BEIJING – China has banned the export of dual-use materials to Japan that could be used for military purposes, according to a trade ministry statement on Tuesday, the latest move by Beijing following Japanese Prime Minister Sanae Takaichi’s early November speech on Taiwan.
Dual-use items are goods, software or technology that have both military and military functions, including some rare earth features that are important for making drones and chips.
The export of such items to military users or for any purposes that contribute to Japan’s military power is prohibited, effective immediately, the statement said, adding that organizations or individuals from any country or region that violate the ban will be prosecuted.
Japan’s Foreign Ministry said it strongly opposes these measures and wants China to withdraw them. It called the move “totally unacceptable and deeply regrettable.” It said the measures were aimed only at Japan and that they “deviate significantly from international practices.”
‘FLAMING’ WORDS
Relations between Beijing and Tokyo have deteriorated since Ms Takaichi said a Chinese attack on the democratically-ruled island of Taiwan could be seen as an existential threat to Japan, in remarks Beijing called “offensive.” China considers Taiwan part of its territory, a claim Taipei rejects.
China’s Ministry of Foreign Affairs later questioned Japan’s motives regarding Taiwan, saying that its “provocation” could be a reason to build up its military and overseas missions.
In late December, Japan’s Cabinet approved a record spending package for the fiscal year starting in April, including a 3.8% increase in the annual military budget to 9 trillion yen ($58 billion).
In a statement in December, China’s Xinhua news agency said it was alarming that in recent years Japan has “radicalized” its security policy, increased defense spending every year, loosened restrictions on arms sales, sought to develop offensive weapons and plans to abandon its three non-nuclear goals. China’s annual defense budget has more than doubled over the past decade. Japan reaffirmed its non-nuclear pledge in mid-December.
Beijing’s statement on Tuesday did not specify what items fall under its new restrictions. About 1,100 substances are on China’s export control list of dual-use goods and technology, including at least seven classes of medium and heavy rare earths such as samarium, gadolinium, terbium, dysprosium, and lutetium.
Despite Japan’s efforts to diversify, China still provides about 60 percent of rare earth imports, macroeconomic research firm Capital Economics estimates.
“China has not provided a list of restricted items, so it is currently impossible to say what the impact on exports will be,” an official at Japan’s External Trade Organization told Reuters, asking not to be identified because he was not authorized to speak to the media.
A Japanese government source who spoke on condition of anonymity called the move “symbolic,” adding: “So far, China has avoided doing things that could seriously hurt Japanese businessmen.” By taking this step and causing problems for Japanese industries, it may aim to fuel criticism of Takaichi at home.”
China kicked out rare global shipments to Japan during a previous diplomatic spat more than a decade ago. So far, China Customs data has shown no sign of a decline in abnormal land shipments to Japan, although the data is released with some delays. In November, the most recent month for which data was available, exports grew by 35% to 305 metric tons, the highest figure in the previous year.
FEAR OF RETALIATION
A Chinese state-affiliated social media blog wrote earlier on Tuesday that China is considering tightening the approval of rare earth export licenses in Japan due to Tokyo’s “misbehaviour”, citing sources with knowledge of the matter.
Some analysts and Japanese companies fear that China will retaliate by restricting exports of the rare earth, which is important to Japan’s auto sector, shortly after the diplomatic row erupted in November.
One Japanese private-sector source in Beijing told Reuters on condition of anonymity that it was still taking “a long time” to get export license approvals rare in late November, and that many other Japanese companies were in similar positions. But it is not clear whether that was a direct result of the diplomatic conflict, they warned.— Acts. Reuters
