Japan Condemns China’s Export Ban on Dual-Use Items

Japan strongly criticized China on Wednesday for imposing a ban on exports of dual-use items, calling the move “absolutely unacceptable and deeply regrettable.” This decision has escalated tensions in the ongoing diplomatic dispute between the two countries. Dual-use items refer to products, software, or technologies that have both civilian and military applications, such as rare earth elements crucial for manufacturing drones and chips.

The conflict started when Japanese Prime Minister Sanae Takaichi stated that a Chinese attack on Taiwan, a democratic nation, could pose an existential threat to Japan. China, claiming Taiwan as part of its territory against the island’s rejection, demanded a retraction of these remarks. With Takaichi refusing to do so, China responded with various countermeasures, including the recent ban targeting dual-use items for military purposes.

Chief Cabinet Secretary Minoru Kihara, Japan’s main government spokesman, expressed grave concerns over China’s actions, emphasizing that the ban specifically aimed at Japan deviated significantly from international norms. He refrained from predicting the impact on Japanese industry, citing uncertainty regarding the specific items that would be affected. Following the ban announcement, Japan’s Nikkei share index saw a decline of about 1% on Wednesday, contrasting the upward trajectory of U.S. and European benchmarks.

Reports from China Daily, a publication linked to the Chinese Communist Party, suggested Beijing’s contemplation of tightening rare earth export license reviews to Japan. Such a restriction could have far-reaching consequences on Japan’s industrial sector, particularly affecting automotive manufacturing. Despite Japan’s efforts to diversify rare earth imports since China’s embargo in 2010, approximately 60% of its supply still originates from China.

Economists warned that even a three-month halt in rare earth exports from China to Japan, similar to the 2010 scenario, could incur significant financial losses, estimated at 660 billion yen ($4.21 billion). A prolonged embargo lasting a year might slash Japan’s GDP by 0.43%. Contrary to these warnings, recent China Customs data indicated no decline in rare earth exports to Japan, showing a 35% growth in November compared to the previous year.

The diplomatic rift following Takaichi’s Taiwan-related comment has led to several retaliatory measures from China, including warnings against traveling to Japan, halting Japanese seafood imports, and canceling bilateral meetings. Despite U.S. President Donald Trump’s attempt to mediate and prevent further escalation, the dispute continues to intensify. Notably, public opinion polls in Japan suggest that Takaichi’s position remains popular among the domestic population.

Analysts draw parallels between this diplomatic impasse and the 2012 dispute provoked by Japan’s nationalization of disputed islands, which fueled anti-Japan protests across China. The current discord, fueled by Takaichi’s remarks, shows no immediate signs of resolution. President Xi Jinping’s apparent displeasure complicates the situation, indicating a potentially protracted standoff between the two nations.