China, the world's dominant producer and exporter of lithium batteries, is entering a new phase of strategic realignment. On October 9, 2025, the Ministry of Commerce (MOFCOM) and the General Administration of Customs (GACC) jointly issued Announcement No. 58, signifying a major upgrade to the nation's export control framework. This new regulation targets lithium batteries, cathode materials, and graphite anode materials, and is set to take effect on November 8, 2025.
This move follows closely on the heels of China's July 2025 decision to add battery cathode material preparation technologies to its Catalog of Technologies Prohibited or Restricted from Export. Collectively, these actions signal a tightening grip over critical new energy technologies—reshaping international trade flows and compelling both domestic and international players to reassess their strategies.
The latest export control framework zeroes in on high-tech segments of the lithium battery supply chain. It encompasses not just finished products but also advanced manufacturing equipment and proprietary production technologies. Controlled items include high-energy-density rechargeable lithium-ion batteries (≥300Wh/kg), key production machinery (such as winding, stacking, and formation systems), and critical materials like LiFePO₄ (LFP), nickel-cobalt-manganese precursors, and artificial graphite anodes.
By broadening its scope to cover materials, equipment, and processes, China is effectively building a protective barrier around its most valuable intellectual property and industrial know-how—particularly in areas where it commands the global market.
According to the Ministry of Commerce, this initiative is grounded in national security concerns and international compliance obligations. Lithium batteries and graphite materials possess clear dual-use characteristics, meaning they have both civilian and military applications.
Beijing's official position stresses that the policy aligns with global best practices and international non-proliferation frameworks. The stated aim is not to single out specific countries, but to balance national interests, supply chain stability, and international cooperation.
China has also indicated openness to dialogue through bilateral export control mechanisms, seeking to promote transparency, facilitate compliant trade, and ensure legitimate exports proceed without disruption.
Under the new rules, exporters must obtain licenses from MOFCOM before shipping any controlled items. Companies are now responsible for ensuring the authenticity and traceability of their exported goods and must clearly declare whether products fall under export control categories in their customs documentation.
Even items close to regulated parameters—for instance, batteries or graphite materials with specifications just below the control threshold—require additional documentation to verify their non-controlled status.
These heightened requirements are pushing Chinese firms to build more robust internal compliance and classification systems, ensuring accurate identification of export items and full adherence to legal procedures.
Statistics underscore China's central role in the global lithium battery supply chain. Between January and August 2025, China exported 3.003 billion lithium-ion batteries, valued at $48.3 billion, representing year-over-year growth of 18.66% and 25.79%, respectively.
Europe remains the largest export destination, accounting for over 41% of the total export value, followed by the United States (16.8%) and Southeast Asia (9.7%). Notably, Germany surpassed the U.S. as China's top export market, importing a record $9.15 billion worth of batteries in the first eight months of 2025—a 30.6% year-on-year increase.
China's key production hubs—notably Guangdong, Fujian, and Jiangsu—collectively account for nearly two-thirds of national lithium battery exports. Meanwhile, emerging provinces like Hubei, Hunan, and Guangxi are rapidly scaling up, posting export growth rates exceeding 80%.
Data from the China Energy Storage Alliance (CESA) shows that global energy storage cell shipments reached 246.4 GWh in the first half of 2025, up 115% year-on-year. Remarkably, Chinese companies accounted for over 93% of this total.
Overseas shipments by Chinese manufacturers hit 111.5 GWh, constituting 45% of their total output. Europe leads in overseas capacity expansion, followed by the U.S., Africa (notably Morocco), and Southeast Asia.
These figures highlight China's unshakable dominance in the global lithium battery sector, making its policy decisions critical for global supply chain resilience and cost structures.
The export control policy marks a strategic transition for China's lithium battery sector—shifting from rapid, unrestrained global expansion toward controlled, innovation-driven growth.
By restricting the outflow of advanced technologies and materials, Beijing aims to protect its core competitiveness, foster technological upgrades, and ensure long-term energy security. Simultaneously, these controls are likely to encourage Chinese companies to accelerate overseas manufacturing—localizing production in key markets to bypass regulatory hurdles while maintaining their global footprint.
This policy shift could also push international partners to deepen collaborations with Chinese firms, particularly in joint R&D, compliance management, and supply chain diversification.
While export restrictions may temporarily tighten global supply and raise costs for downstream industries (including EVs, energy storage, and electronics), they also create strategic opportunities for China's domestic players.
Higher Industry Standards: The new policy will phase out low-quality, low-margin exports, favoring companies with advanced technologies and robust compliance systems.
Innovation Acceleration: Firms will be incentivized to invest more heavily in next-generation energy storage technologies—such as sodium-ion, solid-state, and high-nickel chemistries.
Global Brand Building: As competition intensifies, companies will seek to enhance brand credibility and expand localized service capabilities abroad.
In the long run, this restructuring could strengthen China's role as the anchor of the global energy transition, while driving the industry toward greater transparency, sustainability, and resilience.
China's upgraded export control framework represents far more than a regulatory adjustment—it is a strategic pivot shaping the future of the global clean energy supply chain.
For international stakeholders, this policy signals a new era of cooperative competition, where success depends on navigating compliance, fostering trust, and building value-driven partnerships with Chinese innovators.
For China, it is a decisive step toward securing technological sovereignty, driving innovation-led growth, and solidifying its leadership in the world's most critical energy transition industry.
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