A site of illegal mining of rare earth in Guangdong. (File photo/Xinhua)

Smuggling of rare earth minerals in China reached 22,320 tons in 2011, far exceeding the quota of exports through normal channels in the country, the Shanghai-based First Financial Daily reports.

Foreign customs statistics from 2006 to 2008 showed that rare earth imports from China were considerably higher than its exports, according to a white paper released by the State Council, China's cabinet, on June 20. The foreign figure was 120% higher than government statistics in 2012, said the white paper, the first on the rare earth industry.

The problem continues to get worse despite the state's intensified crackdown on the smuggling of rare earth elements, which are essential in the manufacture of hi-tech products.

In 2011, China produced 96,900 tons of rare earth smelting products, accounting for more than 90% of the world's total production. According to customs data, the quota of exports of rare earth oxides in 2011 was 24,000 tons, equivalent to about 30,000 tons of processed products. However, actual exports last year totaled just 18,600 tons, leaving 40% of the export quota unused. Foreign customs statistics put China's total rare earth imports at 40,920 tons, meaning its exports of smuggled rare earths exceeded 20,000 tons.

Rampant smuggling is contributing to the reduction in rare earth imports through normal channels. It has also led to sluggish demand for the legal products and falling prices in the market, said Du Shuaibing, an industrial analyst with Beijing-based raw-material information portal Baiinfo.

The government had been combating rare earth smuggling in recent years and has solved eight smuggling cases leading to the arrest of 23 people and seizure of 769 tons of rare earth elements, said Su Bo, the vice minister of the Ministry of Industry and Information Technology.