Beijing has escalated its use of dual-use items in weaponizing trade by enforcing stricter export controls, specifically on rare-earth minerals headed to Japan. This change is just one piece of a broader strategy. Its goal is to put additional pressure on Tokyo as tensions escalate between the two countries. That brewing crisis escalated dramatically after provocative comments by Japan’s Prime Minister that Beijing views as a direct military threat.
As the Chinese government essentially is slow-walking applications for export permits for rare-earth minerals. Given the backdrop of continued standoffs between China and Japan, this purposeful deferment is considered a critical first step. In reality, the controls are narrowly aimed at issuing items that have predominant civilian use, but have military applications. This serves to illustrate the strategic importance of these materials.
China has a phenomenally large supply of rare-earth minerals, with the majority coming from the Bayan Obo mine in Inner Mongolia. At the same time, this mine has been described as the world’s largest rare-earth deposit. It still plays an important and oft-overlooked role in creating and supplying the global market’s raw materials. Now, unbeknownst to many, Beijing is tightening access to these resources. This strategy is designed to extend domestic-oriented influence into international markets and to remake Japan’s economic and technological landscape.
The resulting tit-for-tat diplomatic exchanges on the expulsion of diplomats have increasingly been used as a means to escalate an already bitter bilateral standoff. Just last week, Japan Prime Minister Fumio Kishida lambasted China’s aggressive policies and military expansion. In return, Beijing hit back furiously, viewing these remarks as a direct challenge to its national sovereignty. The move targets key Chinese authorities to demonstrate their discontent and reassert U.S. influence over crucial resource exports.
As Japan faces a new era of unforeseen challenges, it is uncertain how Japan will react to this recent turn of events. Analysts suggest that the delays in permit approvals may hinder Japan’s access to vital raw materials necessary for its industries, including electronics and defense sectors. This has wider consequences for Japan’s economic stability and its newfound place on the global economic stage.