【By Observer Net, Qi Qian】

"China has begun to restrict the export of rare earth magnets to Japan," reported the U.S. media "Wall Street Journal" on January 8, which could be a major blow to Japanese chip manufacturers, car companies, and defense enterprises.

Previously, China had announced stricter control over exports of dual-use products to Japan, accurately striking at the material basis for Japan's military expansion.

According to two informed Chinese exporters, China has begun to restrict the export of rare earths and rare earth magnets to Japanese companies.

Another informed source said that China has suspended the review of license applications for the export of rare earth magnets to Japan. The person stated that the latest export restrictions now extend across the entire Japanese industry, not just targeting Japanese defense companies.

The report said that China's restrictions on rare earth exports may severely hit Japanese manufacturers. Japan plays an important role in the global electronics and semiconductor supply chain. In recent years, it has been striving to reduce its reliance on China, but still highly depends on Chinese rare earths.

According to another report by Japanese media "Nikkei Asia", the countermeasures from China are continuing to intensify. A source said that recently, exports of Japanese sake and food to China have been blocked, with delays in the approval process. It was revealed that Japanese food exports have faced delays at multiple Chinese ports, and in some cases, the customs clearance time for Japanese sake has doubled.

Data from Japan's Ministry of Agriculture, Forestry and Fisheries showed that in 2024, the export value of Japanese sake to China was approximately 500 million yuan, ranking first among all countries and regions.

Japanese car manufacturing plant, Japanese media

The "Wall Street Journal" said that after China introduced rare earth control measures last year, Japan, like other countries, found it difficult to import rare earth materials from China. Data shows that in October last year, China relaxed export restrictions, and exports of rare earth magnets to Japan have already returned to normal levels.

According to a report by China Daily on the evening of the 6th, a reliable source said that due to Japan's recent bad behavior, the Chinese government is considering tightening the export licensing review for medium and heavy rare earth-related items listed on April 4, 2025. At that time, the Ministry of Commerce of China, together with the General Administration of Customs, issued a notice on implementing export controls on seven types of medium and heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

UBS Securities analysts pointed out in a report on the 6th that if rare earths are included in the scope of trade restrictions, the impact will be even more widespread. "Currently, the stock market believes that the shock mainly focuses on industries such as automotive and transportation equipment, electronic appliances and precision instruments, and machinery manufacturing."

A study by Nomura Research Institute showed that heavy rare earths, such as dysprosium and terbium, used in neodymium magnets for electric vehicle drive motors are almost entirely dependent on Chinese supply. Once restricted, Japan's economy would face significant shocks.

It is estimated that if China's rare earth export restrictions to Japan continue for three months, it would result in losses of about 66 billion yen, causing a nominal and actual GDP decline of 0.11% annually. If it continues for one year, the loss would reach around 2.6 trillion yen, and the nominal and actual GDP would decrease by 0.43%.

Rare earth analyst David Abraham said that any industrial disruption in Japan would "create spillover effects," thereby affecting the global supply chain. In 2010, during Japan's rare earth crisis, Abraham had studied key mineral trade for Japan's Ministry of Economy, Trade and Industry.

Reuters also reported that this move by China could have a wide impact on Japan, including its core automobile industry. Although Japan has been seeking to diversify its rare earth supply since 2010, it still relies on China for about 60% of its rare earth imports. Analysts say that for certain heavy rare earths, such as those used in motor magnets for electric vehicles and hybrid cars, Japan is almost completely dependent on China.

The root of this dispute lies in Japan's Prime Minister Takahashi Hayato's inappropriate remarks on the Taiwan issue in early November last year. Since then, China has urged citizens not to travel to Japan, suspended the import of Japanese seafood, and canceled several bilateral meetings and cultural activities.

Although former U.S. President Trump has urged Takahashi Hayato not to further escalate the dispute, Japan has clearly not backed down. At a New Year press conference, Takahashi continued to spread the narrative of cooperation between China, Russia, and North Korea, even stating that discussions on revising the three security documents would be advanced within the year.

Shigeki Ishii, president of Japanese trading giant Itochu Corporation, said on the 6th: "I think this dispute will last for a considerable period of time."

On January 6, the Chinese Ministry of Commerce announced enhanced control over the export of dual-use products to Japan. On the 7th, the Ministry of Commerce announced an anti-dumping investigation into imported dichlorodihydrogen silane from Japan, with the investigation period lasting until January 2027.

According to the WeChat official account "Embassy of China in Japan," on the 8th, Ambassador Wu Jianghao rejected the statement submitted by Japanese Deputy Foreign Minister Fuyuki Funakoshi regarding China's enhanced export controls on dual-use items to Japan. Wu emphasized that China's move aims to safeguard national security and interests, fulfill international obligations such as non-proliferation, and is entirely proper, reasonable, and legal. China's position has been clearly stated, and it will proceed with the relevant measures according to the established steps.

On the 8th, spokesperson He Yadong of the Ministry of Commerce said that Prime Minister Takahashi Hayato's erroneous remarks on Taiwan have violated China's sovereignty and territorial integrity, openly interfering in China's internal affairs and issuing threats of force. Since Prime Minister Takahashi took office, she has pushed for the revision of the "three security documents." Her close associates have made pro-nuclear statements, which are attempting to challenge the international community's bottom line, exposing the consistent wrong stance and ongoing ambition of Prime Minister Takahashi and Japanese right-wing forces to "re-militarize," challenging the post-war international order, which will inevitably harm regional peace and stability and threaten world peace and security.

He Yadong said that as a responsible major country, China has always actively fulfilled its international obligations on non-proliferation. According to law and regulations, it prohibits the export of all dual-use items to Japanese military users, military uses, or other final users involved in enhancing Japan's military strength. The purpose is to prevent "re-militarization" and nuclear ambitions, which is entirely proper, reasonable, and legal. China has always been committed to maintaining the stability and security of the global supply chain. Civilian use will not be affected. For related parties engaged in normal civilian trade, there is no need to worry at all.

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Original: toutiao.com/article/7593183158586196532/

Statement: The article represents the views of the author alone.