China bans exports of dual-use items, rare earths to Japan

China has banned exports of dual-use items to Japan that can be used for military purposes, marking the latest response to tensions sparked by Tokyo.

The Chinese Ministry of Commerce announced on Tuesday that exports of goods, software, and technologies with both civilian and military applications, such as certain rare earth elements crucial for drones and semiconductor production, will be prohibited to Japanese military users or for purposes that could enhance Japan’s military capabilities.

The Ministry warned that any organizations or individuals violating the immediate ban would face legal consequences.

The move comes after Japanese Prime Minister Sanae Takaichi stated that Chinese military action in Taiwan would be an existential threat to Japan and could trigger Japanese intervention.

Beijing denounced those remarks as provocative, reminding Tokyo of China’s sovereign claims over the island of Taiwan.

Relations between the two nations have been further strained by Japan’s recent defense policy shifts. In late December, the Japanese cabinet approved a record fiscal package that included a 3.8% increase in its military budget to 9 trillion yen ($57.7 billion). China has repeatedly criticized Japan for steadily increasing defense spending, relaxing arms export restrictions, and pursuing offensive weapons programs, as well as for considering abandoning its three non-nuclear principles.

China previously restricted rare earth exports to Japan during a diplomatic dispute more than a decade ago.
Key dual-use items and Japan’s options
The most critical items targeted by China’s ban are rare earth elements and advanced technology components, including drone navigation systems, aerospace engine parts, and specialized alloys essential to Japan’s defense and high-tech industries. Japan’s heavy reliance on Chinese processing, about 70% of its rare earth imports in 2024, limits its immediate ability to respond to the measures.

Japan’s rhetoric highlights a recurring pattern among US-aligned governments issuing aggressive stances toward China, only to confront Beijing’s dominance in critical sectors that underpin military and high-tech capabilities.

In the short term, Japan faces significant constraints. Even with alternative mining or sourcing, China controls 85–90% of global rare earth refining capacity, creating a bottleneck that cannot be bypassed quickly.

In the West, longer-term strategies are already underway. Japan is diversifying suppliers with countries such as Australia, India, Vietnam, and Kazakhstan, while test drilling for deep-sea rare earth deposits off Minamitorishima is set to begin this month. Commercial extraction, however, is unlikely before 2028. Additionally, Japan and the United States are collaborating to secure critical mineral supply chains and invest in processing facilities outside of China, hoping to reduce dependence on Beijing in the years ahead.