China warns of foreign espionage targeting rare earth smuggling

(ECNS) -- China's Ministry of State Security on Friday warned foreign intelligence agencies of attempting to smuggle rare earth materials by recruiting domestic operatives and exploiting shipping channels, warning that such efforts pose serious threats to national security.

The ministry also said that one unnamed country, lacking the ability to purify rare metals on its own, has been stockpiling them through various means to bolster its domestic supply.

A major contractor in a key sector of that country has been involved in illicit activities.

The ministry said the country has used two main tactics: repackaging and relabeling rare metals to falsely claim they are "not of Chinese origin" before re-exporting them, and smuggling export-controlled items such as rare earths by underreporting content levels, falsifying product names, sending multiple small shipments via express delivery, and altering transportation routes.

Investigations have revealed that foreign espionage and intelligence agencies, along with their agents, have attempted to instruct domestic criminals to smuggle rare earth materials out of the country by concealing their composition and exploiting China's delivery and shipping channels.

Tactics include falsely declaring rare-earth elements as non-controlled items or forging technical specifications and component data, such as declaring high-purity rare earths (like dysprosium and terbium) as low-value products (such as ferroalloys or nickel powder), or mislabeling them as common goods such as "solder paste" or "refractory materials" to evade export controls.

These foreign agents and their proxies have attempted to hide undeclared rare-earth materials within other legally declared cargo or transport equipment. For example, they processed raw rare-earth materials into intermediate products, mixed rare-earth powders into ceramic tile materials, or concealed them inside plastic mannequins or bottled water.

These items were then smuggled out under vague labels including "alloy parts" or "mechanical components" to bypass export regulations, the ministry said.

It has worked with related departments to conduct joint operations to intercept illegal export of rare-earth materials.

The ministry urged the public to promptly report any suspicious activities endangering China's critical mineral resource security.

(By Zhang Dongfang)