Police, customs officials and spies are reinforcing China’s embargo on the critical minerals that it overwhelmingly controls.
The Chinese government has begun an intensive campaign to prevent rare earths from leaving the country without Beijing’s permission, a step that is making shortages even more severe for these minerals, which are crucial to automakers, military contractors and many other businesses.
The anti-smuggling campaign, which Chinese state media described this week, is a cornerstone of Beijing’s move this spring to assert tighter control over the rare earth industry as a tool in Chinese statecraft.
Beijing halted legal exports on April 4 of seven kinds of rare earths and magnets made from them. Beijing said that any further shipments of these rare earths and magnets, which are processed almost entirely in China, would require export licenses.
Few licenses have been issued, as Beijing exerts pressure on the United States and others to lower tariffs on Chinese goods and to allow the sale of sensitive military technology to China.
Many companies in the United States, Europe and elsewhere have long depended on China for rare earth metals and now find themselves fast running out of supplies.
China’s anti-smuggling push amounts to a double whammy for these businesses: Beijing has halted legal exports and is cracking down very hard on illegal exports at the same time.