China accuses foreign spies of rare earth theft

China’s Ministry of State Security (MSS) has accused overseas intelligence agencies of orchestrating the theft and smuggling of controlled rare earth materials, underscoring Beijing’s determination to crack down on illicit trade of these strategic resources. The allegations come as China agrees to review export applications for rare earths following recent trade negotiations with the United States.

In a statement published on its official WeChat account on July 18, the MSS did not name specific countries but warned that foreign espionage agencies and their collaborators have attempted to steal rare earth-related items through mail delivery and other covert methods, posing “a serious danger” to China’s national security, Caliber.Az reports, citing foreign media.

Rare earth elements and magnets—critical components used in electric vehicles, electronics, and advanced technologies—have long been considered a strategic asset by Beijing. China controls the vast majority of global production and has previously leveraged this dominance as a bargaining chip during trade disputes, particularly with the U.S.

During the recent trade tensions, Beijing imposed stricter export controls on rare earths, leading to disruptions such as Ford Motor Co.’s decision to reduce output at one of its plants due to supply constraints. The export curbs also heightened friction with the European Union, which similarly depends heavily on Chinese rare earth exports.

The MSS detailed a foiled attempt by an unnamed foreign country to illicitly accumulate rare earth materials through deceptive practices. According to the ministry, a contractor attempted to evade customs scrutiny by mislabeling parcels as “not originally made in China” and falsifying product content declarations.

Other smuggling tactics cited include concealing rare earth powders within ceramic tile ingredients and disguising them inside water bottles marked as “machinery parts” for export. The ministry called on citizens to report any suspicious activities related to rare earth resources to help combat smuggling.

Last month, China and the U.S. reached an agreement to suspend some of the harshest tariffs imposed during their ongoing trade war. Beijing promised to expedite the processing of export licenses for rare earths, while Washington agreed to lift certain technology restrictions, including on advanced AI chips.

By Vugar Khalilov