The Chinese Customs Administration announced data on Monday (July 20) showing that in June, China did not export any gallium, dysprosium, terbium, or yttrium to Japan. This situation worsened compared to May, indicating that the critical mineral supply tension between Japan and China due to diplomatic friction has not eased. The Japanese government’s 2026 version of the “White Paper on Trade” released in June also analyzed China’s rare earth export controls and their impact on the supply chain.
On Monday, the Chinese Customs Administration released China’s export data for June, showing zero exports of gallium, dysprosium, terbium, or yttrium to Japan. The export of these products has been at extremely low levels for several months. In contrast, the data released by the Chinese Customs Administration on May 20 showed that there were almost no exports of dysprosium and terbium in May, only a very small amount of yttrium exports, and gallium resumed its first exports in several months. Additionally, in May, China exported 123 tons of rare earth magnets to Japan, a decrease of 34.6% from the 188 tons in April, reaching the lowest level since May 2025.
Japan has the world’s largest rare earth magnet industry outside of China, but like other countries, it still heavily relies on China for some rare earth raw materials. In the 2026 version of the “White Paper on Trade” released by Japan’s Trade Policy Bureau in June, it was stated: “Supply chains of critical minerals and related products are gradually being controlled by a few countries, posing risks to both upstream and downstream industries.”
The White Paper later listed the export control orders issued by the Chinese government since February 2025:
In February 2025, the Chinese Ministry of Commerce and other export control authorities issued a notice to implement export controls on related items such as tungsten, tellurium, molybdenum, bismuth, indium, etc.;
In April 2025, the Chinese Ministry of Commerce issued another notice announcing export controls on seven types of medium and heavy rare earths, including dysprosium, terbium, yttrium, and related magnetic materials;
In October 2025, China further expanded the scope of control, adding five rare earth elements including lutetium, erbium, thulium, ytterbium, and yttrium and their related materials to the control list, and included overseas related rare earth items and re-exports in management. It required products containing specific rare earths from China sources, even if manufactured in a third country, may require Chinese approval;
In January 2026, the Chinese Ministry of Commerce strengthened export controls on related dual-use military and civilian materials to Japan;
In February 2026, China listed some Japanese companies in the control list and watch list. Subsequently, when exporting controlled items to Japan, approval for export must be applied for according to Chinese regulations, and the Chinese government may decide whether to approve exports based on the final use, end-user, and list of companies.
In February last year, the Chinese government began to control rare earth exports due to the escalating tensions in US-China technology and trade disputes.
In November last year, Chinese Premier Tadamasa Machida’s remarks in parliament that “a situation where something happens in Taiwan may constitute a crisis of survival for Japan” caused a strong reaction from China. It immediately increased restrictions on rare earth exports to achieve the goal of hitting Japan’s economy.
The White Paper pointed out: “Supply chain risks have entered an era sufficient to influence a country’s economy.”
The White Paper then discussed the impact of China’s control of the supply chain on Japan, stating: “China has a significant influence on the global value chain, hence there are supply chain risks such as interruptions. It is crucial to establish international rules to reduce supply chain risks and ensure trade stability.”
Regarding how to develop rare earth sources, the White Paper proposed establishing multi-source supply and building supply chains with countries that have common rules and political stability, including other G7 countries (USA, UK, France, Germany, Italy, Canada), Australia, Southeast Asian countries, India, and other resource-rich countries.
The White Paper also suggested cooperation with resource-rich countries, particularly emphasizing mining development, refining capacity, processing technology, and investment cooperation. The charts listed in the White Paper show that China has a very high proportion in the refining process of many important minerals, which is a concern for Japan.
Furthermore, the White Paper emphasized recycling, a concept that Japan has always stressed in its resource strategy: the idea of “urban mining” – treating waste products in cities as mines and recovering valuable metals from them, rather than relying solely on new mining.
Specifically for rare earths, it involves recovering rare earths from old electronic products (e.g., old phones, motors, industrial machinery) to increase material recycling rates and reduce reliance on new mines.
The White Paper also mentioned using domestic technology and alternative materials to reduce the use of heavy rare earths, developing motors that do not use or use less rare earths, and improving the efficiency of magnet materials. Some Japanese companies are already making efforts in this direction, such as in wind motors and wind power generation, researching how to reduce the use of rare earths.
The overall assessment of Japan-China trade in the White Paper is that while the economic relationship between Japan and China remains important, over-reliance on China’s supply chain has become an economic security risk, and Japan needs to reduce its vulnerability while maintaining trade.