Tension Rises As China Stops Crucial Exports to Japan

http://www.allvoices.com/contributed-news/6830166-tension-rises-as-china-stops-crucial-exports-to-japan

Chinese government has blocked exports of rare minerals used in products like hybrid cars, wind turbines and guided missiles to Japan.

Industry officials said that local customs officials began stopping shipments to Japan of so-called rare earth elements, preventing them from being loaded aboard ships this week at Chinese ports. News agencies reported that ministry spokesman, Chen Rongkai, had denied that any embargo had been imposed.

Prime Minister Wen JiabaoWen Jiabao personally called for Japan’s release of the captain on Tuesday, who was detained after his vessel collided with two Japanese Coast Guard ships about 40 minutes apart as he tried to fish in waters controlled by Japan but long claimed by China. Mr. Wen threatened unspecified further actions if Japan did not comply.

The New York TimesThe New York Times pointed out that any publication of government regulations or other official pronouncements barring exports would allow Japan to file an immediate complaint with the World Trade Organization, claiming a violation of free trade rules. But an administrative halt to exports, by preventing the loading of rare earths on ships bound for Japan, is much harder to challenge at the W.T.O.

Japan has been the main buyer of Chinese rare earths for many years, using them for a wide range of industrial purposes, like making glass for solar panels. They are also used in small steering-control motors in conventional gasoline-powered cars as well as in motors that help propel hybrid cars like the Prius.

American companies rely mostly on Japan for magnets and other components using rare earth elements, as the United States’ manufacturing capacity in the industry became uncompetitive and mostly closed over the last two decades.

China and Japan, the giants of Asia, account for nearly three-quarters of the region's economic activity and more than half of the region's military spending. Despite their deep economic ties and a doubling of their bilateral trade in the past five years, their relationship is increasingly strained, with dangerous implications for the United States and the world at large.

Although Japan and China have close economic ties, their diplomatic relations have been strained by clashing interests and cultural friction. The United States has an important role to play in promoting cooperation between Tokyo and Beijing and helping them adjust to a new phase in East Asia's history.