Latest data shows that in the first half of 2026, the export volume of seven controlled rare earth minerals from China to Japan plummeted by 51% compared to the same period last year, with exports of dysprosium and terbium even dropping to zero.
According to the official announcement from the General Administration of Customs of the Communist Party of China on the trade data up to June this year, the Nikkei Shimbun recently analyzed the data, indicating that in the first half of this year, exports of seven controlled rare earth minerals from China to Japan dropped significantly by 51% compared to the same period last year, marking a continuous decline for four consecutive months since March, with a sharper decline of 81% in June. Dysprosium and terbium, which are used in electric vehicle motors, have seen zero exports this year, and exports of yttrium have also significantly declined, dropping to zero in June.
In April 2025, the Ministry of Commerce of the Communist Party of China introduced the rare earth export permit system, implementing export control on seven categories of medium and heavy rare earth-related items including terbium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.
In January of this year, the Communist Party of China tightened its export control on dual-use items to Japan. The list of dual-use items subject to export control includes up to 1,005 items, covering rare earths, chemicals, drones, telecommunications, alloys, nuclear materials, equipment, and technology.
In November 2025, Japanese Prime Minister Souana Takai made remarks on the “Taiwan issue,” causing the Communist Party of China to react strongly by increasing pressure and retaliation against Japan, leading to a deterioration in bilateral relations between China and Japan.
According to reports by the Nikkei Shimbun, sources said that the Communist Party of China’s goal is to precisely control the approval of permits, preventing Japanese companies from completely stopping the procurement of rare earths from China, while using this to encourage the business community to pressure the Japanese government to pay more attention to their relationship with China.
However, in May, the Chinese authorities detained two Japanese employees of a company under the Fuji Electric Group and formally arrested them in late June on suspicion of illegal export of rare earth magnets.
Following a similar action taken in February this year, the Chinese government in June added another 20 Japanese companies and institutions to the export control list for dual-use items.
The President of the China-Japan Chamber of Commerce and Industry and consultant at Panasonic Holdings, Tetsuro Honma, said in July: “There is no doubt that the activities of Japanese companies are under close surveillance.”
Furthermore, in the first six months of this year, exports of the seven controlled rare earth minerals from China to the United States decreased by 28%, and overall global exports dropped by 16%.
Japan has the largest rare earth magnet industry outside of China, but like other countries, it still heavily relies on China for some rare earth raw materials.
The Ministry of Economy, Trade, and Industry of Japan released the 2026 edition of the “White Paper on Trade” in June, stating, “The supply chain of critical minerals and related products is gradually being controlled by a few countries, posing risks to both upstream and downstream industries.” The White Paper also mentioned the need to reduce the use of heavy rare earths through domestic technology and alternative materials, develop motors that do not use or use less rare earths, and improve the efficiency of magnetic materials. Some Japanese companies are already making efforts in this direction, such as in motors and wind power generation, where research is being done on how to reduce the use of rare earths.
The overall assessment of trade between Japan and China in the White Paper is: the economic relationship between Japan and China remains important, but over-reliance on China’s supply chain has become an economic security risk, and Japan needs to reduce its vulnerability while maintaining trade.