BEIJING - China has approved several Japan-bound exports of rare earths under tightened controls of dual-use item shipments to the neighboring country in January amid a diplomatic feud over Prime Minister Sanae Takaichi's remarks on a Taiwan contingency, trade industry sources said Friday.
Observers believe Beijing's move reflects its wariness amid attempts by the United States, Japan and European nations to reduce their dependence on China for rare earths, which are vital for manufacturing high-tech and defense products including electric vehicles, semiconductors and advanced weapons.
China, which mines around 70 percent and refines about 90 percent of the world's rare earths, introduced stronger controls of dual-use item exports to Japan on Jan. 6, covering seven types of the critical minerals as well as rare metals and electronic devices.
The Chinese government lists up more than 900 items as goods that can be used for both civilian and military purposes, including rare earths, chemical products and aerospace-related equipment.
The sources said Beijing gave the green light to Japan-bound exports of several rare-earth minerals including the seven types after Jan. 6.
As applications for the shipments had apparently been submitted before the introduction of the tighter controls, Japanese businesses are closely watching whether the Chinese authorities will continue to approve rare earth exports, they said.
In April last year, China introduced tighter export controls of the seven types of rare earths amid heightened trade tensions with the United States. The world's two largest economies agreed on a one-year truce in their trade war in October.
The Chinese Commerce Ministry has said its stronger export controls on dual-use items to Japan are not expected to impact "normal civilian trade," stressing Beijing's commitment to "maintaining the security and stability of the global supply chain" of critical minerals.
Meanwhile, Japanese industry sources said China's Japan-bound exports of magnesium, which is used for aluminum manufacturing, have stalled over the past month. Not only shipments of high-purity products that are on the dual-use item list, but also those not listed have been delayed, they said.
Customs clearance for Chinese exports of alloys to Japan and Japanese shipments of parts to China have also been slow, with additional paperwork required in China, according to the industry sources.
In an apparent response to Takaichi's November comments that suggested Japan could act in the event of coercive measures against Taiwan, China-bound exports of Japanese sake and food items have been delayed.
Tokyo has been making efforts to diversify its critical mineral supply chains, with a Japanese research vessel successfully collecting mud containing rare earth elements from a depth of about 5,600 meters in the Pacific earlier this month.
