation Day” tariffs. Since then, China has maintained tight controls on exports of several critical minerals and related processing technologies.

White House Acknowledges China’s Export Controls

In a fact sheet released on Sunday, the White House said China would address U.S. concerns regarding shortages of rare earth materials and critical minerals such as yttrium, scandium and indium.

The statement also referred to concerns over restrictions on rare earth processing technology, an area where China maintains significant dominance in global production and supply chains.

Notably, the latest White House summary appeared to acknowledge that China’s export control framework will remain in place. Earlier commitments made during the Busan summit last October had stated that China would “effectively eliminate” existing and proposed export controls on critical minerals.

Six months later, there was no indication that those broader restrictions would be fully removed. The White House also did not clarify whether the one-year truce covering a wider range of Chinese rare earth restrictions, due to expire in November, would be extended.

Meanwhile, China’s Ministry of Commerce did not mention rare earths in its own summit summary released on Saturday.

Sensitive Industries Continue To Face Delays

Although export licences have reportedly been issued for sectors such as automotive manufacturing and consumer electronics, companies operating in sensitive sectors linked to military applications continue to face delays.

Ongoing shortages of yttrium and scandium have already disrupted sections of U.S. industry. Yttrium is used in heat-resistant coatings for aircraft engines, while scandium is important for semiconductor manufacturing.

Several affected companies have reportedly urged Washington to intervene directly with Beijing over the supply constraints.

Cory Combs, associate director at research firm Trivium China, said the differing public statements from both governments were manageable because both sides appeared focused on maintaining stability.

He noted that both countries had successfully conveyed a message of stability to their domestic audiences despite unresolved differences over critical mineral controls.

Indium Emerges As Key Semiconductor Concern

One of the most significant additions in the White House statement was indium, a critical mineral used extensively in semiconductor and optical communication technologies.

China placed indium on its export control list in February 2025. Since then, exports have dropped sharply. Customs data showed global shipments declined by roughly two-thirds over the past 14 months, while exports to the United States fell by 77 per cent.

Indium phosphide plays an important role in manufacturing next-generation photonic chips, which process data using light instead of electricity. The material is also essential for optical lasers used in fibre-optic systems and future 6G communication networks.

Another compound, indium tin oxide, is widely used in LED displays and consumer electronics products.

Manufacturers such as Coherent are increasing production of photonic chips as demand grows from artificial intelligence data centres worldwide. The company reportedly controls around 40 per cent of the global market for indium phosphide optical components.

Paul Triolo, partner and China technology policy lead at DGA-Albright Stonebridge Group, warned that prolonged delays in Chinese export licensing could create supply allocation problems, increase costs and slow production expansion for companies dependent on indium-based technologies.

With inputs from Reuters