Xi Pressures Takaichi by Throttling Key Mineral Exports to Japan

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(Bloomberg) — China is choking shipments of some critical minerals to Japan, a slowdown that’s hurting companies and prompting calls for Prime Minister Sanae Takaichi to find a diplomatic off-ramp with Beijing.

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The world’s No. 2 economy has stopped nearly all supplies of some forms of tungsten this year, while magnet flows last month fell to their lowest since May 2025 when shipments collapsed as China rolled out its export-control regime globally. The throttling of goods began after Takaichi angered Beijing last November with comments about self-ruled Taiwan. 

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The curbs appear calculated to inflict targeted pain on Japan without escalating to a level that could spark pushback from the US. While the measures aren’t as severe as sweeping Chinese restrictions that threatened Japanese industry in 2010, they’ve forced firms to eat into stockpiles and scramble for alternatives. 

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“If this situation continues, of course, we need to have talks with the Chinese government,” Masayoshi Matsumoto, chairman and chief executive officer at Sumitomo Electric Industries Ltd. — a major tungsten buyer — told Bloomberg News on Monday at an industry exhibition in Beijing. “If we’re shut out by China, it’s definitely going to cause problems for Japanese manufacturing.”

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Takaichi doesn’t want to meet President Xi Jinping on the sidelines of a leaders’ summit this November due to frustrations over personal attacks China has directed at her, despite growing pain from the export curbs, according to a person familiar with the discussions. Both leaders are expected to attend the Asia-Pacific Economic Cooperation forum in Shenzhen, although it’s unclear if Beijing would entertain such a sitdown. 

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Japan’s ambassador to China has repeatedly requested meetings with Chinese Foreign Ministry officials without success this year, according to people familiar with the discussions, who asked for anonymity to speak about private matters. Diplomatic contact between Asia’s biggest economies ground to a near halt this year, as Takaichi refuses to retract her remarks and China restricts trade spanning tourism to seafood. 

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China’s Foreign Ministry and Japan’s Ministry of Foreign Affairs didn’t reply to requests for comment. Earlier this month, Takaichi said at a press conference that Japan remains open to dialogue with China and talks were taking place at “various levels.”

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Gaku Hashimoto, a member of Japan’s ruling Liberal Democratic Party, met with China’s Vice Foreign Minister Hua Chunying on the sidelines of the China International Supply Chain Expo in Beijing this week, the Nikkei reported. The Japan Chamber of Commerce and Industry also dispatched a delegation to that event.

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Tokyo’s public response, so far, to Beijing’s mineral squeeze has been to join a Group of Seven pledge to reduce reliance on any one country for rare earths to no more than 60% by 2030. Recycling initiatives, price floors and trade measures are all under consideration, according to Japanese Finance Minister Satsuki Katayama.