Rare earth smuggling: China's secret services strike back!

Rare earth smuggling: China's secret services strike back!

China today, July 18, 2025, released reports of smuggling of rare earth elements hidden in packages containing other products. According to Chinese state security, foreign intelligence agencies have attempted to work with domestic criminals to illegally move these raw materials out of the country. Details about the secret services involved remain unknown. State officials said the smuggling was carried out by misdeclaring packages and hiding the metals in other products. The government says it has interrupted routes for this illegal export and has repeatedly taken action against such attempts in the past. This information was conveyed in the Deutschlandfunk program, where it is reported that China mines around 70 percent of all rare earths worldwide and therefore has an almost monopoly position.

Rare earths are crucial for the production of defense equipment, computer chips, semiconductors, smartphones and electric cars. China significantly restricted exports of these valuable metals in 2024 to tighten control over these important raw materials. For this reason, prices for rare earths have also increased, which is due to the trade dispute with the USA. One of China's measures was to impose export controls on seven rare earths and magnets that are justified by civilian and military applications.

The importance of rare earths

Rare earths include 17 elements, including europium, lanthanum, neodymium and cerium. Although neodymium is more common than lead, the extraction process for these elements is both difficult and environmentally damaging. While China has the largest reserves and production capacity, there are also deposits in countries such as Russia, Canada, Brazil, Greenland, Australia, India and Vietnam. In Germany there are some deposits in Saxony, but their extraction is not possible for environmental reasons. There are also relevant deposits in Ukraine, but the competitiveness is viewed with skepticism due to the high level of investment.

In addition to export controls on rare earths, restrictions on graphite, which is important for battery production, were also introduced in October 2023. Technologies for processing lithium and its production for electric cars are now also subject to strict controls. In order to trade or cooperate economically with these technologies, companies must also provide detailed evidence of the end use of the raw materials.

The Chinese authorities underline the reasons for the introduction of export control measures and emphasize the prominent role that China plays in the global supply of rare earths. These strategic raw materials are not only important for their own economy, but also define the geopolitical tensions that have recently increased. Further information on this topic can be found in the reports from Deutschlandfunk and Time to find.