Beijing has just tightened your control over one of its most valuable assets: strategic minerals that feed chips, electrical networks and satellites. A spokesman for the Ministry of Commerce assured that smuggling will be pursued without concessions.
The Asian giant redoubles the pressure. China does not stay in the ads of a firm policy: it has launched an operation that, as they say, already yields concrete results. During the last two months, multiple cases of illegal exports have been investigated, with arrests of involved and a “strong deterrence,” says CGTN.
A key meeting of July 19 at Nanning – with the presence of the Ministry of Commerce, Public Security, Customs, Attorney General’s Office and other agencies – served as an intermediate point after the operation initiated in May. In that meeting it was agreed:
- Establish a Joint Coordination Center for Export Application and Control of Double Use Articles.
- Publish exemplary judicial cases and expand the list of foreign entities subject to controls.
- Issue compliance guides for exporters, with emphasis on avoiding deviations to military purposes.
Why these minerals matter so much. Strategic minerals – including rare earths such as neodymium, prseodimium and disposium – are essential for high -tech industries: computer chips, electric vehicle batteries, wind turbines, satellites and military equipment. China controls about 60% of the refined world production, which gives it a critical position in the global supply chains.
Having this domain allows Beijing to influence key markets and exert economic pressure on international tension contexts. In addition, the refining of these matters requires advanced technology and complex chemical processes, which raises entry barriers to other countries.
The threat: smuggling and technological leaks. Beijing’s message is not limited to economic damage. The Ministry of Commerce warned about an added risk: mineral smuggling can facilitate technological filtration towards foreign actors, including those linked to the military. It is feared that certain materials end up in defense applications without going through adequate controls, thus avoiding the official export mechanisms.
The authorities claim to have detected sophisticated attempts to overcome the rules: false documentation, transfers through third countries, and fragmentation of cargoes to reduce customs scrutiny. The technical complexity of these schemes forces constant surveillance, according to He Yadong himself.
It is not the first time that this is tried to stop. Frenting the smuggling of strategic products is not new, and it is rarely simple. The restrictions imposed by the United States on advanced chips and NVIDIA GPUS offer a clear example: despite the formal prohibition of exporting models such as A100 or H100 to China, recent analysis indicate that these components continue to reach the country through opaque networks and triangulations with third countries.
A movement with geopolitical echoes. The decision to harden control over strategic minerals cannot be understood outside the pulse between powers. While the United States multiplies controls on chips, AI and sensitive exports, China counterattacks in one of the few lands where it has a margin of real maneuver: that of critical raw materials.
The country is responsible for more than 85% of the global refining of rare earths, and has begun to use that position as a pressure tool. He already demonstrated it in 2023 with the imposition of licenses to export Galio and Germanio, two essential minerals for advanced electronics and defense.
This new turn hardens its position and is interpreted as a response to the western fence. It is not a total closure, but a reminder that who controls the materials, controls a part of the game.
Will these measures work? What is not clear is whether these measures will be effective in the long term. Smuggling networks usually adapt rapidly, especially when there are global interests at stake and high economic benefits. Nor do we know if these decisions will affect prices, the international supply or the negotiating position of China in future technological disputes.
Images | Alejandro Luengo | Craig Thomas
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