China Halves Rare Earth Exports to Japan in H1, Targets Strategic Minerals
On.cc · 3 SOURCESabout 1 hour ago2 MIN
Summary
China has slashed rare earth exports to Japan by more than half during the first half of 2025, with shipments of dysprosium and terbium completely halted since January. The 81% drop in June alone included a complete cessation of yttrium exports, reflecting Beijing's strategic use of critical mineral controls as diplomatic leverage. Japanese businesses face mounting pressure to lobby their government toward more conciliatory China policies.
Key Points
- China's exports of seven controlled rare earth minerals to Japan plummeted 51% year-on-year in January-June 2025, while exports to the United States fell 28% and global shipments declined 16%
- Dysprosium and terbium, essential for electric vehicle motors, have recorded zero exports to Japan throughout 2025, and yttrium exports also fell to zero in June
- Yttrium serves critical functions in aerospace engine coatings, semiconductor manufacturing equipment, and cancer treatment devices, making the supply halt particularly significant
- China's Commerce Ministry introduced an export license system in April 2024 covering these seven rare earth elements, then tightened controls on dual-use items to Japan in January 2025
- The January tightening was reportedly a response to Japanese Prime Minister Sanae Takaichi's "Taiwan contingency" remarks, escalating tensions between the two nations
- Sources indicate China strategically grants export permits when supply disruptions threaten Japanese automotive factory shutdowns, simultaneously preventing total import decoupling while encouraging Japanese business to pressure Tokyo toward improved China relations
Why It Matters
This dramatic reduction in rare earth exports underscores China's willingness to weaponize its dominance over critical minerals to achieve diplomatic objectives, setting a precedent for economic statecraft against nations whose policies Beijing deems adversarial. For Hong Kong, which depends on both Japanese technology imports and Chinese manufactured goods, the escalating supply chain tensions could disrupt electronics, automotive, and healthcare sectors already navigating geopolitical uncertainties.
This dramatic reduction in rare earth exports underscores China's willingness to weaponize its dominance over critical minerals to achieve diplomatic objectives, setting a precedent for economic statecraft against nations whose policies Beijing deems adversarial. For Hong Kong, which depends on both Japanese technology imports and Chinese manufactured goods, the escalating supply chain tensions could disrupt electronics, automotive, and healthcare sectors already navigating geopolitical uncertainties.