China’s growing tensions with Japan have sparked new concerns in global technology and defense industries, as signals from Beijing suggest that President Xi Jinping may consider restricting or cutting off rare-earth exports to Japan. Such a move—echoing China’s 2010 export halt during a similar diplomatic crisis—could trigger profound consequences for global supply chains, advanced manufacturing, and geopolitical stability.
Rare earths are essential components for everything from electric vehicles and wind turbines to smartphones, guided missiles, and advanced semiconductors. With China controlling more than 60% of global production and an even larger share of processing capacity, any weaponization of rare-earth supply would send shockwaves across industrialized economies.
Analysts warn that China may achieve immediate political pressure on Japan, but at enormous long-term cost: a global push toward diversification, accelerated industrial decoupling, and international blowback that could weaken Beijing’s influence over critical minerals. 
A Strained China–Japan Relationship Reaches a Critical Point
Diplomatic tensions between China and Japan have intensified in recent years due to:
- Japan’s increasing security cooperation with the United States
- Tokyo’s involvement in supply-chain “friend-shoring” initiatives
- Disputes over the East China Sea, particularly the Senkaku/Diaoyu Islands
- Japan’s restrictions on advanced semiconductor equipment exports to China
- Broader alignment between Japan and Western democracies on China policy
For Beijing, Japan’s growing integration into a U.S.-led strategic architecture is an unwelcome development. Rare-earth retaliation may be seen by Chinese policymakers as leverage—just as it was during the 2010 incident after a maritime clash near the disputed islands.
But the international landscape in 2025 is far more complex, and the consequences far more severe.
Why Rare Earths Matter: The Backbone of Modern Technology
Rare-earth elements—including neodymium, dysprosium, terbium, lanthanum, and others—are indispensable to the global technology ecosystem. They are used in:
- Electric vehicle motors
- Smartphones, laptops, and advanced displays
- Stealth technology and precision-guided weapons
- Semiconductor manufacturing
- Wind turbine generators
- Nuclear batteries and satellite systems
Japan is a major importer and one of the world’s largest manufacturers of rare-earth magnets—core components of advanced electronics.
Cutting off Japan would therefore disrupt not only Japanese industry, but global production networks supplying the U.S., Europe, South Korea, Taiwan, and Southeast Asia.
China’s Calculus: Leverage Versus Long-Term Loss
China has often used economic tools for geopolitical pressure—tariffs, embargoes, cybersecurity probes, and market-access restrictions. Rare earths, however, are a unique case: they are one of Beijing’s most powerful, but also most fragile, coercive instruments.
The Potential Benefits (Short-Term):
- Punish Japan for aligning with the U.S. semiconductor restrictions.
- Create immediate economic pain for Japan’s high-tech sectors.
- Demonstrate China’s willingness to use strategic commodities as leverage.
- Attempt to deter other Asian countries from deepening U.S. security ties.
But these gains pale compared to the potentially immense long-term costs.
The Global Blowback China Risks
1. A Worldwide Race to Replace China in Rare Earths
If China restricts exports, the rest of the world will accelerate efforts to:
- Expand mining in the U.S., Australia, Canada, and Africa
- Invest heavily in rare-earth processing plants outside China
- Develop recycling and substitution technologies
- Build stockpiles and strategic reserves
After the 2010 embargo, Japan, the U.S., and Australia invested heavily in non-Chinese rare-earth projects—progress that would intensify massively under new pressure.
2. Strengthening U.S.-Japan Security Ties
Far from driving a wedge between Tokyo and Washington, Chinese coercion would push the two even closer. The U.S. would:
- Increase defense coordination with Japan
- Expand mineral supply-chain partnerships
- Strengthen sanctions or export controls on China
- Encourage other G7 partners to join a unified response
Beijing would be undermining its own regional objectives.
3. EU and Indo-Pacific Partners Would Turn Against China
If China cuts off rare earths to Japan, European and Asian allies—fearful they will be next—will:
- Accelerate diversification away from Chinese suppliers
- Strengthen anti-coercion frameworks
- Consider reciprocal trade and technology restrictions
Countries like South Korea, India, Vietnam, Germany, and France would reassess their economic dependencies.
4. Massive Damage to China’s Global Reputation
Weaponizing rare earths would reinforce global narratives that China cannot be a trusted supplier and poses systemic risks to supply-chain stability.
Multinational companies might:
- Shift manufacturing away from China
- Reduce exposure to Chinese markets
- Lobby for Western government intervention
The long-term reputational damage could be irreversible.
5. Rare-Earth Dominance Could Ultimately Slip From China’s Hands
China’s rare-earth advantage depends not only on resources but on global market dependence. If countries invest massively in alternatives, China’s dominance will diminish—and Beijing will lose leverage permanently.
Japan’s Likely Response: Resilience and Rapid Diversification
Japan is far more prepared today than it was in 2010. Over the past 15 years, Japan has:
- Built joint ventures with Australia’s Lynas Rare Earths
- Invested in supply chains in Vietnam, India, and Africa
- Strengthened recycling capabilities for rare-earth magnets
- Diversified sources of key inputs across multiple continents
- Built strategic reserves for critical minerals
A Chinese cutoff would hurt—but it would not cripple Japan as before.
Tokyo would also respond diplomatically, likely coordinating with the U.S. and G7 to impose retaliatory measures.
The Broader Geopolitical Context: A Fragmenting Global Economy
The rare-earth confrontation sits within a larger trend of geopolitical decoupling:
- The U.S. has imposed sweeping chip and AI export controls.
- China is promoting self-reliance under “dual circulation.”
- Supply chains are shifting to India, Vietnam, and Mexico.
- Multinationals are reducing exposure to China.
- The Indo-Pacific is becoming the center of U.S.–China rivalry.
A rare-earth cutoff would accelerate global fragmentation, reshaping trade, investment, and technological development.
Conclusion: China Risks Strategic Self-Harm by Weaponizing Rare Earths
If President Xi chooses to cut off rare-earth exports to Japan, the world will view it as an unmistakable sign that China is willing to politicize critical-mineral supply chains. While Beijing may exert short-term economic pressure, the global response could permanently undermine China’s influence over rare-earth markets and weaken its strategic position.
In attempting to punish Japan, China would likely provoke a far broader international backlash—uniting democratic allies, accelerating decoupling, and pushing the world toward a new era of strategic mineral competition.
In the long run, the rare-earth weapon may be powerful—
but using it could cost China far more than it gains.
