China rare earth product exports fall as Japan spat draws focus

China’s rare earth product exports declined in December compared with the previous month, as investors monitor heightened tensions between Beijing and Japan that could trigger tighter shipment controls.

Outbound flows of the materials — used in electric vehicles, weapons systems and high-tech manufacturing — totaled 6,745 tons, down from 6,958 tons in November, according to customs data released on Sunday. The category is largely dominated by rare earth magnets, a product that’s provided China with critical leverage in a series of trade disputes that have jolted markets.

Rare earths have emerged as a flash point in trade relations in recent years, with the US and other nations seeking to challenge China’s dominance of their mining and processing. Although Beijing and Washington reached a trade truce in October, easing strains, attention has since shifted to Japan after China’s Ministry of Commerce announced controls on shipments to the country with potential military applications. The announcement followed remarks made last year by Japan’s prime minister over Taiwan.

Beijing is also mulling stricter scrutiny of the licenses to ship the minerals to the country, the China Daily reported, following the ministry’s statement.

The export figures released on Sunday cover shipments to all destinations and do not provide a breakdown by geography or product type. More detailed data is expected on Tuesday.

(By Jessica Zhou)