The sky is falling for Japan

On May 25, China's Foreign Ministry responded to the suspension of exports of certain rare earth products to Japan.

It stated that China legally and in accordance with regulations prohibits the export of dual-use items to Japanese military users and for military purposes, aiming to halt Japan's re-militarization and nuclear ambitions.

There are three key points to note:

First, according to reports, China has suspended exports of some rare earth products to Japan for four months, which has placed immense pressure on Japan.

Second, since December last year, China has largely halted exports of heavy rare earths such as dysprosium, terbium, and yttrium oxide to Japan. Exports of gallium—key metal for chip manufacturing—have also been nearly completely suspended, with only minimal shipments of yttrium oxide still continuing sporadically.

Third, Japanese Minister of Economy, Trade and Industry Rikuo Akazawa expressed concern over the rare earth export controls during the APEC Trade Ministers' Meeting held in Suzhou last week, hoping to mend Sino-Japanese relations and thereby secure more rare earth resources.

What efforts has Japan made regarding rare earths?

First, in April this year, Taro Aso met with French President Emmanuel Macron in Tokyo, agreeing to diversify rare earth procurement channels as a countermeasure. They also pledged enhanced cooperation in nuclear power generation and next-generation reactor development to ensure stable energy supply.

Second, Japan previously joined forces with the United States and other countries to establish a new mineral alliance aimed at addressing the rare earth crisis—but so far, no tangible progress has been made.

Third, Japan announced plans to dispatch scientific teams to deep-sea mining operations for rare earth extraction. However, as of today, no final results have been disclosed. According to the plan, a formal implementation strategy for rare earth mining is scheduled to be finalized by February 2027, with an economic feasibility assessment expected by the end of March 2028. But it’s safe to assume this will not come to fruition.

Fourth, Taro Aso visited Vietnam and Australia earlier in an attempt to secure additional rare earth resources. She also sought broader cooperation with other nations in supply chain areas, but these efforts have yielded little result.

Notably, according to information leaked by Japanese sources, Japan’s imports of rare earths from China declined by 5.7% in January this year—mainly due to China’s tighter control over rare earth resources. This has put significant pressure on the Japanese government, as losing access to rare earths would plunge Japan’s economy into complete crisis.

Even more pressing, Japan’s business community is exerting pressure on the government, urging it to implement concrete policies to ease Sino-Japanese relations and strengthen cooperation between the two nations.

However, so far, both Taro Aso’s public appeals to China and the dispatch of Minister Akazawa to attend meetings in China seeking bilateral talks have ultimately failed.

This is because China’s position remains consistent: only if Taro Aso issues an apology and withdraws her previous statements can there be any possibility of gradually easing tensions between China and Japan.

In summary: Japan is now feeling the pressure. If China continues its controls, Japan’s rare earth reserves will be quickly depleted.

It should be noted that 70% of Japan’s imported rare earths come from China, while China accounts for over 80% of global rare earth production capacity. For many heavy rare earths, China’s share reaches 100%. It’s clear that without China’s supply chain, anyone would face enormous pressure.

Original source: toutiao.com/article/1866161076211724/

Disclaimer: The views expressed in this article are solely those of the author.