China is reportedly seeking the names of rare-earth industry employees who possess technical expertise and seizing their passports to ensure they don't reveal trade secrets or make any unauthorized trips abroad.
According to people who spoke with The Wall Street Journal, China's Ministry of Commerce has asked the country's rare-earth companies to provide the government with personnel lists that include the employees' personal information, education, research background, and specific expertise.
The Journal's sources said the goal is to develop a database of Chinese nationals with rare-earth expertise and monitor their movements to make sure they don't divulge industry secrets to foreigners.
The government's queries underscore the increasing geopolitical significance of China's near-monopoly on the materials and are at the crux of Washington's trade war with Beijing.
The lists reportedly include a variety of rare-earth roles, including those who process rare-earth minerals and those who use the processed minerals to make rare-earth magnets, which are used in drones, fighter jets, the automotive industry, and wind turbines.
The largest miner and processor of rare-earth materials in the world, China reportedly manufactures about 90% of the world's rare-earth magnets.
One of the people who spoke with the Journal said some of the rare-earth experts have been told to turn in their passports to either their companies or local authorities to prevent them from leaving the country. In China, government officials and employees of state-owned companies are already required to seek approval to travel and hand over their travel documents.
Amid trade tensions with the U.S., China established a new system for licensing the export of rare-earth materials in April that has restricted the global supply of rare-earth magnets and caused anxiety among Western automobile and electronics companies.
For years, it's been practically impossible for foreign companies to compete when it comes to these magnets, given how cheaply China has been able to produce them, but the export restrictions have reportedly spurred recent efforts to develop rare-earth companies in countries such as France and the United States.
Processing rare-earth elements from raw materials is meticulous work and the processes and equipment that Chinese scientists have developed are widely recognized as preeminent. One of the primary obstacles to setting up rare-earth industries outside of China has been the scarcity of production expertise.
The current rare-earth expertise landscape in China is reportedly a reversal from decades ago, when foreign experts imparted their knowledge to Chinese workers in the country's fledgling rare-earth industry.
To solidify its advantage and thwart foreign competition, the Chinese government released new regulations in December 2023 that prohibited the export of Chinese technology used in rare-earth mineral processing.
Nicole Weatherholtz ✉
Nicole Weatherholtz, a Newsmax general assignment reporter covers news, politics, and culture. She is a National Newspaper Association award-winning journalist.
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