Rare earths keep the modern world running. Electric vehicles, missiles, and high-tech manufacturing all depend on them, and the planet's largest deposit sits at Bayan Obo in China's Inner Mongolia. Japan's reliance on Chinese supply is staggering.
For dysprosium and terbium, the two elements that power EV motors, that dependence approaches 100 percent. Once Beijing tightened export controls, Japan turned to the black market, and a smuggling network that has run for more than 15 years has become tangled up with the Japanese right wing's political ambitions in Inner Mongolia.
A Forum With a Political Edge
Sanae Takaichi is not shy about her intentions. Japan's current prime minister hosted an international forum titled "The History and Prospects of the Southern Mongolia Freedom and Independence Movement" in Tokyo last October, while she still served as president of the Liberal Democratic Party. She took office as prime minister just a month later. Calling China's Inner Mongolia "Southern Mongolia" is a deliberate diplomatic provocation, and it thinly veils Japan's real interest in the region's rare earth wealth.
Takaichi also founded and chairs the Diet's "Parliamentary League for Supporting Southern Mongolia," the only parliamentary group in the world built around that name.
Stolen Ore at the Source
Bayan Obo holds proven reserves of 43 million tonnes of rare earth oxides. For decades, though, the site was mined mainly for iron ore. Vast quantities of rare earths ended up dumped in tailings alongside processing waste, and the slag and sludge scattered around the mining area still contain rare earths today. That regulatory blind spot turned ore theft into the starting point of the entire smuggling chain.
The underground market has its own code language. Mainland journalists who investigated on the ground found that traders use "iron ore" as a cover word while actually dealing in raw rare earth ore. Ore graded at 5 percent sells on the black market for roughly 80 to 100 yuan per tonne. That means 1,000 tonnes of 10 percent-grade ore can be had for less than 100,000 yuan.
The "Gelatou" area on the western edge of the mining zone shows just how organized this theft has become. Dozens of heavy trucks haul away thousands of tonnes of stolen ore there every single night. That ore then moves to nearby small processing plants, where about 15 tonnes of raw material yields about 1 tonne of rare earth concentrate powder. Smelting plants take it from there, refining it into products like rare earth carbonates. The math is brutal: 100 tonnes of raw ore ultimately concentrates down to only 3 to 4 kilograms of high-purity rare earths.
Disguised Exports and Bribed Insiders
Illegal mining is only half the story. Disguising legally purchased rare earths as ordinary goods for export forms the other major smuggling channel.
The disguises are simple but effective. Smuggling rings declare metallic rare earth blocks as "ferroalloy" and powdered rare earths as "talcum powder." They mix real shipments with fake ones, blending, say, 2 tonnes of rare earths into 10 one-tonne bags while filling the rest with ordinary goods, so customs spot checks often miss the contraband entirely. These networks also bribe customs insiders to act as lookouts, warning smugglers to pause shipments whenever enforcement tightens.
One case shows how far this went. Hu Jiayong, head of Zhuhai Haiyou Company, purchased 4,100 tonnes of lanthanum oxide from Inner Mongolia and falsely declared it as "iron oxide red" for export to Japan through Qingdao. The scheme fell apart only because the customs declaration did not match the warehouse manifest, and the case ultimately involved more than 100 million yuan.
Geography did not stop the smugglers either. In 2013, Hohhot customs busted a cross-provincial smuggling operation that ran 3,000 kilometers from Baotou to the Sino-Vietnamese border, moving 130 tonnes of rare earths through Vietnam and on to Japan. Another route ran from Dongguan through Shenzhen's Wenjindu port into Hong Kong, with five trucks a day carrying 2 tonnes each and hundreds of tonnes leaking out every month.
Beijing Tightens the Net
Beijing has fought back hard since last year. In January 2026, the Ministry of Commerce placed seven categories of medium and heavy rare earths under export controls aimed squarely at Japan. By March and April, rare earth exports to Japan had plunged nearly 90 percent, and dysprosium and terbium exports had dropped to zero starting that January.
Enforcement got smarter, too. Authorities rolled out blockchain traceability codes to track legal exports and AI-based image recognition systems to catch disguised declarations. Smuggling cases worth more than 5 million yuan now get prosecuted under national security charges. Last year alone, 12 people were sentenced to death, and authorities seized more than 8 billion yuan in smuggling-related funds.
The Ministry of Commerce also introduced a "long-arm jurisdiction" principle: even rare earths already exported abroad remain subject to Chinese export control law if they contain Chinese-origin components. That single rule slammed shut the loophole of laundering origin through Southeast Asian transshipment.
The Failed Mongolia Detour
Even airlifts could not save Takaichi's plan. Her government reportedly tried routing rare earths through Mongolia, dangling a 38-billion-yen low-interest loan to expand Chinggis Khaan International Airport. But Mongolian President Khurelsukh personally told Chinese Foreign Minister Wang Yi that "friendly relations with China are our top diplomatic priority, and we will not damage China's interests by developing ties with other countries." That assurance cut Japan's Mongolian route off before it could get started.
The net has never been tighter. Export controls, criminal prosecution, and extraterritorial jurisdiction now operate all at once, making it extremely difficult for Japan to secure smuggled rare earths at any real scale. But as long as Japanese industrial demand persists and some are willing to gamble on the black market, this underground contest over strategic resources will not end anytime soon.
Mao Paishou
** 博客文章文責自負,不代表本公司立場 **
When the Russia-Ukraine war broke out, energy costs in Germany, a country heavily reliant on Russian natural gas, spun instantly out of control. Electricity prices at one point surged sevenfold, forcing ordinary people to dream up all manner of clever tricks to save on their power bills. One of those tricks has become a distinctive sight on German streets: the "balcony solar" system.
To cut power bills, Germans turned balconies into power plants.
"Balkonkraftwerk": Miracles On Balconies
This simple generating setup costs just a few hundred euros, yet more than 1.33 million units have been installed across Germany in three years. The German government has even amended the law, granting tenants with no rooftop of their own priority installation rights.
What Germans call the "Balkonkraftwerk", or "balcony power plant", is actually just one or two solar panels hung outside the railing, an inverter the size of a shoebox, and a plug that goes into a household socket. The current then flows back into the home: the inverter sets its output voltage slightly higher than the 230V household supply, so solar power feeds in reverse into the wiring. A small storage battery can be added to keep the power coming at night.
The "Balkonkraftwerk": railing-hung panels, a shoebox-sized inverter, one plug.
The principle is not complicated. It works rather like a water supply system. Pipes maintain a steady pressure; turn on the tap and the pressure difference pushes the water out. The grid works the same way. China's standard household voltage is 220V and Germany's is 230V. The inverter in a balcony photovoltaic module simply nudges its output voltage slightly above the socket voltage, pushing solar power back in.
Once the current enters the socket, it is consumed on the spot, "drunk up" by the appliances at home. Less electricity is drawn from the grid, and the meter turns more slowly. If no appliances are running, then in areas where bidirectional metering is permitted, the surplus power flows out of the home along the mains line and back into the grid.
A Few Hundred Euros, Real Money Back
A "balcony power plant" sells for roughly 200 to 500 euros, depending on output. The best-selling 800W model goes for about 350 euros. A solar-plus-storage package with a battery costs between 800 and 1,500 euros.
A granny who lives in Stuttgart finds a 300W system enough to cover her basic needs: lighting, the router and electric fans. She now checks the next day's sunshine forecast every evening. If the sun will be out, she schedules a bike charge or runs the dishwasher. "Save whatever you can," she says.
Granny's 300W system covers her lights, router and fans.
Her nightly ritual: the sunshine forecast. "Save whatever you can."
Weyland, a young man in the northern city of Kiel, hung two panels with a combined output of 600W on the balcony of his rented apartment. In good weather they cover half of his daily electricity use. The whole system cost under 500 euros, yet saves him more than 90 euros a year, a payback period of about five years. These days he spends his time glued to the app, watching the generation figures roll in.
Kiel renter Weyland's two balcony panels total 600W.
In southern Germany, where the sunshine is better, a standard 800W system generates about 750 to 850 kWh a year. At last year's average price of 0.39 euros per kWh, that puts up to 295 to 334 euros a year back in the user's pocket.
For an ordinary household consuming 3,000 kWh a year, saving is about 25 to 28 percent. A single-person household using around 1,500 kWh could ideally save 50 to 57 percent.
No Roof? No Problem
Europe used to put solar panels on rooftops. But more than half of Germany's population lives in rented housing, the highest share in the EU. That means no roof, no land, nowhere to put panels, and no eligibility for the complicated installation and grid-connection approval process.
No roof, no problem: balcony solar is the tenant's lifesaver.
That was when Chinese manufacturers stepped up, Anker Innovations, EcoFlow and Zendure among them. They launched lightweight, low-cost balcony solar kits that skip the tedious paperwork and are far easier to use.
Panels have been slimmed down from the traditional 20kg to just 3 to 5kg. Hook-style railing clamps fix them in place with a few screws. Some models can simply be lashed on with metal cable ties, and they can be taken down easily when moving.
Voltage has dropped from the 600V to 1,000V high-voltage direct current of rooftop solar to a safe 30V to 60V. The plug goes straight into an ordinary socket, and monitoring is done entirely through an app. Installation and use are virtually "zero-threshold". German young people love it. Chinese manufacturers have turned solar "engineering" into a consumer electronics product for everyone.
Berlin Gives the Green Light
The German government has also given the green light. A legislative amendment in May 2024 allows self-installation without prior approval; simple registration afterwards is enough. Balcony solar is now a "privileged installation", on par with disabled-access facilities and EV charging points. Landlords and owners' committees may not block installations on grounds such as "spoiling the view". A landlord who wants to refuse must prove a safety hazard; if the tenant can fix the hazard, the installation goes ahead anyway. The government also waived the 19 percent VAT, and cities including Berlin and Stuttgart have rolled out dedicated subsidies of up to 500 euros. All income from generation is exempt from personal income tax.
With the government "loosening the reins", balcony solar has grown rapidly. Around 260,000 units were added in 2023. The figure soared to 435,000 in 2024, and another 430,000 or so were registered in 2025. That is 1.1 million units installed at lightning speed in three years. By May this year, cumulative installations had reached 1.33 million, the equivalent of more than a thousand German households signing up every day.
Policy green light: install first, register afterwards.
Other European countries have followed suit. The Netherlands had reached 600,000 cumulative installations by the end of 2025, the highest penetration after Germany, with nearly 5 percent of households equipped. Austria has installed 250,000 units, Italy 200,000 and Belgium 150,000.
Made in China, Invisible at Home
Of the solar panels imported into Europe, 98 percent come from China, and 70 percent of micro-inverters are Chinese-supplied. In balcony energy storage, Chinese companies had already secured the first seven places of the top ten best-seller spots in Europe as early as the third quarter of 2024. Industry forecasts see global installed balcony solar capacity exceeding 50 gigawatts by 2030, with China likely to claim more than 40 percent of it.
Yet in China itself, these products are practically invisible in cities. For one thing, electricity in China is genuinely cheap. For another, China follows a "centralized plus distributed" path.
The northwest builds gigawatt-scale centralized solar bases across deserts and the Gobi on a massive scale, using ultra-high-voltage transmission to solve the geographic mismatch. The east develops distributed solar on factory and detached-house rooftops. Rural rooftops easily run to tens or even hundreds of square meters, accommodating 20kW to 50kW systems. That is dozens of times the generating capacity of balcony solar.
With no domestic demand to speak of, Chinese companies have nonetheless struck overseas demand with pinpoint precision and taken command of the global balcony solar market. The same story has played out with saddle-style window air conditioners, fully automatic lawnmowers, electric-assist bicycles and AI game-tracking cameras. To Western politicians, China's technological rise is a threat. But to ordinary people abroad, Chinese products have made life better, time and again.
