The Strategic and Security Implications of Rare Earths

Patrolling near the contested Islands of Senkaku/Diaoyu in the East Asian Sea on 8 September 2010, a Japanese Coast Guard crew detained the captain of a Chinese fishing boat whose crew was plying their trade near the Islands claimed as Japanese territory. The waters around these contested islands contain rich fishing grounds in addition to potentially large deposits of oil and natural gas. The fishing boat captain was taken to Japan. Meanwhile, the Chinese government vehemently protested, and, ultimately, the fishing boat captain was returned to China, 16 days later on, 24 September 2010. During the 16-day diplomatic imbroglio between China and Japan and, it would appear, as part of an effort to increase pressure on Japan to release the Chinese fishing boat captain from custody, the government of China, on 10 September 2010, ceased rare earth metals exports to Japan. This action led to substantial distress within the tight knit circles of Japanese government and business elites owing to Japan’s absolute dependency on rare earth imports from China to feed its production of high technology products on which its economic model is based. In effect, China, in combination with other forms of diplomatic pressure, used rare earths as a bludgeon to forcibly coerce Japan into aligning its policy with Chinese interests or suffer economic hardship.