12 hours ago
China to block its rare-earth experts from spilling their secrets
China has told companies in its rare-earth industry to give the government lists of employees with technical expertise, aiming to ensure they don't divulge trade secrets to foreigners.
The queries point to the growing geopolitical significance of China's control over the materials, which are widely used in cars, electronics and weapons and stand at the center of the U.S.-China trade war.
According to people familiar with the queries, China's Ministry of Commerce in recent weeks asked rare-earth companies based in China for personnel lists that include specialist employees' specific expertise, education, research background and personal information.
The goal, the people said, is to develop a formal catalog of Chinese nationals with rare earth expertise and keep tabs on these employees to make sure they don't travel abroad and reveal secrets.
The lists include those in upstream roles, such as processing rare earths, and those in downstream roles, such as those using the processed minerals to make rare-earth magnets. The magnets are used in automobiles, wind turbines, drones and jet fighters.
One of the people said some experts at Chinese companies have been asked to turn in their passports to their companies or local authorities, to ensure they don't make any unauthorized trips. China already requires government officials and employees of state-owned companies to turn in travel documents and apply for approval to travel abroad.
China is the world's largest miner and processor of rare earths, and it makes around 90% of the world's rare-earth magnets. With trade tensions heating up, China in April established a new system for licensing the export of rare earths and rare-earth magnets. That has constricted the global trade in magnets, worrying Western car and electronics companies and leading to some temporary closures at factories dependent on Chinese supplies.
For years, China has produced these magnets so cheaply that it has been all but impossible for companies elsewhere to compete. But the recent export restrictions are breathing new life into efforts to develop rare-earth industries in countries such as the U.S. and France.
One of the main hurdles is the paucity of rare-earth production expertise outside of China. Processing rare earths involves painstaking separation of individual rare-earth elements from raw materials, in which many elements with similar chemical properties are jumbled together. Chinese scientists have developed equipment and processes that are widely considered best in class.
That is a turnaround from decades ago, when China was first developing its rare-earth industry and benefited from foreign experts who trained workers in the latest technologies.
To fortify its advantage, China's government in December 2023 released new regulations forbidding the export of certain Chinese technology used in rare-earth processing, making it harder for foreign competitors to emulate China's strengths.
Last September, China's Ministry of State Security said a Chinese national was sentenced to 11 years in prison for selling secrets about China's rare-earth stockpiles to unspecified foreign interests.
The ministry said foreign entities 'use every means to obtain our internal data" and if they get leaked data, it could 'put China at a disadvantage in international strategic competition."
Write to Jon Emont at
