In case you missed it, China and Japan are currently having a political spat over a Chinese ship captain detained by Japan.
There has obviously been much friction between the two nations before, but what’s shocking about this incident is there have been reports that China restricted rare earth metal exports to Japan in response.
Today the Chinese government is denying the story:
“China does not have a trade embargo on rare earth exports to Japan,” Ministry of Foreign Trade and Economics Co-operation spokesman Chen Rongkai said in a telephone interview today. Industrial Minerals Co. of Australia, an industry publication and consultancy, first reported the ban yesterday, citing an unidentified “leading Japanese rare earth buyer.”
“The Chinese government has requested exporters to demonstrate support for the Chinese situation and suspend exports of rare earths to Japan until the end of the month when the situation will be reviewed,” said Industrial Minerals owner and former mining executive Dudley Kingsnorth. “It’s very regrettable if we have the effective suspension of commercial contracts for political reasons.”
Rare earth metals are crucial for many of the latest technology products, from compact batteries to U.S. military hardware, yet China holds a near monopoly over their production right now.
Whether or not the story of export restrictions is true, even just the suggestion of it happening highlights the chokehold China has over other nations’ industries via its rare earths production.
This is especially troublesome given that rare earths aren’t like food. If a nation restricts food to another, then there would obviously be a global uproar. China could probably get away with a temporary halt in rare earth exports, as a political tool, without incurring much economic damage to itself or political outrage globally. Yet just six months of restrictions would likely deal a serious blow to foreign tech industries dependent on rare earths.