Japan-China Dual-Use Export Ban Sparks Diplomatic Crisis

Tensions rise between China and Japan as a dispute over dual-use item exports boils over. Japan criticizes China's export ban targeting dual-use goods, crucial for civilian and military applications. The diplomatic row escalates following Japanese PM Takaichi’s controversial remarks on Taiwan, impacting Japan's economy and its rare earth supply chain.

Japan has condemned China's ban on the export of dual-use items to its borders, labeling the move as "absolutely unacceptable and deeply regrettable." The ban, which includes critical rare earth elements used in drones and chips, comes amidst escalating tensions between Asia's top two economic powerhouses.

The diplomatic spat reportedly ignited after Japanese Prime Minister Sanae Takaichi suggested that a Chinese attack on Taiwan could pose an existential threat to Japan. In retaliation, Beijing imposed the export restrictions and demanded Takaichi retract her statement, which she has refused to do.

The situation has already impacted Japan's economy, notably its Nikkei index, and major firms like Kawasaki Heavy and Mitsubishi Heavy suffered notable losses. Analysts warn further rare earth restrictions could significantly disrupt Japan's manufacturing sector, echoing a similar scenario from 2010.

(With inputs from agencies.)