Japan has formally urged China to revoke new export controls on products with potential military applications, including concerns over rare earth minerals, in a further escalation of tensions between Tokyo and Beijing.
China’s Ministry of Commerce announced on Tuesday (Jan 6) that it would “strengthen export controls on dual-use items to Japan,” effective immediately. While the statement did not specify which items were affected, analysts fear it could include rare earth minerals—critical components in a wide range of technology, from smartphones to advanced fighter jets.
The move comes in the wake of remarks by Japanese Prime Minister Sanae Takaichi in November, in which she suggested that Japan may consider military action if Taiwan is attacked. China claims Taiwan as part of its territory and has not ruled out the use of force to assert control over the island. Beijing has also voiced repeated criticism of Japan’s recent military modernization.
Hours after the announcement, Masaaki Kanai, secretary general of the Asian and Oceanian Affairs Bureau at Japan’s foreign ministry, lodged a strong protest with Shi Yong, deputy chief of mission at the Chinese embassy. In a statement released late Tuesday, the ministry said Kanai described China’s measures as “deviating significantly from international practice, absolutely unacceptable and deeply regrettable.”
Japan imports more than 70 percent of its rare earths from China, according to the Japan Organization for Metals and Energy. Despite Tokyo’s efforts to diversify supply chains following a 2010 dispute—which saw Beijing temporarily cut rare earth exports—China remains by far the world’s largest producer of these critical materials.
Experts warn that the economic impact of Chinese export restrictions could be severe. Takahide Kiuchi, executive economist at Nomura Research Institute, estimated that a three-month ban on rare earths could cost Japan ¥660 billion (around US$4.2 billion) and reduce the nation’s GDP by 0.11 percent. Rare earths such as dysprosium and terbium, used in neodymium magnets for electric vehicle motors, are particularly vital, with Japan relying almost entirely on Chinese supply.
Global consultancy Teneo suggested that the ambiguity of China’s announcement may be intentional, designed to pressure Tokyo into a more conciliatory position. “The brief statement by China’s commerce ministry is vague, and the impact of the new measures could range from almost entirely symbolic to highly disruptive,” Teneo said.
The consultancy added that Beijing could initially reject a limited number of Japanese license applications, signaling potential for broader disruptions unless Tokyo adjusts its stance. Such a scenario, while modest in immediate effect, would heighten uncertainty in Japan’s supply chains and escalate diplomatic pressure on the government.
Japan’s government has so far avoided discussing the potential industrial impact of the Chinese measures. Chief Cabinet Secretary Minoru Kihara declined to comment Wednesday, citing “the numerous unclear points, including the scope of the measures.”
The incident marks the latest point of friction in an increasingly tense relationship between Japan and China. Analysts note that the timing of China’s move—coming shortly after Takaichi’s Taiwan remarks—highlights Beijing’s willingness to use trade tools as leverage in regional security disputes.
Observers warn that a sustained disruption of rare earth supplies could have long-term consequences for Japan’s high-tech and defense industries, forcing Tokyo to accelerate efforts to diversify sourcing and reduce dependency on Chinese exports. Meanwhile, the diplomatic standoff underscores the fragility of East Asian trade-security dynamics, where political statements can quickly ripple through global markets.
