China slaps export controls on Japan military for Taiwan remarks

• China bans dual-use exports to Japan over Taiwan comments
• Japan relies on China for 70% of rare earth imports as of 2024
• China's move may impact Japan's military and tech sectors over time

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China imposed controls on exports to Japan with any military use, intensifying a dispute between Asia’s top economies over remarks Japanese Prime Minister Sanae Takaichi made last year on Taiwan.

All dual-use items are banned from being exported to Japan for military use effective immediately, China’s Ministry of Commerce said in a statement Tuesday. Exports “for any other end-user purposes that could enhance Japan’s military capabilities” are also prohibited, it added, without elaborating.

“Japan’s leader recently made erroneous remarks on Taiwan, hinting at the possibility of military intervention in the Taiwan Strait,” a ministry spokesperson said in a statement. Those comments violated the One-China principle and were of “malicious nature with profoundly detrimental consequences,” according to the spokesperson.

Futures contracts on Nikkei 225 slid by about 1% after the news.

Squeezing rare earths supplies has long been raised as one potential avenue for Beijing to pile pressure on Tokyo, especially after China used its dominance of the industry last year to stare down US tariffs.

But the latest ban goes far beyond such metals. China’s dual-use export control list features more than 800 items, ranging from chemicals, electronics and sensors to equipment and technologies used in shipping and aerospace.

An official from the trade and economic security bureau in Japan’s Trade Ministry declined to comment, saying the bureau was assessing the situation. It wasn’t immediately clear whether the curbs were largely symbolic or would have a significant impact on Japan.

The wording of the curbs is vague enough that it theoretically means China could hit Japanese imports “even if they were for civil use,” said Dylan Loh, associate professor at Nanyang Technological University. “Whether they actually do that is a separate question.”

The export controls mark China’s latest move in a pressure campaign against Japan, after Takaichi became her nation’s first sitting leader to say Tokyo could deploy its military if Beijing attempted to seize self-ruled Taiwan. She has since refused to retract those comments, maintaining that her country’s policy remains unchanged.

China’s measures also came during South Korean President Lee Jae Myung’s visit to Beijing, where Chinese leader Xi Jinping urged him this week to stand on the right side of history. Both US allies — Japan and South Korea — have previously aligned with Washington in providing a counterbalance to Chinese economic and military might in the region.

China restricted exports of rare earth elements (REE) in global measures rolled out last year during US President Donald Trump’s trade war. Rare earths and the magnets made from them are used heavily by militaries in weapons like fighter jets, drones and missiles, and are also critical for manufacturing goods such as smartphones and electric vehicles.

Among the measures China is now considering with regard to Japan: tighter export license reviews for certain medium and heavy rare earth–related items, state-run China Daily reported on Tuesday, citing an unidentified person. The move would affect goods Beijing placed under export controls last year, the report said.

Japan relied on China for around 70% of its rare earth imports as of 2024, according to the Japan Organization for Metals and Energy Security. That was more than a decade after China had wielded the materials as a weapon against Tokyo during a 2010 territorial dispute. At that time, the Chinese move wreaked havoc across Japan’s manufacturing industry.

Insufficient Stockpile

While Tokyo took steps to reduce Chinese dependence, “these are not enough as Japan still relies on China for REE and other precursor materials needed for production of military and civilian technology,” said Becca Wasser, defense lead for Bloomberg Economics.

Japan’s existing stockpile of reserves means China’s measures may take time to have an impact, Wasser added. But “it is impossible to stockpile enough raw material to service all sectors — let alone the defense sector by itself.”

Tuesday’s public announcement from Beijing — with its narrower focus on supplies to the military — appears to fall short of the kind of sweeping ban that was enforced back in 2010, however.