China's 2026 Critical-Mineral Export-Control Leakage: Enforcement and Border Routes

Highlights

• China issued at least 155 strategic mineral export-control penalties in H1 2026, with cases spanning gallium, germanium, dysprosium, and rare-earth magnets.
• The Anhui Guangzhi case saw 9.37 tonnes of gallium/germanium smuggled using fraudulent licenses, resulting in a ¥8M corporate fine and up to 10 years imprisonment for executives.
• MOFCOM launched a reporting and reward system targeting third-country rerouting, component splitting, and freight-forwarding facilitators as circumvention risks.
• Myanmar and Laos are identified as expanding upstream leakage points, with informal border crossings and poor provenance controls enabling untracked rare-earth flows into China.
• Foreign nationals face personal criminal exposure, as shown by the arrest of two Fuji Electric employees in Dalian on suspected rare-earth smuggling charges.