Japan strongly condemned China's ban on exports of dual-use goods intended for Japanese military applications, calling the decision "absolutely unacceptable." This measure comes amid rapidly deteriorating relations between the two largest Asian economies, fueled by diplomatic tensions over Taiwan.
These dual-use goods include products, software, and technologies that can be used for both civilian and military purposes, including certain critical minerals used in the manufacture of drones and semiconductors. Tokyo believes that Beijing's decision, announced this week, deviates significantly from international practice and is specifically targeting Japan.
The dispute originated from a statement by the Japanese Prime Minister. Sanae Takaichiwho had asserted that a potential Chinese attack on Taiwan could pose an existential threat to Japan. China, which considers Taiwan an integral part of its territory, demanded the retraction of these remarks, without success, before announcing a series of countermeasures.
Beyond the current ban, Beijing is reportedly considering tightening restrictions on rare earth exports to Japan, according to Chinese state media. Such a move would pose a major risk to the Japanese economy, particularly its automotive industry and high-tech sectors, which are heavily reliant on these essential materials.
Despite efforts over the past decade to diversify its supplies, Japan still imports approximately 60% of its rare earth elements from China. For certain heavy rare earth elements, used particularly in magnets for electric and hybrid vehicle motors, this dependence is almost total, according to industry analysts.
Japanese financial markets reacted nervously to the announcement of the restrictions, with several major industrial companies posting significant declines. Economists believe that a prolonged limitation on Chinese rare earth exports could cost Japanese companies hundreds of billions of yen and weigh heavily on growth for the long term.
Faced with this escalation, Tokyo has hinted that it might consider retaliatory measures if Chinese restrictions were to extend to civilian businesses. Beijing, for its part, maintains that its decisions are aimed at defending its sovereignty and strategic interests, suggesting a long-term dispute between the two countries.
