Beijing has now stepped up its efforts to stop rare earth materials from being exported without official approval. This move is making it even harder for industries that depend on these minerals, such as car makers and defense contractors, to access them.
According to Chinese state-run media, the crackdown on illegal shipments is now a central part of Beijing’s latest strategy. It reflects China’s push to take tighter hold of the rare earth industry and use it to advance its national goals.
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Legal shipments of seven types of rare earth materials and their magnets were stopped by China on April 4. Authorities stated that companies must now obtain export licenses before sending these materials abroad.
Export Restrictions and Licensing Conditions
Only a few licenses have been granted so far. This situation has given China a stronger position in its push to get the United States and other countries to reduce tariffs and permit sales of military technology to China.
Many Western firms that used to rely on a steady supply of rare earths from China are now facing shortages faster than expected.
China’s current efforts are putting a lot of pressure on global businesses by not only blocking legal exports but also taking tough measures against illegal ones at the same time.
Smuggling History and Previous Trade Pressure
Illegal exports once weakened China’s control over its rare earth market. Between 2009 and 2013, Beijing applied temporary export limits and completely stopped shipments to Japan to increase pressure during a dispute.
Before efforts to reduce smuggling began in 2010, organized criminal networks moved nearly half of China’s yearly rare earth output out of the country illegally. These minerals were often mixed with legal supplies in international supply chains, making it hard to trace the source.
Initially, China’s attempt to stop illegal trading had a limited impact. Large global companies like Toyota and Boeing operated within long supply chains that combined both legal and smuggled materials.
But in recent years, illegal trading has become more difficult. David Abraham, who specializes in rare earths at Boise State University, noted that smuggling no longer works as easily as it used to.
Coordinated Crackdown and Government Oversight
Senior officials from different departments in China came together on May 9 to map out their strategy. Three days later, representatives from 11 national-level ministries and seven provinces also met and released a joint declaration through the Commerce Ministry.
The joint message explained that rare earth export rules are directly linked to the country’s security and development goals. It also called for full monitoring of these materials from the point of extraction to their final transport.
According to China’s Commerce Ministry, the new licensing system is meant to keep rare earths from being used in weapons and other military equipment. The United States military depends heavily on Chinese rare earth magnets to build missiles, jets, drones, tanks, and artillery systems.
