China is reportedly planning to impose a ban on the export of technology used to make rare earth magnets due to "national security" reasons.
These 'high-performance' magnets are used in electric vehicles (EVs), wind turbines, aircraft, and other products.
With the move, China is believed to be trying to take control of the magnet supply chain as the world's reliance on electric motors increases due to decarbonisation efforts.
According to the Japan Times, China is amending the Catalogue of Technologies Prohibited and Restricted from Export, a list of technologies that face export restrictions.
In December, Beijing released the amended draft for public consultation.
In the draft, manufacturing technologies for high-performance magnets that use rare earth elements including neodymium and samarium cobalt were added to the restricted list.
The consultation period ended in January and amendments could be adopted as early as 2023.
According to estimates, China owns about 90% of the market for samarium cobalt magnets and roughly 84% of the market for neodymium magnets worldwide.
Given the US and Europe's dependence on China for the magnet technology, the ban could pose a threat to them, the publication said citing a European source.
The development comes after the US, Netherlands and Japan announced export restrictions on semiconductor technology.
Like semiconductors and storage cells, the use of high-performance magnets is expected to increase.
While Japan holds some share of the samarium cobalt and neodymium magnet market, China has been investing in facilities to produce magnets on a big scale at a low cost, which may cause Japan to lose market share in the future.
As China lags in the development of advanced semiconductors, a source in the resources sector said that "they are likely going to use rare earths as a bargaining chip since rare earths are a weak point for Japan and the US," reported Nikkei.