Japan Asks China To Resume “Rare Earth” Exports
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The Japanese trade minister urged China on Sunday to restart exports of crucial minerals known as rare earths
that both traders and government officials say have been blocked for the past month amid a territorial dispute between the countries.
The trade minister, Akihiro Ohata, also quoted a top Chinese official as acknowledging that customs officials had stepped up inspections of all rare-earth shipments from China.
The Japanese trade minister urged China on Sunday to restart exports of crucial minerals known as rare earths
that both traders and government officials say have been blocked for the past month amid a territorial dispute between the countries.
The trade minister, Akihiro Ohata, also quoted a top Chinese official as acknowledging that customs officials had stepped up inspections of all rare-earth shipments from China.
Industry officials said last week that China had quietly halted some shipments of the materials to the United States and Europe, despite denials from Beijing of an official embargo.
Mr. Ohata said he had pressed the Chinese vice minister of commerce, Jiang Yaoping, to normalize rare-earth shipments.
Mr. Jiang responded that he would “make efforts to ensure the situation will not adversely affect the economies of Japan and China,” Mr. Ohata said.
Chinese custom officials have blocked shipments of rare-earth metals to Japan since Sept. 21,
after the Japanese coast guard arrested a Chinese fishing boat captain near disputed islands in the East China Sea.
Japan has since released the captain, but tensions still run high between the countries.
Anti-Japanese rallies have taken place in Chinese cities over the past two weeks, with hundreds of protesters demanding that Japan drop its claim to the islands.
Protesters attacked Japanese shops and businesses in some cities, prompting Tokyo to demand that China do more to ensure the safety of Japanese citizens there.
Meanwhile, the halt of shipments to other markets is certain to intensify already rising trade and currency tensions with Western nations.
Industry officials said Chinese customs officials had imposed the broader restrictions Oct. 18,
hours after a top Chinese official summoned the international news media to denounce U.S. trade policy.
As of Sunday afternoon, Chinese customs officials were still blocking all exports of raw rare earths,
although there have been no restrictions on the export of value-added rare earth products
like powerful magnets, computer screen components and special glass polishes, industry officials said.
Though many of the minerals are not particularly rare,
most global production of rare earths has moved to mainland China over the last two decades because of lower costs.
China now mines 95 percent of the world’s rare earth elements, which have wide commercial and military applications
and are vital to the manufacture of products like cellphones, motors for electric vehicles, large wind turbines and guided missiles.
But to the alarm of its trading partners, China imposed increasingly tight export quotas on rare earths in the past two years,
citing growing domestic demand and environmental concerns.
In July, Beijing reduced its export quota for rare earths for the second half of the year by 72 percent.
Exporters had only six weeks’ worth of quotas left when Chinese customs officials imposed an unannounced embargo on shipments to Japan by stopping all shipments for additional inspections,
a practice that has extended in the past six days to shipments elsewhere as well.
Beijing has continued to deny that any embargo exists.
Industry executives and analysts say China could be trying to make it more difficult for other countries to bring a case against Beijing at the World Trade Organization.
The U.S. Congress is considering legislation to provide loan guarantees for the re-establishment of rare-earth mining and manufacturing in the United States,
according to this article in the New York Times.
But new mines are likely to take three to five years to reach full production, according to industry executives.
Meanwhile, resource-poor Japan is racing to help develop rare-earth mines in other countries,
although they could take several years to dig, and to increase efforts to recycle the minerals from used electronics.
Mr. Ohata said last week that Japan was seeking an agreement with Vietnam for the joint development of rare-earth materials.
