[Correspondent's Column] 15 Years After the Senkaku Collision, Japan Faces Another Rare Earth 'Nightmare'

July 2010. Two months before a Chinese fishing vessel intentionally collided with a Japan Coast Guard (JCG) patrol ship near the Senkaku Islands (known as Diaoyu Dao in China), escalating tensions between China and Japan, Tsutomu Murasaki, Director of Non-Ferrous Metals, rushed into the office of Masanori Suzuki, Director-General of the Manufacturing Industries Bureau at Japan’s Ministry of Economy, Trade and Industry. "China is planning to cut its exports of Rayearth (rare earth elements) to Japan by as much as 70%," he reported.
At that time, Japan depended on China for 90% of its rare earth supply. Recognizing the gravity of the situation, then Minister of Economy, Trade and Industry Masayuki Naoshima repeatedly appealed to China for leniency during the Japan-China High-level Economic Dialogue in August 2010. However, the Chinese side dismissed the issue, saying, "This is a high-level dialogue, so let's not discuss such trivial matters."
Director Suzuki also visited China in person to request a reversal of the measures, but was rebuffed with reasons such as 'domestic demand has surged, leaving no room for exports' and 'environmental destruction at mining sites is severe.' The following month, in September 2010, a Chinese fishing vessel collided with a JCG patrol ship, leading to the arrest of the Chinese captain. China immediately imposed a complete halt on rare earth exports to Japan. Reflecting on the incident, Suzuki later remarked, "The more we emphasized our difficulties, the more it exposed our vulnerabilities and made us a target for (China's) attacks."
Fifteen years later, in January 2026, Japan was once again struck by China. This time, the issue extended beyond rare earths to a broader range of 'dual-use (civilian and military) items' subject to export controls. After Prime Minister Sanae Takaichi publicly mentioned the possibility of Japan's involvement in a Taiwan contingency, the Chinese government, which had persistently demanded a retraction, announced new export control measures on dual-use items without warning on the 6th, three months later. The list included seven rare earth elements such as Samarium (Sm), Gadolinium, Terbium, Dysprosium, and Yttrium, as well as certain parts for semiconductor manufacturing equipment, high-performance materials, and advanced chemical products. The use of administrative and technical regulations, rather than formal sanctions, to apply pressure at a moment of heightened diplomatic tension, was strikingly reminiscent of the 2010 rare earth crisis.
Immediately after the announcement, Japanese government officials expressed that they had been caught off guard once again. There had been no prior notice or warning. The strategy of applying pressure through technical and administrative regulations, rather than official sanctions, closely mirrors the rare earth crisis of 2010.
Diplomatic circles assess that 'China struck Japan at the perfect moment.' With President Donald Trump of the USA facing unfavorable circumstances ahead of the midterm elections in November and preparing to visit China in April as part of his 'China management' strategy, analysts believe China seized the opportunity to target Japan over the Taiwan issue.
The situation is even more disadvantageous than it was 15 years ago. After China halted rare earth exports to Japan in 2010, Japan promoted diversification of its rare earth supply in the name of economic security. Although its dependence on China, which was nearly 90% at the time, has dropped to 60%, it remains high. In particular, China still nearly monopolizes the production of heavy rare earth elements, which are essential for the defense industry and High-tech Industry among the 17 rare earth elements.
Fifteen years ago, China gradually eased rare earth export restrictions on the condition that Japanese companies manufacture permanent magnets and other products locally in China. This time, however, even that option is not easily available. Chinese companies, which once had only resources but lacked technology, now dominate 80% of the global permanent magnet market. Japan, once a leader in key components, has lost its edge and missed out on leadership in the era of Electric Vehicles (EVs).
This situation raises uncomfortable questions for South Korea as well. South Korea also has a high dependence on specific countries for key materials in batteries, semiconductors, and Electric Vehicles (EVs). As of 2023, 60% of South Korea's rare earth raw material imports and 89% of its rare earth materials and parts imports come from China. South Korea, which was once strong in processing and technology, is now losing its competitiveness, much like Japan. What will South Korea rely on to endure?
sjmary@fnnews.com Reporter