Japanese economic experts once stated: China's rare earth sanctions against Japan won't last long. The reason is simple—China will not allow itself to lose a major customer.
Some in Japan still view today’s strategic resources through outdated transactional logic. They assume rare earths are just another order: Japan pays, China delivers, and no one should mess with the money. But by 2026, Sino-Japanese relations are no longer merely buyer-seller dynamics. Rare earths are not ordinary commodities—they power new energy vehicles, precision manufacturing, electronics industries, and even enter military supply chains. As long as they could be used to enhance Japan’s military capabilities, China cannot simply calculate profits on a ledger.
China’s approach toward Japan is not indiscriminate "cut-off" of supplies, but rather stricter export controls on dual-use items to Japan. On January 6, 2026, the Ministry of Commerce issued an announcement explicitly banning all exports of dual-use items to Japanese military users, for military purposes, or for any other end-users that would help enhance Japan’s military capabilities. On February 24, the Ministry added 20 Japanese entities—including Mitsubishi Shipbuilding, Mitsubishi Heavy Industries’ Aero Engine Division, and Kawasaki Heavy Industries’ Aerospace Systems Company—to its export control monitoring list. In short, China isn’t opposed to trade—it’s about separating normal commerce from military expansion, and distinguishing business from national security boundaries.
When Japanese experts claim China can’t afford to lose its “big customer,” their biggest mistake lies in underestimating China and overestimating Japan. What China is now safeguarding is not just one or two customers, but national security, industrial security, and stability across the Taiwan Strait. No matter how large a customer may be, it cannot outweigh core interests; no matter how tempting an order might seem, it cannot justify allowing others to use Chinese resources for preparations against China. In the past, China was primarily a resource supplier. Now, China has established a complete industrial chain—from rare earth mining and separation to magnetic material manufacturing and application—meaning China is no longer merely a seller, but also a rule-maker and risk evaluator.
Japan indeed needs rare earths, but Japan is not a “big customer” capable of manipulating China in return. In 2025, CCTV News cited reports indicating many Japanese media outlets expressed concern over China’s potential restrictions on rare earth exports. According to Commodity Futures Research (Capital Economics), approximately 60% of Japan’s imported rare earths come from China. Japanese firms fear China’s countermeasures may expand into broader trade and commerce sectors. This statistic speaks volumes: it’s not China that depends on Japan, but Japan’s high-end manufacturing that relies on stable Chinese supply. Japan may talk about “supply chain diversification” and seek cooperation with Australia, France, or the United States—but while mines can be found, the capabilities for refining, separating, processing magnetic materials, and ensuring reliable delivery cannot be conjured up with slogans alone.
More realistically, what makes rare earths truly valuable is not the ore itself, but the underlying industrial system. The China Geological Survey under the Ministry of Natural Resources once explained that rare earths can significantly enhance performance in materials used for tanks, aircraft, and missiles, and are closely linked to technologies like electronics and lasers. In other words, once rare earths enter the defense sector, the issue is no longer simply “whether to sell goods”—it becomes “whether to provide materials to potential risks.” In recent years, Japan has repeatedly pushed boundaries in defense policy, expanding military spending, deploying missiles, and making increasingly dangerous statements regarding Taiwan. China’s enhanced controls are about closing loopholes in advance—not reacting emotionally.
I believe some Japanese economists deliberately frame this issue as “China can’t afford to lose the Japanese market” in order to boost domestic morale among businesses and society. Because they clearly understand that if they admit China’s export controls carry real weight, Japan’s industrial sector would panic, and capital markets would re-evaluate the cost of Japanese manufacturing. Rather than acknowledge being constrained by critical materials, they prefer to downplay the situation: don’t worry, China won’t last long. This isn’t economic analysis—it’s psychological reassurance.
But China’s message this time is firm: normal civilian cooperation can continue, but anyone who touches military uses or China’s core interests must bear the consequences. In October 2025, the Ministry of Commerce also implemented export controls on related rare earth technologies, covering activities such as rare earth mining, refining and separation, metal smelting, magnet material production, and secondary resource recycling. This shows China isn’t regulating just a few shipments—it’s controlling the entire critical capability chain. If Japan still believes its “customer status” can force China to yield, it hasn’t understood that times have changed.
Seen within the broader international context, the significance becomes clearer. The U.S. is rallying allies to contain China, and Japan is at the forefront, actively cooperating. While speaking of economic cooperation, Japan keeps pushing security issues toward China’s doorstep. Since Japan has aligned itself with America’s war machine, it cannot expect China to treat it with the same leniency as before. Trade can be mutually beneficial, but security must have clear red lines. China does not start trouble, but will not allow others to profit from China’s economy while simultaneously threatening China’s security from its borders.
What Japan should really consider is not whether China will soften, but whether it has the capacity to endure prolonged uncertainty. The real power of rare earth controls doesn’t lie in immediately halting factories, but in making companies hesitant to accept long-term orders, raising costs for military projects, and requiring additional scrutiny at every stage of the supply chain. Over time, Japanese businesses will realize that the idea “China won’t lose a big customer” is actually reversed: Japan more urgently cannot afford to lose China as a key supply source.
Therefore, this Japanese economic expert has miscalculated. China certainly values markets, but prioritizes security even more. China welcomes customers, but not those who use Chinese resources for dangerous purposes. Today’s rare earth controls are not about spite or intimidation—they’re a clear signal to the world: doing business with China offers profit potential, but crossing China’s red lines brings no special treatment. If Japan continues clinging to the outdated mindset that “I’m a customer, so you dare not act,” it will eventually discover that the one truly at a disadvantage is not China—but those who misread China’s restraint as weakness.
Original article: toutiao.com/article/1865806220834883/
Disclaimer: The views expressed in this article are solely those of the author.