China has intensified its export controls on dual-use items to Japan, a move that includes the critical sector of rare earth minerals. This decision comes on the heels of comments by Japan’s Prime Minister, further raising the temperature in an already boiling spat between Beijing and Tokyo. The Bayan Obo mine in Inner Mongolia, pictured above, is the largest source of rare earth elements, one of today’s essential minerals. These minerals are essential for a range of cutting-edge industries.
China’s Bayan Obo mine contains the world’s largest reserves of rare earth elements. These components are crucial in the production of electronics, on shoring of renewable energy technologies, and equipment required for a strong military. China has, until recently, been the world’s largest producer of rare earths. Certainly, its influence is important—arguably essential—in the supply chain for any of these valuable materials. The measures that Beijing has recently implemented indicate a more strategic change in its policy on exports.
In retaliation, in recent weeks China’s government has started to make exporting rare earths to Japan a slow and complicated process. This deliberate delay is perceived as a form of retaliation following comments made by Japan’s Prime Minister that may have been viewed as dismissive of China’s global standing. The tortuous processing of these applications hampers Japan’s access to vital critical minerals. This development further underscores a troubling precariousness in the state of their bilateral relations.
Tensions between Beijing and Tokyo have been increasing for some time now. This latest development has escalated their already tumultuous relationship. Analysts suggest that China’s export curbs could impact various sectors in Japan, particularly those reliant on advanced technologies and manufacturing processes that utilize rare earth elements.
The consequences of these export controls reach far beyond next week’s economic worry. They do illustrate the wider geopolitical currents throughout the area. Growing national security considerations are having profound effects on the trade and diplomatic relations. With China’s increasing control over mineral resources, it’s a trend that is difficult to overlook. In turn, Japan needs to rethink its supply chain policies to minimize risks associated with reliance on Chinese exports.