Japan has formally protested China’s decision to impose tougher export controls on goods with potential military applications, warning that the move could severely disrupt supply chains and further strain relations between both countries.

China’s Ministry of Commerce announced on Tuesday that it had strengthened export controls on so-called “dual-use” items destined for Japan, with immediate effect. Dual-use goods are products that can be applied for both civilian and military purposes.

Although Beijing did not specify the affected materials, the announcement sparked concerns in Tokyo that China could restrict exports of rare earth minerals — strategic resources critical to advanced manufacturing, defence systems and clean energy technologies.

China is the world’s dominant supplier of rare earths, accounting for the vast majority of global production. Japan, according to the Japan Organization for Metals and Energy, sources more than 70 per cent of its rare earth imports from China.

The latest move comes amid rising diplomatic tensions following remarks by Japanese Prime Minister Sanae Takaichi in November, suggesting that Japan could respond militarily if China attacks Taiwan. Beijing, which claims Taiwan as part of its territory, has repeatedly criticised Japan’s growing military posture.

Reacting swiftly, Japan’s Foreign Ministry summoned Shi Yong, China’s deputy chief of mission in Tokyo, where Masaaki Kanai, Director-General of the Asian and Oceanian Affairs Bureau, lodged a strong protest.

Kanai described the export controls as “absolutely unacceptable,” saying they deviate from international norms and are “deeply regrettable.”

Analysts say the ambiguity of China’s announcement may be deliberate. Global risk consultancy Teneo noted that the wording allows Beijing to apply pressure without immediately inflicting widespread economic damage.

“The impact could range from largely symbolic to highly disruptive,” Teneo said, adding that limited licence rejections could serve as a warning shot to Tokyo while preserving room for escalation.

Economists, however, warned of severe consequences if rare earths are included in the controls. Takahide Kiuchi of Nomura Research Institute estimated that a three-month ban could cost Japan about ¥660 billion ($4.2 billion) and shave 0.11 per cent off its GDP.

He noted that Japan is almost entirely dependent on China for certain rare earth elements such as dysprosium and terbium, which are essential components of electric vehicle motors and advanced electronics.

Japan’s Chief Cabinet Secretary, Minoru Kihara, declined to comment on the possible industrial impact, citing uncertainties surrounding the scope and implementation of China’s measures.

Observers say the development underscores the growing risk of economic tools being weaponised amid escalating geopolitical rivalries in East Asia.

AFP