China strengthens control to stop illegal outflow of strategic minerals

China has announced that it will strengthen control over the export of strategic minerals "every step of the way", with a particular focus on cracking down on the smuggling of these critical resources and enhancing customs inspections at ports.

All departments and local authorities should intensify the tracking of strategic mineral flows, enhance interagency information sharing and implement early warning mechanisms, in order to prevent the illegal outflow of these vital resources, according to a high-level interdepartmental meeting held on Monday.

In the wake of the implementation of curbs since December on certain strategic minerals exported to the United States, China has uncovered instances of collusion between overseas entities and illicit domestic actors seeking to circumvent regulatory measures through smuggling and other illegal means.

The tightening of regulations on strategic mineral exports is a critical imperative, as these resources are intrinsically linked to China's national security and development interests, it was emphasized at the meeting, which was led by the national export control work coordination office.

From mining and smelting to transportation, manufacturing and ultimately exporting, government agencies should work closely to ensure that each stage of the supply chain is subject to rigorous supervision and management, according to the meeting.

On Friday, the office convened another meeting to underscore the need to combat smuggling of critical resources.

A spokesperson for the Ministry of Commerce said on Monday that relevant authorities "have taken swift actions targeting fraudulent reporting, smuggling, third-country transshipments and other illegal activities aimed at circumventing China's strategic mineral export controls".

By launching an interdepartmental investigation, implementing more rigorous port inspections and uncovering the illicit networks and entities behind these schemes, China will firmly safeguard its national security, the spokesperson said, adding that more crackdowns should be expected.

In December, the ministry announced the implementation of strict controls on a range of dual-use items and chemical elements exported to the US, including gallium, germanium, antimony, superhard materials and graphite. It expanded the export control list in February to include tungsten, tellurium, bismuth, molybdenum and indium.

According to data released by the General Administration of Customs, China's exports of antimony and germanium have declined by 57 percent and 39 percent, respectively, in the first quarter compared with the same period last year.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said that illicit actors, driven by the pursuit of exorbitant profits, are not only undermining China's legal framework but also posing a substantial challenge to its implementation of the strategic mineral export control system.

Strategic minerals are of paramount importance to China's national security, and the government is making targeted efforts to combat smuggling to also safeguard the country's economic and industrial security, Zhou said.

"It is important to clarify that the measures are focused on curbing unlawful practices, such as smuggling, and not on impeding the lawful trade and utilization of these strategic mineral resources," he added.