China’s Feud With Japan Worsens as Tokyo Slams Export Controls
(Bloomberg) — Tokyo protested China’s announcement of export controls on products shipped to Japan that may be for military use; This was the latest flare-up of diplomatic tensions between the two Asian countries over a dispute over Taiwan.
According to the ministry, Masaaki Kanai, director general of Japan’s Ministry of Foreign Affairs Bureau of Asian and Oceanic Affairs, lodged the protest a few hours after the action was announced on Tuesday and appealed to Deputy Chief of Mission to China Shi Yong to request that the measures be withdrawn.
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Kanai told Shi that the measures were “absolutely unacceptable and extremely regrettable” and deviated significantly from international practices, according to a statement from the ministry.
On Tuesday, China’s Ministry of Commerce said the export of all military dual-use products to Japan has been banned with immediate effect. Beijing is considering stricter export license reviews for some medium and heavy rare earth-related products, the state-run China Daily reported on Tuesday.
The trade action comes amid a diplomatic impasse following comments by Japanese Prime Minister Sanae Takaichi in early November suggesting Tokyo could deploy its military if China used force to seize Taiwan. Beijing responded angrily and demanded Takaichi retract his remarks. He rejected the offer, saying Japan’s stance on Taiwan had not changed.
Since then, China has restricted tourism to Japan, staged protests at the United Nations and stepped up military maneuvers, among other measures. The impact of the latest move on dual-use products on economic activity is not entirely clear, but it could include restricting rare earth resources.
Rare earth elements are an important raw material for military equipment, including high-strength magnets used in missile guidance systems and fighter jet engines.
Restricting rare earth supplies has long been floated as a potential way for Beijing to put pressure on Tokyo, especially after China used its dominance in the sector to lower US tariffs last year.
Japan relies on China for about 70% of its rare earth imports by 2024, according to the Japan Organization for Metal and Energy Security. This comes more than a decade after China used the materials as weapons against Tokyo during a 2010 territorial dispute. At that time, China’s move caused great damage to Japan’s manufacturing industry.
China’s statement on export controls was vague, but that vagueness may have been intentional. “This announcement triggers concerns in Japan about the continued availability of critical industrial inputs from China, placing immediate pressure on Takaichi to offer concessions,” Teneo analysts James Brady and Gabriel Wildau said in a research note.
