According to Nanda Morning Post report on August 21st, in July, China's strategic mineral exports to the United States and Japan showed a divergence: there were signs of improvement in exports to the US, while the supply of key materials to Japan significantly declined.
Chinese customs data shows that in July, China's exports of rare earth permanent magnets to the United States increased by 4.6% year-on-year and 32.6% month-on-month; exports of other rare earth oxides to the US increased significantly by 56.8% year-on-year.
Data released on Thursday showed that some smaller categories experienced significant growth due to their lower base numbers. The export volume of industrially synthesized diamond increased by nearly 808%.
In contrast, China’s exports of rare earth magnets to Japan decreased by 52.2% year-on-year, while exports of natural flake graphite plummeted by 62%.
In addition, since February, China's exports of tungsten carbide to Japan have been zero for six consecutive months. Tungsten carbide is a rare metal compound that can be used in both military and civilian products, as well as hard alloy cutting tools.
Reports indicate that Beijing has relaxed some restrictions on the export of key materials to the United States. After the Sino-US trade negotiations, the approval process for exporting rare earths to the US was accelerated, and various export restrictions on materials to the US were suspended in November last year.
However, the exports of key gallium and antimony products, as well as most germanium products, to the United States remain zero or close to zero.
The situation in Japan is quite the opposite. In January this year, China tightened its controls on the export of dual-use items intended for Japanese military users and military purposes. Subsequently, 40 Japanese entities were listed on the export control list.
French foreign exchange bank Natixis's Chief Economist for the Asia-Pacific and Middle East region, Alicia Garcia-Herrero, said that China's recovery of exports to the United States remains limited compared to the levels before the tightening of export controls, especially in the case of rare earth magnets.
"For the United States, this growth is still good, but it cannot be considered impressive."
Garcia-Erella stated that Japan's situation was entirely different. “Japan has felt the pain of China's reduced exports directly.”
She said, “China is trying hard to push Japan into a difficult situation—that’s exactly what you can see from these trade data.”
China is likely to continue providing substantial but limited-scale critical raw materials to the United States, while continuing to implement restrictions on supplies to Japan.
The Chinese Ministry of Foreign Affairs has repeatedly emphasized that China, in accordance with laws and regulations, prohibits the export of all dual-use items to Japan's military users and for military purposes. The purpose is to prevent Japan from becoming militarized again and pursuing nuclear ambitions. China's position on maintaining the stability and security of the global supply chain for key minerals remains unchanged.
