Japan slams China export ban as rare earth risks rise
Japan on Wednesday condemned China’s decision to ban exports of dual-use items for military use, calling the move “absolutely unacceptable and deeply regrettable” as tensions between the two Asian powers escalate.
The dispute intensified after Beijing imposed the export ban this week, targeting goods and technologies with both civilian and military applications. These include certain rare earth elements that are critical for manufacturing drones, semiconductors and other high-tech products, News.Az reports, citing Reuters.
Japan’s Chief Cabinet Secretary Minoru Kihara said the measures unfairly single out Japan and deviate from international practice. He declined to assess the potential impact on industry, noting that the scope of the restrictions remains unclear.
The latest row stems from remarks by Prime Minister Sanae Takaichi late last year, when she said a Chinese attack on Taiwan could pose an existential threat to Japan. China, which claims Taiwan as its territory, demanded she retract the comments — a request she has refused.
Markets reacted negatively to the escalating tensions. Japan’s Nikkei index fell about 1%, underperforming global peers, while shares of major defence contractors such as Kawasaki Heavy Industries and Mitsubishi Heavy Industries dropped around 3%.
Chinese state media has also warned that Beijing may tighten licensing reviews for rare earth exports to Japan more broadly, a move that could have serious consequences for Japan’s manufacturing sector. Despite efforts to diversify supplies since China restricted rare earth exports in 2010, around 60% of Japan’s imports still come from China.
Economists warn that even a short-term disruption could be costly. A three-month curb could reduce Japan’s GDP by 0.11%, while a year-long ban could cut output by 0.43%, according to estimates from Nomura Research Institute.
So far, customs data shows no decline in shipments. In November, China’s rare earth exports to Japan rose 35% month on month to their highest level of 2025.
Since the Taiwan remarks, China has also discouraged travel to Japan, suspended imports of Japanese seafood, and cancelled bilateral meetings and cultural exchanges. Analysts warn the standoff could drag on, drawing comparisons with the prolonged diplomatic freeze triggered by a similar dispute in 2012.
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