[By Guancha Observer Network, Shao Yun]

On May 9th, the Office of the National Export Control Coordination Mechanism organized a meeting involving different departments to launch an operation against illegal export smuggling of strategic minerals, attracting international media attention.

The Hong Kong-based English-language newspaper South China Morning Post reported on May 9th that analysts believe this move by China is aimed at strengthening the enforcement of a series of previous export control measures targeting key minerals crucial for the U.S. defense industry. Some American media outlets noted that this occurred just one day before high-level trade talks between China and the U.S. in Switzerland, adding significance to the timing.

Previously, in December last year, the Ministry of Commerce announced strict controls on the export of gallium, germanium, antimony, ultra-hard materials, graphite, and other dual-use items to the United States. The South China Morning Post reported that this move put pressure on the supply chain of high-tech hardware in the U.S. In February this year, the Ministry of Commerce added five more metals and their related items - tungsten, tellurium, bismuth, molybdenum, and indium - to the export control list; tungsten can be used to manufacture ammunition.

If an item is listed under restrictions, exporters must apply for permission according to relevant regulations from the State Council's commerce authority. According to data from the General Administration of Customs cited by the South China Morning Post, in the first quarter of 2025, exports of critical minerals such as antimony and germanium fell by 57% and 39%, respectively, compared to the same period last year.

However, according to the message released on the Ministry of Commerce website on the same day, the meeting emphasized that since China implemented export controls on strategic minerals such as gallium, germanium, antimony, tungsten, and heavy rare earth elements, some overseas entities have colluded with domestic lawbreakers to continuously innovate smuggling methods to evade detection.

"To prevent illegal outflow of strategic minerals, curb smuggling trends, safeguard national security, promote compliant trade, and ensure stable production and supply chains, combating the smuggling of strategic mineral exports has become an urgent and important task," the Ministry of Commerce statement read.

For example, antimony is crucial for the production of munitions, communication equipment, night vision devices, etc., for the U.S. military. U.S. Metals Technology News Network

Rajiv Biswas, CEO of Asia-Pacific Economics, a Singapore-based economic research firm, analyzed on May 9th for the South China Morning Post that this deployment of special actions by China to combat smuggling of strategic minerals indicates that China plans to further strengthen the enforcement of recent restrictions on a series of key minerals vital to the U.S. defense industry.

The Ministry of Commerce's notice also mentioned that the meeting emphasized focusing on typical evasion methods such as misrepresentation, concealment, hidden smuggling, and "third-country" transshipment to crack down on smuggling of strategic minerals. According to Biswas, international experience with export sanctions shows that companies often use "third-country" transshipment to circumvent sanctions, which is also a risk factor for China.

The Wall Street Journal noted on May 9th that the announcement by China to crack down on the smuggling of key minerals came just one day before the high-level economic and trade negotiations between China and the U.S. in Switzerland, speculating that this new measure by China might influence the dynamics in the talks.

The Wall Street Journal mentioned that previous times when China strengthened its export controls on key minerals and related technologies were all after the U.S. imposed trade restrictions on China.

For instance, last December, after the Biden administration expanded chip export controls on China, China announced strict controls on the export of relevant dual-use items to the U.S. In April, the newly established Trump administration intensified tariffs on all Chinese products exported to the U.S. Following this, China issued an announcement implementing export control measures on seven categories of medium and heavy rare earth-related items: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

The Wall Street Journal pointed out on May 9th that although the U.S. government has taken measures to reduce dependence on China, including building new facilities for rare earth processing and magnet manufacturing, progress has been slow, and the U.S. remains highly dependent on China for rare earth supplies. The report noted that the recent push by the Trump administration to expand access to key minerals in places like Ukraine and Greenland further highlights this point.

According to statistics from The Economist magazine, among 13 minerals used in military industries, China accounts for more than 50% of the production of eight of them, including gallium, germanium, antimony, tungsten, vanadium, rare earths, indium, and titanium. A study released by the U.S. Geological Survey (USGS) in November last year pointed out that if China completely bans the export of gallium and germanium, it could reduce the U.S. GDP by $3.4 billion.

Production of 13 critical war minerals in 2023, with China supplying more than 50% of the output for 8 of them. Observation Network chart

"Even losing access to these minerals, which account for only a small portion of product value, could cause significant damage to the entire U.S. economy," warned Nedal Nassar, the main author of the report, in a statement.

With the rise of unilateralism and protectionism in recent years, normal economic and trade cooperation between China and the U.S. has been severely disrupted, and there are signs of spillover risks. Last month, some South Korean media reported that some Korean companies received a "warning" from China, urging them not to export products containing Chinese rare earths to U.S. defense enterprises. Although the South Korean government responded at the time that it had not confirmed any Korean company receiving the official document mentioned in the report, this news still sparked discussions in South Korea. Some voices expressed concern that if future trade friction between China and the U.S. intensifies, South Korea, caught in the middle, may suffer losses.

Regarding China's export control policies, on April 4th, the spokesperson for the Ministry of Commerce replied to reporters' questions by stating that the Chinese government legally implements export controls on relevant items to better maintain national security and interests and fulfill international obligations such as non-proliferation. These items have dual-use attributes, and their export controls are common practices internationally.

The spokesperson said that as a responsible major country, listing relevant items reflects China's consistent stance of firmly maintaining world peace and regional stability. China is willing to strengthen exchanges and cooperation through bilateral export control dialogue mechanisms to promote compliant trade.

This article is an exclusive piece by the Guancha Observer Network and cannot be reprinted without authorization.

Original source: https://www.toutiao.com/article/7502469736534491659/

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