China curbs rare earth exports to Japanese companies after dual-use ban

China has begun restricting exports to Japanese companies of rare earths and powerful magnets containing them, the Wall Street Journal reported on Thursday (Jan 8), after Beijing banned exports of dual-use items to the Japanese military.

China’s rare earths restrictions apply broadly across Japanese industries and are not limited to the defence industry, the Journal said.

China’s commerce ministry said on Thursday the export ban on dual-use items to Japan will only affect military firms.

“Civilian users will not be affected,” He Yadong, a commerce ministry spokesperson, told reporters.

China’s broad ban on the export to Japan of so-called dual-use goods with potential military applications was announced on Tuesday.

The Chinese foreign ministry defended the ban as legitimate, reasonable and lawful.

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“China’s commitment to maintaining the stability and security of global industrial and supply chains remains unchanged,” the ministry said in response to a Reuters request for comment.

The Wall Street Journal reported that since Tuesday, China began restricting exports to Japanese companies of “heavy” rare earths, as well as the powerful magnets containing them, citing two exporters in China.

The Journal cited another unnamed person familiar with Chinese government decisions as saying the review of applications for export licences across Japanese industry has been halted and does not only target Japanese defence companies.

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Dual-use items are goods, software or technologies that have both civilian and military applications. They include certain rare earth magnets that power motors in car parts such as side mirrors, speakers and oil pumps.

Reuters could not immediately confirm the Wall Street Journal report. China’s commerce ministry did not immediately respond to Reuters requests for comment on the Journal report.

Ties between Beijing and Tokyo have deteriorated since Japanese Prime Minister Sanae Takaichi said in November that a Chinese attack on Taiwan threatening Japan’s survival could trigger a military response, a remark that Beijing said was “provocative”.

China has an export control list of around 1,100 dual-use items and technologies that manufacturers require a licence for to ship overseas, wherever the end user may be. REUTERS

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