Japan's Trade Minister Makes First Senior-Level Contact with China in Months — But No Formal Talks

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A Handshake at the Dinner Table — Nothing More

Japan's Trade Minister Ryosei Akazawa traveled to the eastern Chinese city of Suzhou this week to attend the Asia-Pacific Economic Cooperation (APEC) ministerial meeting on trade. On the sidelines of a dinner on Friday evening, he briefly approached Chinese Commerce Minister Wang Wentao for an informal conversation.

Akazawa described the exchange to reporters on Saturday — but was careful to set expectations low. "Before the dinner began on Friday, I approached Minister Wang and had a brief conversation," he said, adding he could not disclose any details because the exchange was diplomatic in nature. He was clear: there were no formal bilateral talks between the two countries.

Still, the moment carries weight. Akazawa is the most senior Japanese government official to have any direct contact with Beijing since a significant diplomatic dispute between the two nations broke out in November 2025.

What Triggered the Fallout

The rift has its roots in remarks made by Japanese Prime Minister Sanae Takaichi late last year. In parliament, Takaichi stated that a hypothetical Chinese military attack on Taiwan could constitute what Japan defines as a "survival-threatening situation" — potentially triggering a military response from Tokyo under existing defense law. China regards Taiwan as part of its own territory and the comments provoked a sharp reaction from Beijing.

China's commerce ministry subsequently accused Japan's leadership of making "erroneous remarks" that "seriously undermine the political foundation" of bilateral relations. Tokyo, for its part, firmly rejected Beijing's countermeasures as "absolutely unacceptable and deeply regrettable."

Beijing's Economic Pressure Campaign

Since December 2025, Beijing has responded with a series of escalating economic measures. Chinese exports of heavy rare earth minerals — including dysprosium, terbium, yttrium oxide and the minor metal gallium — to Japan have largely ground to a halt. Customs data confirms only negligible shipments have taken place since then.

These materials are not minor commodities. They are essential ingredients in electric vehicle motors, advanced weapons systems, aerospace components, and semiconductor manufacturing. Japan relies on China for roughly 60 to 63 percent of its rare earth imports — and for certain heavy rare earths used in high-performance magnets, the dependency is even more acute.

The consequences are already visible in the market. Major Japanese magnet manufacturer Shin-Etsu has reportedly stopped accepting new orders for products containing dysprosium. Analysts at the Center for Strategic and International Studies (CSIS) note that Beijing's current export controls go beyond past trade disputes — explicitly tying restrictions to Japan's evolving defense posture and its stance on Taiwan.

In January 2026, Beijing formalized the restrictions into law, and further rounds of tightening followed in February. Some controls specifically name major Japanese industrial groups, including defense-adjacent divisions of Mitsubishi Heavy Industries — a pointed escalation.

Rare Earths as a Geopolitical Weapon

China controls an overwhelming share of global rare earth processing capacity — a strategic position it has demonstrated willingness to weaponize. The current situation echoes a 2010 episode in which Beijing sharply curtailed rare earth supplies to Japan during a territorial dispute over the Senkaku/Diaoyu Islands. That incident fundamentally reshaped how governments and industries think about supply chain vulnerability.

This time, the stakes may be higher. Alternative supply chains are still years away from being able to compensate. Australian producer Lynas, one of the few significant non-Chinese rare earth producers, produced only about eight tons of dysprosium and terbium in the first quarter of 2026 — compared to the roughly 14 tons China was exporting to Japan monthly in 2024 alone.

Beijing has also urged its citizens to avoid travel to Japan, adding tourism pressure to the economic squeeze.

Akazawa Raises Rare Earth Controls at APEC — Without Naming China

During the formal APEC ministerial sessions, Akazawa called on exporting nations to "rectify arbitrary rare earth export controls." He declined to name any country directly — a cautious choice for a diplomat navigating a tense bilateral environment while standing on Chinese soil.

China, as the 2026 APEC host, is chairing the ministerial proceedings. The meetings are focused on broader Asia-Pacific trade cooperation, digital economy issues and WTO reform — but the bilateral tension between Asia's two largest economies looms over the proceedings.

A Long Road to Normalization

There is no indication that a single hallway conversation will rapidly thaw what has become one of the most serious Japan-China ruptures in recent years. No formal bilateral meeting was announced. Tokyo's trade ministry declined to confirm whether Japan had even formally requested one.

For Japan, the challenge is twofold: repair diplomatic ties with a neighbor that controls resources it cannot easily replace elsewhere, while standing firm on a security stance its leadership considers non-negotiable. For Beijing, maintaining pressure on Tokyo over Taiwan appears to remain a deliberate policy choice — using trade as leverage in a geopolitical dispute that shows no sign of quick resolution.

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Sources

1. Reuters – Japan trade minister holds brief talks with Chinese counterpart amid diplomatic row (May 23, 2026): https://www.reuters.com/world/china/japan-trade-minister-holds-brief-talks-with-chinese-counterpart-amid-diplomatic-2026-05-23/
2. Reuters – China cuts Japan off from some materials amid diplomatic spat (May 22, 2026): https://www.miningweekly.com/article/china-cuts-japan-off-from-some-materials-amid-diplomatic-spat-2026-05-22
3. CSIS – China's Rare Earth Campaign Against Japan (February 2026): https://www.csis.org/analysis/chinas-rare-earth-campaign-against-japan
4. Bloomberg – Japan Says Natural to Seek Communication With China at APEC (May 22, 2026): https://www.bloomberg.com/news/articles/2026-05-22/japan-says-natural-to-seek-communication-with-china-at-apec
5. Reuters / Yahoo News – Japan says China's dual-use export ban 'unacceptable' (January 7, 2026): https://www.yahoo.com/news/articles/japan-says-chinas-dual-export-025952542.html
6. Modern Diplomacy – China Bans Dual-Use Exports to Japan After Taiwan Remarks (January 7, 2026): https://moderndiplomacy.eu/2026/01/07/china-bans-dual-use-exports-to-japan-after-taiwan-remarks-raising-rare-earths-concerns/

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