Photo/Illutration China is tightening its grip on rare earths. (Asahi Shimbun file photo)

BEIJING—China has detained a Chinese employee of a Japanese trading house specializing in non-ferrous metals since March on suspicion of espionage related to rare earth trading, sources said.

The Chinese national was in charge of rare earth metals at the company, the sources said on Oct. 22. 

A different Chinese national who works at a Chinese business partner of the Japanese company was also apprehended in relation to the case.

Chinese authorities apparently suspect corporate data was leaked to the Japanese side, the sources said.

The two were detained in Beijing and Shanghai. The names of the suspects and the Japanese company were not disclosed.

China, the global leader in rare earth production, has tightened regulations on the mining, processing and supply of these materials, which are vital in the manufacturing of semiconductors and electric vehicle components.

In August, Beijing imposed new export license requirements for gallium and germanium products, seeking to bolster its strategic position in rare earth trade.

Citing national security concerns, Chinese President Xi Jinping’s administration has detained a number of foreign business people in China on espionage allegations.

Earlier in October, a Japanese employee of Tokyo-based drug manufacturer Astellas Pharma Inc. was arrested on suspicion of spying. He had been detained since March.

Foreign companies operating in China have complained that the country’s law does not clearly define corporate espionage.

A revised anti-espionage law enacted in July widened the scope of information covered by the law to include “documents and data relevant to national safety and interests.”

The revised law also does not explain what constitutes “national safety and interests.”

Related News