China and Japan aren’t talking. Will their rare earth trade go quiet?

Lead

When Beijing unveiled a sweeping array of export controls on rare earth elements during last year’s trade war with the United States, it helped broker a temporary truce in that high-stakes conflict. But for Japan, the prospect of squeezed rare earth supplies is not new. In 2010, after a collision between a Chinese fishing trawler and Japanese patrol boats near the disputed Diaoyu Islands, and the detention of the trawler’s captain, Beijing threatened “severe countermeasures.” Some Japanese businesses at the time reported slowed or halted shipments of these critical minerals, which are overwhelmingly sourced from China.

Now, with relations between Beijing and Tokyo at another low point, Japanese industries again fear that their rare earth supplies may be delayed or cut off. Yet recent trade data offers a slightly more hopeful picture: China’s exports of rare earth permanent magnets to Japan rebounded modestly in April after a sharp slump in March.

Coverage Comparison

Two reports from the South China Morning Post highlight different facets of the current situation. One piece focuses on the historical parallel of the 2010 disruption and the broader context of China’s use of rare earth export controls as leverage in trade disputes. Another report zeroes in on the latest trade figures and the anxieties voiced by Japanese firms, while also detailing the diplomatic feud that has escalated since November.

Both analyses underscore a common theme: Japan’s heavy reliance on Chinese rare earth materials makes it vulnerable to political tensions between the two neighbors. However, the first article places greater emphasis on the lack of substantial bilateral channels to resolve commercial grievances, while the second weighs the significance of the recent export data and the January ban on “dual-use” items.

Key Claims

• China’s export controls on rare earth elements were a key factor in spurring a temporary truce in the U.S.-China trade war, according to an analysis in the South China Morning Post.
• The 2010 incident, which included Beijing’s threat of “severe countermeasures,” led some Japanese businesses to report slowed or stopped rare earth shipments, although Beijing denied imposing an official ban.
• Japanese industries reliant on rare earth minerals are concerned that shipments could be delayed or halted due to the current diplomatic strain, as analysts note a lack of practical communication channels on export controls.
• China’s exports of rare earth permanent magnets to Japan rose by 2.5% in April after a 17.3% plunge in March, according to Chinese customs data reported by the South China Morning Post.
• Japanese firms have warned of “severe” shortages of permanent magnets, which are essential for electric vehicles, advanced weaponry, and other high-tech products.
• In January, China banned exports of “dual-use” items—goods with potential military applications—to Japan, which may include rare earth elements, as well as drones and advanced semiconductors.

Perspectives

The historical experience of 2010 looms large in Japanese corporate memory. Even though Beijing insisted it had not enacted a ban or restriction on rare earth exports to Japan back then, prevailing perception in Japan held that an unofficial cutback had occurred. That perception was reinforced by a broader reduction in Chinese rare earth exports that year. In the current climate, analysts say that practical communication regarding export controls and licensing procedures has become less transparent, heightening anxieties.

Japanese firms’ short-term outlook is cautiously optimistic after the April rebound, but the modest increase only partly offsets the previous month’s decline. The ranking of Japan as the ninth-largest buyer of Chinese permanent magnets in April, behind Germany, South Korea, and the United States, suggests that Japanese demand is still robust but vulnerable to political disruptions.

Beijing’s actions—including travel warnings and the ban on dual-use exports—are framed by the South China Morning Post as part of a diplomatic feud triggered by Japanese Prime Minister Sanae Takaichi’s November remarks about Taiwan, which Beijing perceived as an “existential threat.” While the export ban did not specifically name rare earths, their classification as dual-use items means they could be affected.

Neither China nor Japan has officially suspended rare earth trade, and the recent export data indicates that some shipments continue. Nevertheless, the lack of substantial bilateral mechanisms to address commercial disputes leaves the trade relationship exposed to political winds. As one professor at the Tokyo-based National Graduate Institute for Policy Studies put it, there is a growing perception that practical communication on export controls has become less transparent—a worrying sign for Japanese industries that depend on Chinese rare earth materials.