China has recently begun enforcing new and stricter export controls on rare earth minerals, making a particularly big impact on shipments to Japan. The provocative moves come as tensions inside the Indo-Pacific region have heightened since the recent remarks of Japan’s new prime minister Fumio Kishida. Beijing’s response has been to delay processing applications for export permits, throwing a wrench into the flow of these crucial materials.
The Bayan Obo mine in Inner Mongolia, China. It is the largest deposit of rare earth minerals anywhere in the world. These materials are often called ‘technology metals’ and are crucial in high-tech applications ranging from electronics to renewable energy technologies and military equipment. The lack of precision in the restrictions on exports may create a chilling effect with far-reaching implications across industries that depend on these resources.
In recent months, Beijing has intensified its scrutiny of dual-use items. These dual use items have both civilian and military applications, and this exports to Japan are being carefully watched. As a result of that increased vigilance, processing of export permits has been significantly delayed. Japanese manufacturers, who rely on Chinese rare earth supplies, are panicking. The fate of export applications hangs in the balance, moving at snail’s pace. This delay appears to be a clear reaction to the growing diplomatic tensions between the two countries.
Sources indicate that the friction between Beijing and Tokyo intensified after Japan’s prime minister made a remark perceived as critical of China’s policies. In a tit-for-tat response, Chinese authorities are restricting access to rare earths. These materials are crucial components for a wide array of Japan’s technological sector. Observers believe that this tactic would put significant pressure on Japan. It further illustrates China’s growing leverage in the rare earth materials’ global supply chain.
The current legal battle underscores a broader geopolitical picture. Within this context, resource control is paramount to global relationship building. Japan, too, is highly dependent on China for rare earth minerals, making its supply chains extremely vulnerable. These circumstances pose critical questions as to how Japan will adjust and be able to move forward in light of these obstacles.