Calling up restrictive China-Japan relations, specifically in reference to the increased export restrictions on rare earth minerals. This ruling pours fuel on the fire that has become US-China relations. In practice, this means Beijing is taking a harder line on dual-use items. This decision represents a direct answer to statements by Japan’s Prime Minister.
One of the principal drivers of this development is the Bayan Obo mine, located in Inner Mongolia, China. According to the U.S. Geological Survey, it is the world’s second largest producer of rare earth minerals. These minerals are essential for numerous defense, clean energy, and advanced technologies. These minerals have grown in strategic importance to global supply chains and are now considered critical commodities across a variety of industrial sectors.
In recent weeks, China has started to slow-walk Japanese applications to export rare earths. This move is consistent with Beijing’s longer term plans to develop and strengthen their own export controls, especially on articles that can serve dual-use purposes. The move to tighten these regulations almost certainly telegraphs a much deeper geopolitical current. This change is notably timed after a series of remarks from Japan’s new leadership that has irked Chinese officials.
The rare earth minerals extracted from the Bayan Obo mine are integral to numerous high-tech applications, including electronics, renewable energy solutions, and military equipment. Limiting access to these essential compounds would have a dramatic effect on Japan. The country depends on them for more than half the country’s manufacturing sector.
It’s not publicly clear what Japan’s Prime Minister said to provoke this strange-looking retaliatory move from China. However, in recent months, diplomatic friction between the two countries has reached a boiling point. That tension continues to be exacerbated by a confluence of political and economic factors.