Before you read this article, try hard to click on "Attention", which is both convenient for you to discuss and share, but can bring you a different sense of participation, thank you for your support!
Publisher: Painting Elliot
China's Ministry of Commerce suddenly issued Announcement No. 61 of 2025 to implement export controls on some overseas rare earths related items containing China ingredients. Except for the control rules, the annexes are in wps format, and the application documents must be in Chinese.
Focusing on the later sentence, attachments subsequently delivered to business must use Chinese and Chinese software WPS.
Preliminary
On October 23, 2025, the Ministry of Commerce of China released No. 61 2025 Announcement, a document for the export approval of rare-earth-related items, which triggered a global supply chain shock with seemingly subtle requirements.
All export application annexes must meet three elements at the same time: using the Chinese format (WPS), using the Chinese language (Chinese), and submitting through the Chinese platform (eCIQ system).
This requirement breaks the long-standing default convention of "English + PDF + Microsoft ecosystem" in the global supply chain, and promotes language and file format to the hard threshold for export approval.
From the policy details, the impact of the new regulation far exceeds the submission of the document itself.WPS format template has been embedded in the latest version of the "rare-earth product classification", "recyclable impurities limit" and other Chinese national standards, the system will automatically verify whether the declaration content complies with the standard, which is equivalent to the implementation of Chinese technical specifications into the supply chain process through the document format.
The key management of the eCIQ system has implemented the homologation of the entire process by national tracking, replacing the overseas data system that was previously partly dependent on the link.
The Department of Commerce, in its policy interpretation, only described the move as “optimising the efficiency of approvals and normalizing the declaration process,” but the outside world widely viewed it as a targeted response to the new regulations on U.S. sanctions in September.
The direct background of the introduction of this policy is the continuous upgrading of U.S. technology and resource control over China. On September 15, 2025, the Trump administration promulgated the "New Regulations on Export Control of Advanced Technology and Key Minerals to China", which included chip equipment below 14 nanometers and 20 strategic minerals into strict controls, and set up "secondary sanctions". The clause attempts to block third-party cooperation channels.
On September 29, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) further penetrated the "entity list" to the subsidiary level, trying to cut off the upstream and downstream collaboration networks of China companies.
In this context, the Ministry of Commerce's new regulations on the use of Chinese have become a counter-measure in the supply chain field, competing for dominance of the industrial chain through standard reshaping.
U.S. companies are in trouble of losing orders
Before the new rules were implemented by the Department of Commerce, U.S. sanctions had begun to show clear anti-phasophageal effects, with multiple industries experiencing a double drop in orders and revenue.
In the semiconductor field, the U.S. Appliance Materials Company's third-quarter income report for 2025 showed that its revenue in China fell from $2.8 billion to $1.4 billion in the same period last year, mainly due to the acceleration of companies such as China Core International to the Dutch ASML and South Korea to purchase Samsung equipment.
Data from the American Semiconductor Industry Association (SIA) shows that the market share of American semiconductor companies in China has dropped below 10% from 18% in 2023, while China's local company Changjiang Storage has achieved mass production of 232-layer 3D NAND flash memory, directly replacing similar products from Micron Technology.
U.S. Liquid Natural Gas (LNG) has lost its market share in China to zero due to sanctions restrictions and price advantage, while Russia’s gas supply to China through the China-Russia Eastern Line pipeline has reached 380 billion cubic meters annually, equivalent to replacing 60% of U.S. LNG potential imports.
In terms of agriculture, the proportion of U.S. soybean imports in China has dropped sharply from 34% in 2017 to 15% in 2025. China buyers have shifted a large number of orders to Brazil, Russia and the local alternative source-the "Soybean Corridor" of the Inner Mongolia grassland and the annual output of the China-Russia cross-border agricultural pilot zone has exceeded 5 million tons, basically filling the gap after the withdrawal of U.S. soybeans.
After the implementation of the Ministry of Commerce's new Chinese regulations, the plight of American companies has further intensified. As of October 20, the backlog of export licenses to China pending approval by the U.S. Department of Commerce has reached more than 2400, covering chips, industrial software, laser equipment and other fields, with a value of approximately US$37 billion.
These companies not only face delays in approval from the U.S. government, but also need to urgently adapt to China's Chinese declaration system. Twenty-six American giants, including Amazon AWS, ExxonMobil, and Oracle Bone Inscriptions, urgently established an "emergency alliance" to lobby Congress to suspend the new regulations in September. The word "irreversible switch" frequently appeared in the lobbying documents they submitted, worrying about the Chinese market Once the replacement is completed, there will be no turning back.
Wall Street’s calculations are even harsher: If the double barrier to approval and Chinese adaptation is not broken by November 15, U.S. semiconductor equipment vendors’ revenue in China in 2026 will fall by 42 percent, losing about $24 billion.
However, China's domestic alternatives are accelerating, and key equipment such as ion implanters and magnetron sputtering stations has entered the verification stage. The EDA cloud platform will be completed for commercial use by the second quarter of 2026 at the latest, leaving an adaptation window for American companies. Only 120 days are left.
The wave of "interface changing" driven by Chinese
In the face of the double role of sanctions and new rules, the global supply chain is experiencing a wave of restructuring characterized by "Chinese-driven", and European, Japanese and South Korean enterprises are the first to adapt to the new rules, forming a marked differentiation from American enterprises.
Germany’s largest magnetic material producer, VAC Group, has urgently recruited three Chinese graduates at its Munich headquarters to convert all product specifications and declaration materials into Chinese, and to purchase 100 sets of WPS-compatible WPS enterprise editions.
The person in charge of the company's China region said that although the adaptation cost has increased, these investments are "completely necessary" compared with losing 52% of the global permanent magnet market.
Japanese and South Korean companies responded more quickly. As the world's third largest semiconductor equipment manufacturer, Tokyo Electronics organized a team overnight to change the instructions for all equipment exported to China into bilingual versions, and developed an automatic filling tool for WPS templates to ensure that declaration efficiency was not affected.
South Korea's Pohang Steel directly signed a corporate cooperation agreement with Jinshan Office to deploy a Chinese office system for all its subsidiaries in China. At the same time, it changed the settlement currency for rare earth purchases from US dollars to RMB, and completed cross-border payments through the CIPS system, bypassing US dollar settlement channels.
China's domestic enterprise's "destroy" alternative process has accelerated synchronously, forming a complete closed circle from technology research and development to supply chain layout.Huawei has established a completely "go-to-US supply chain", its self-developed IGBT chips have replaced German Infineon products, and its market share in the new energy vehicle sector has risen to 27%.
By vertical integration, Biady has achieved the domestication of the entire chain of lithium mining to battery packaging, the core materials and production equipment of its blade batteries have no U.S. technical components, and in the third quarter of 2025 the global installation volume exceeded Tesla in the first place.
Policy-level support makes the restructuring more resilient.The new edition of the Catalogue of Encouraging Imported Technologies and Products for 2023 has removed 127 U.S. technologies, opening room for alternative products.
In the financial sector, the RMB Cross-Border Payment System (CIPS) has covered 180 countries and regions, and its use in bulk commodity trade will increase from 12% in 2023 to 28% in 2025.
On the resource side, China's development project of Simandou Iron Mine in Guinea has entered the mass production stage, gradually breaking the Australian iron ore monopoly and further reducing the supply chain's dependence on the United States. This reconstruction is not a simple "decoupling", but a "re-hook" through standard replacement to form a new industrial chain collaboration system.
The risk of marginalization of U.S. nodes
Supply chain restructuring is driving a profound shift in the global industrial landscape, and U.S. companies are at risk of being marginalized in a number of key areas.
In the semiconductor industry chain, the equipment and material links originally occupied by U.S. enterprises are being divided by Chinese, European and South Korean enterprises - China's northern Chinese-based gravure engraving machine has entered the international production line of the core, the Dutch ASML by adjusting the technical parameters to circumvent U.S. restrictions, continues to supply intermediate equipment to China, while the market share of U.S. application materials and pan-forest semiconductors continues to shrink.
SIA predicts that if the current trend continues, the U.S. semiconductor industry will lose 12% of global market share, directly affecting 400,000 jobs.
In the manufacturing sector, the U.S."industrial return" strategy suffered setbacks due to supply chain rupture. Tesla's Texas super factory has suspended the expansion plan of its 4680 battery production line due to its inability to obtain high-purity nickel and cobalt raw materials from China. The localization rate of its Shanghai factory has exceeded 95%, achieving cost reductions and production capacity improvements through China's supply chain, in sharp contrast.
Ford and Ford's co-operative plant construction projects were also forced to reduce the scale of investment due to technical authorization restrictions, leading to the further expansion of the U.S. domestic lithium battery production capacity gap, the self-sufficiency rate in 2025 will reach only 19%.
In contrast, countries that actively adapt to China's supply chain rules have gained more market opportunities. Through energy and agricultural cooperation, Russia's trade volume with China will increase by 287% year-on-year in 2025.
ASEAN countries undertake the transfer of production capacity from China in the field of electronic components. Vietnam's mobile phone camera module production already accounts for 20% of the world. These products are assembled through China's supply chain and then exported to the world.
The European Union and China's cooperation in the processing of rare earth is also deepening, the German BASF Group has invested in the construction of the rare earth separation plant in Guangdong has been put into production, products directly supplied to European new energy vehicle enterprises, completely bypassing U.S. technological restrictions.
conclusion
Behind this pattern change is China's irreplaceability in the global supply chain. 38% of the world's rare earths, 52% of permanent magnets, and 60% of wind turbine final assembly plants are concentrated in China, forming a complete industrial ecology from resource extraction to terminal manufacturing.
To enter these markets, enterprises in any country must adapt to China's technical standards and process specifications. Due to the personnel vacuum within the U.S. Department of Commerce, the approval machine will be "down" until at least February 2026, which has caused U.S. companies to miss the critical window period to adapt to the new rules and further accelerated their marginalization process in the global supply chain.