China Detains Fuji Electric Employees for Rare Earth Smuggling

The Government of China detained two Japanese nationals on May 18 and May 25, 2026, on suspicion of smuggling prohibited items, specifically rare earth materials critical for weaponry and electric vehicles. The detainees are employees of Fuji Electric Co., a major Japanese machinery and electronics firm. Chinese customs authorities notified Japanese consular offices in Dalian and Shenyang about the arrests.

In response to the incident, the Ministry of Commerce of the People's Republic of China announced new measures on June 24 to strengthen oversight of strategic mineral dual-use items. Starting July 1, Beijing will offer rewards to individuals and companies that report export control violations and may grant mitigated penalties to entities that self-disclose irregularities.

Japanese Chief Cabinet Secretary Minoru Kihara confirmed the detentions and stated that the government is coordinating to protect its citizens. Chinese Foreign Ministry spokesperson Guo Jiakun confirmed the arrests and urged Japan to ensure its nationals and businesses abide by Chinese law.

The incident occurs during a period of high diplomatic tension. Relations soured after Japanese Prime Minister Sanae Takaichi suggested that Chinese action against Taiwan could justify Japanese military intervention. Consequently, China has restricted shipments of dual-use items and key minerals to Tokyo and cancelled various trade and cultural events.