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China’s Ministry of State Security on Thursday issued an article warning of foreign espionage agencies targeting China’s rare-earth industry, engaging in theft and sabotage, posing threat to the country’s natural resource security. Authorities vowed to crack down on illegal activities to protect national security and promote the sustainable development in the industry. 

Rare earths, also known as “industrial gold,” are important strategic mineral resources that are nonrenewable. China has abundant rare-earth resources, with reserves ranking first in the world.

As an important global supplier of rare earths, China accounts for around 30 percent of the world’s rare-earth resources and over 90 percent of global market supply. The domestic rare-earth industry not only has abundant resources, but also has the advantages related to advanced mining, smelting, and separation technologies, as well as a complete industrial system, standing at a leading position in the industry, said the ministry. 

However, for a long time, foreign intelligence agencies have closely monitored insider information of the country’s rare-earth industry and have carried out espionage activities, according to the security authority.

In one case, the national security authorities have discovered that a foreign company was using its operations in China as a cover to establish relationships within the rare-earth industry in China, by using emotional manipulation and financial incentives to gather intelligence such as extraction, processing, and trade, the ministry said.

During recent years, certain Western countries have used the media to slander and accuse Chinese rare-earth companies operating overseas of causing serious environmental damage, creating a justification for long-arm jurisdiction, and using administrative measures to sanction Chinese companies. They also actively recruit rare-earth industry-related technical talent to seize the core technology, the ministry noted.

Some overseas institutions use legal cover to illegally recruit a large number of Chinese technical experts through a third country, to transfer the rare-earth mining, separation and other export control technologies and industrial chains. The situation of core technology leakage in related fields remains severe, the ministry said.

In January, the ministry also released a comic on its WeChat account emphasizing the importance of protecting key mineral resources for national security, and the espionage activities have been involved in the global competition for rare-earth minerals.

China has stressed a focus on the high-quality development of the rare-earth industry, with measures strengthened to govern rare-earth exports. 

However, some individuals in China have been lured by the foreign companies and driven by their own interests to engage in illegal activities such as rare-earth smuggling.

Some overseas companies with ties to a certain government and military forces are enticing Chinese nationals to smuggle controlled rare-earth items by offering large orders as bait. These companies are also engaging in trade with sanctioned entities. The illegal export and misuse of rare-earth items pose a threat to national security, the ministry said.

Global Times