China considering tightening exports of certain rare earths to Japan

China is considering tightening export permit reviews for certain rare earth–related items to Japan, in response to Japanese Prime Minister Sanae Takaichi's recent erroneous remarks on China's Taiwan and her continued refusal to retract them, a source familiar with the matter told China Daily.

On April 4, China's Ministry of Commerce, along with the General Administration of Customs, announced export control measures for seven categories of medium and heavy rare earth–related items, namely samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

At a news conference in December, He Yadong, spokesman of the Ministry of Commerce, stated that Japanese Prime Minister Sanae Takaichi had recently made erroneous public remarks concerning China's Taiwan, which severely undermined the political foundation of China-Japan relations, and that Japan bore unshirkable responsibility for this.

He emphasized that China has repeatedly clarified its solemn position and urged Japan to immediately correct its wrong words and actions, demonstrate its commitment to China through concrete actions, and create conditions for normal economic and trade cooperation between the two countries.

Should Japan persist in going down the wrong path, China will take necessary measures, and Japan must bear full responsibility for all consequences arising therefrom, He said.

According to Nomura Research Institute, heavy rare earths such as dysprosium and terbium, used in neodymium magnets for electric vehicle motors, are almost 100 percent sourced from China. Any restrictions on these supplies would pose significant challenges to the Japanese economy as noted by the institute.

The institute estimates that if China's restrictions on rare earth exports to Japan were to last for three months, it would result in losses of about 660 billion yen ($4.2 billion), reducing nominal and real GDP by 0.11 percent annually. If the restrictions continued for a year, losses could reach about 2.6 trillion yen, leading to a 0.43 percent decline in both nominal and real GDP.

wangkeju@chinadaily.com.cn