China Adds MP Materials, USA Rare Earth and 8 Other US Firms to Export Control List

China has added 10 US companies to its export control list, including rare earth producers MP Materials and USA Rare Earth and eight companies involved in military, drone, robotics and parts businesses. The move appears to be retaliation after the US Defense Department added 188 Chinese companies to its list of Chinese military companies earlier this month. The impact is expected to be limited because the US firms have little business in China.

Reuters and other foreign media reported on June 22 that China announced the addition of 10 US companies to the export control list, saying they were linked to the US military.

MP Materials, which is backed by the US Defense Department, operates the only active rare earth mine in the US. USA Rare Earth is also involved in the rare earth mining and magnet supply chain.

The companies added to the list are Oshkosh Defense, which makes military vehicles and trucks; AEVEX, a maker of motors for military aircraft; Red Cat Holdings, a military drone and solutions company; Teledyne FLIR; Insitu; Shield AI; Sierra Nevada Robotics; Volansi Aerospace and Technology; and Ironhand Algorithms.

China's Ministry of Commerce said organizations and individuals in any country or region are prohibited from transferring or supplying China-made dual-use goods to those companies. Exports must stop immediately, it added.

The measure amounts to a full ban on dual-use exports to the listed companies, tightening a previous requirement that exports receive a license.

Analysts said the move was largely symbolic, serving as a response to the Pentagon's 1260H list of technology companies suspected of supporting China's military. The US Defense Department said on June 8 that it had newly designated major Chinese technology companies including BYD, memory chipmaker CXMT, Alibaba and Baidu as Chinese military companies under Section 1260H of the National Defense Authorization Act.

George Chen of The Asia Group, a geopolitical advisory firm, said most of the newly listed companies were already tied to the US defense industry and do not operate in China, limiting the effect to a symbolic one.

In a separate notice, China's Ministry of Finance said it would also impose sanctions on 46 US companies, including Lockheed Martin, Raytheon and Boeing's defense unit. The measure would bar Chinese buyers from purchasing products made by those companies, though US-owned companies operating in China would still be allowed to buy them.

Kim Jung-a, guest reporter at Hankyung.com, kja@hankyung.com