The Yomiuri Shimbun reported on the 7th, citing a Japanese government official, that the Chinese government is delaying export permit procedures for rare earths headed to Japanese corporations.
It is seen as a retaliatory measure for a remark by Sanae Takaichi, Japan's prime minister, last month that a "Taiwan contingency (war)" would be a crisis threatening Japan's survival.
According to the Yomiuri Shimbun, on the 7th a Japanese government official said, "Export permit procedures in China for rare earths and other critical minerals bound for Japan are slower than usual." The delay surfaced exactly one month after Prime Minister Takaichi mentioned in the Diet the possibility of Self-Defense Forces involvement in a Taiwan contingency.
Within the Japanese government, China's move is effectively seen as retaliation. A government official said, "We cannot yet conclude whether the administrative delay by the Chinese authorities is a simple procedural snag or deliberate harassment," but did not lower the level of alert. Another government official said, "It is highly likely that China intends to use rare earths as leverage to shake the Japanese government."
China accounts for an overwhelming share, topping 90%, of global refined rare earth production. Since the 1990s, China has pushed plans to develop rare earths as "China's oil," and it now fully controls the global supply chains for rare earths and key minerals. Rare earths are widely used in electric vehicle motors, secondary batteries, semiconductors, wind power turbines, and missile systems, earning the nickname "vitamins of advanced industries." In particular, heavy rare earths, essential for high-performance motors and military equipment, are nearly monopolized in the supply chain by China, making replacement by other countries close to impossible.
Japan previously experienced a China-origin "resource shock" in Sept. 2010 when a Chinese fishing boat collided with a Japan Coast Guard patrol vessel in waters near the Senkaku Islands (Diaoyu Dao in Chinese). When China abruptly halted rare earth exports at the time, Japan's manufacturing sector suffered massive damage. Japan's government ultimately released the Chinese captain involved in the collision, effectively raising a white flag. In April this year, China again pulled out the rare earth export control card in response to the tariff policy on China led by U.S. President Donald Trump.
There are also suggestions that China could pull additional retaliation cards beyond rare earths. A Japanese government official said, "China is using a 'gray zone' tactic of delaying only procedures without announcing formal sanctions," adding, "It appears to be testing Japan's response while adjusting the level of pressure."
China is currently ramping up a public opinion campaign on the international stage to pressure Japan. The Yomiuri Shimbun said, "China claims it is export control under the law, but it is clearly economic coercion," adding, "If Japan's government responds passively, it could suffer greater disadvantages." Japan's government plans to closely watch developments on the Chinese side and seek to ascertain intentions through diplomatic channels.