By Wang Xiaolei
China Rare Earth Control is entering a new phase of stricter regulation, significantly affecting the global display industry and boosting China’s competitive edge. The Ministry of Commerce consecutively issued Notices No. 61 and No. 62, expanding rare earth regulation from traditional physical items to the technical level and innovatively introducing extraterritorial jurisdiction mechanisms. Key points to note include: 1) Notice No. 61 innovatively stipulates that foreign organizations and individuals must obtain an export license from China’s Ministry of Commerce before exporting certain rare earth items to countries and regions outside China, as long as these items contain, integrate, or mix rare earth components originating from China with a value proportion of 0.1% or higher. 2) Notice No. 62 explicitly brings the entire rare earth industry chain technology under control, including rare earth mining, smelting and separation, metal refining, magnet manufacturing (SmCo, NdFeB, Ce-based magnet manufacturing technology), and technologies related to secondary rare earth resource recycling. The control covers not only the technology itself but also its carriers, such as design drawings, process parameters, and processing procedures. 3) The notices stipulate that even for non-controlled goods, technologies, or services, if the exporter knows that they will be used for or substantially contribute to overseas rare earth activities, an export license must be applied for. This principle clearly assigns due diligence obligations to enterprises, preventing them from evading regulatory responsibilities by claiming “lack of knowledge.”
Foreign countries have long been heavily dependent on China’s rare earth resources. China holds 48.4% of the world’s rare earth reserves, 92.3% of smelting and separation capacity, and approximately 90% of permanent magnet production. China is the only country in the world with a complete rare earth industry chain. Chinese rare earth resources hold extremely high strategic value and are applied in many high-tech fields, including LED, OLED, and Micro LED display technologies. As China tightens rare earth controls, the competitiveness of foreign display companies is expected to weaken.
Rare Earths Are “Irreplaceable” in Display Technologies
Rare earths collectively refer to 17 elements, including the 15 lanthanides plus scandium and yttrium. Based on atomic number and physicochemical properties, rare earths are generally divided into light rare earths and medium-to-heavy rare earths. Light rare earths include lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), promethium (Pm), samarium (Sm), and europium (Eu); medium-to-heavy rare earths include scandium (Sc), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb), lutetium (Lu), and yttrium (Y). Among them, medium-to-heavy rare earths are scarcer and more critical in high-tech applications, giving them particularly high strategic value.
| Rare Earth Element | Main Role in Displays |
|---|---|
| Europium (Eu) | Provides red emission; one of the key elements for achieving high color gamut coverage in LED displays |
| Terbium (Tb) | Mainly contributes green emission; effectively enhances color saturation and vibrancy of the screen |
| Yttrium (Y) | Commonly used in phosphors; also an important component of display luminescent materials |
| Lanthanum (La) | Used to produce high-refractive-index, low-dispersion optical glass; widely applied in smartphone lenses and screens to improve imaging quality |
| Ytterbium (Yb) | Used as a metallic cathode material in advanced OLED displays; can reduce power consumption and enhance screen resolution and color saturation |
| Scandium (Sc) | As one of the rare earth elements, it is a core material in LED displays |
| Praseodymium (Pr) | Works together with other rare earth ions for color rendering in displays |
| Gadolinium (Gd) | Used in magnets for components like speakers and microphones |
Rare earth resources are crucial in the display sector. For example, europium (Eu) is a core material for producing red phosphors, essential for LCD backlight modules and high-end lighting. Terbium (Tb) is a key component of green phosphors, directly determining color reproduction (NTSC). Yttrium (Y) is used as a dopant in red OLED phosphors, directly affecting screen color gamut and brightness. Lanthanum (La)-based polishing slurry is used for atomic-level flatness processing of glass substrates (roughness <0.1 nm) with no substitute. Neodymium (Nd) magnets control the positioning accuracy of panel-handling robotic arms (error <3 μm), affecting the success rate of massive Micro LED transfers.
Currently, China implements a total rare earth mining quota management system. In 2025, the growth of mining quotas is limited to 5.88%, with zero growth in medium-to-heavy rare earth quotas for five consecutive years. Rare earths are indispensable in the display sector, and stricter control by China will affect display companies in many other countries.
Upgraded Rare Earth Controls May Reshape the Display Industry Power Map
At present, China firmly dominates the LCD and LED markets, while the OLED sector is still catching up to South Korea. South Korea is heavily reliant on rare earth imports, and China’s tightened controls will limit its R&D and mass production capabilities in OLED and iLED fields. In addition to South Korea, other countries of interest include Japan and the United States. The U.S. dependence on Chinese rare earths is structural and multi-layered, particularly in high-end applications, with reliance exceeding 80%. This dependence spans not only raw material imports but also smelting and separation technology, industry chain support, and strategic resource reserves. Japan’s reliance shows a dual characteristic of “deep binding in high-tech industries + vulnerability of strategic reserves,” with 63% of its rare earth imports from China; among them, medium-to-heavy rare earths (Tb, Dy) depend 91% on imports, and phosphor materials (Eu/Y) depend 78% on imports.
| Country/Region | Reserve Share (%) | Resource Characteristics | Major Mines |
|---|---|---|---|
| China | 48.4 | Full range of light and heavy rare earths | Bayan Obo Mine (light rare earths), Ion-adsorption rare earth deposits (heavy rare earths) |
| USA | ~1.2 | Mainly light rare earths | Mountain Pass |
| Australia | ~2.8 | Mainly light rare earths | Mount Weld |
| Myanmar | Not disclosed | Mainly medium and heavy rare earths | Multiple ion-adsorption rare earth deposits |
Global distribution of major rare earth-producing countries.
In response, countries like the U.S. and Japan are exploring rare-earth-rich polymetallic nodules in the ocean for deep-sea mining, though the difficulty is considerable. Japan also leads in rare earth recycling—for example, Panasonic extracts Nd from discarded hard drives with a recovery rate over 95% (aiming to cover 30% of demand by 2030).
Nevertheless, in the short term, these countries cannot achieve “elimination of import dependence” or “complete rare earth substitution.” The global display sector is currently in a technological transformation window, and China, with absolute advantages, is expected to accelerate the development of OLED, Micro LED, and other frontier display technologies. Through technological leapfrogging, China may reshape the global display landscape.
Conclusion
China’s rare earth resources have risen to become a key international competitive asset. Empowered by this, Chinese display companies are entering an unprecedented phase of opportunity. The next steps are to accelerate technological R&D and innovation breakthroughs, striving to seize the global display industry’s strategic high ground.