On June 24, according to a report by Asahi Shimbun, two Japanese nationals working at a Japanese electronics company's Chinese branch were detained by Chinese authorities in late May on suspicion of attempting to export rare earth products outside of China.
Starting January 2026, China tightened its export controls on rare earths to Japan. Exports of heavy rare earths, including dysprosium and terbium, to Japan have already dropped to zero, and total rare earth exports to Japan in March and April saw a year-on-year decline of over 80%. Media analysis suggests this move is primarily aimed at countering Japan’s erroneous statements regarding Taiwan, supporting U.S. efforts to restrict China’s semiconductor industry development, and curbing Japan’s ambitions toward "re-militarization."
This case marks a landmark enforcement action in China’s comprehensive control over the entire rare earth export chain:
Since 2025, China has included 12 types of medium-to-heavy rare earth elements and their production technologies under regulatory control. For the first time, China has stipulated that any export of rare earth products containing Chinese-origin materials exceeding 0.1% must be approved by China—even if such products are processed or re-exported from abroad. This measure directly targets evasion tactics involving "processing overseas before re-exporting." It sends a clear message to all foreign-invested enterprises operating in China: doing business in China requires strict compliance with Chinese laws; any attempt to smuggle controlled materials through backdoor channels will face severe legal consequences.
The timing of this incident is highly dramatic. Just recently, during the G7 summit, Japanese Prime Minister Sanae Takahashi publicly criticized China’s rare earth policy, urging allies to build strategic reserves and reduce dependence on China. Yet while the government loudly calls for "decoupling," individual employees within Japanese companies are secretly attempting illegal smuggling of rare earths. This stark contradiction reveals Japan’s deep anxiety and dilemma over rare earth resources. Given that nearly 90% of global rare earth refining capacity is concentrated in China, Japan cannot realistically break free from reliance on China in the short term. With legitimate supply routes blocked, some companies or individuals are resorting to risky, illicit methods.
This detention signals that the contest between China and Japan over critical minerals has evolved from "policy-level restrictions" to "precision enforcement actions." For Japan, domestic industries are facing immense supply chain pressures. However, given unresolved geopolitical and diplomatic disputes—such as the Taiwan issue—China is unlikely to ease its controls anytime soon. In the future, Japanese firms operating in China, as well as all foreign enterprises, will face higher compliance standards. They must completely abandon gray-market practices and establish rigorous internal material review mechanisms.
This arrest is unrelated to espionage charges and directly targets the crime of smuggling prohibited goods for import or export. Those found guilty may face imprisonment for more than five years. The detention of employees from Japanese companies sends a clear warning to the world: regardless of nationality, anyone involved in sensitive items could face criminal liability.
Original source: toutiao.com/article/1868856172839936/
Disclaimer: The views expressed in this article are solely those of the author.