BEIJING (Kyodo) — A group representing Japanese businesses in China on Thursday urged Beijing to enhance transparency in its implementation of export controls on dual-use items that are believed to include rare earths, saying the measures have even affected items “purely for civilian purposes.”
Tetsuro Homma, head of the Japanese Chamber of Commerce and Industry in China, said the tighter Chinese export curbs introduced earlier this year amid a Tokyo-Beijing diplomatic row have resulted in rare-earth supply shortages in Japan, causing trouble to many companies.
In February, China banned exports of items which can be used for both civilian and military applications to 20 Japanese defense-related entities, while adding 20 other Japanese companies and organizations to an export watchlist, subject to stricter screenings.
China dominates the global supply of rare earths, which are essential for manufacturing high-tech products ranging from electric vehicles to weapons.
The Chinese Commerce Ministry has said only a small number of Japanese entities are targeted by the export curbs, and “normal economic and trade exchanges” between the two Asian countries will not be affected. The ministry also explained that the steps aim to curb Japan’s “remilitarization” and nuclear ambitions.
“Unfortunately, we have received reports from some companies that they could not smoothly obtain” export licenses for rare-earth items, Homma told a press conference, held to release the chamber’s white paper calling for improved business conditions in China.
As China approves exports of rare-earth items to countries other than Japan, companies have been “adjusting their supply chains so they can continue” manufacturing related products, added Homma, who also serves as executive vice president of Panasonic Holdings.
Beijing has been increasing economic pressure on Tokyo since Japanese Prime Minister Sanae Takaichi’s parliamentary remarks last November that suggested an attack on Taiwan, a self-ruled democratic island claimed by China, could trigger a response by Japan’s Self-Defense Forces.