Chinese exports of rare earths to Japan stagnant, traders say+

BEIJING, Sept. 23 Kyodo -
Chinese exports of rare earths to Japan have gone stagnant since around
Tuesday, sources at Japanese trading houses in Beijing said Thursday, a sign
Beijing may have increased pressure on Tokyo to free a Chinese fishing boat
captain detained in Japan over a ship collision row.
The sources said, however, they have yet to confirm shipment of rare earths
used in hybrid cars, mobile phones and other high-tech products has been banned
as was reported by the New York Times in its electronic edition Wednesday.
Quoting an executive of a rare earth consulting company in Australia, the Times
said several executives in the industry ''have been told that the initial ban
will last through the end of the month, and the Chinese government will
reassess then whether to extend the ban if the fishing captain still has not
been released.''
Japanese prosecutors will decide whether to indict the captain or not before
the period of his court-authorized detention expires next Wednesday.
Reuters news agency, in a report from Beijing, quoted an unnamed Chinese
Commerce Ministry spokesman as saying the New York Times story had ''no basis''
and China has no embargo on rare earth shipments to Japan.
But Japanese traders suspect China may have instructed customs authorities and
domestic rare earth producers to suspend shipments to Japan.
If the situation lasted for a long time, it would affect Japanese industry,
they said.
Even before the incident in the East China Sea, Japan had urged China to ease
export controls on rare earth metals, as China, the largest exporter of rare
earths, had already restricted exports to Japan.
China produces more than 90 percent of global output of rare earth metals.
Neodymium, the raw material for magnets, is a well-known rare earth element.
Japanese government officials said Tokyo has obtained information from some
Japanese traders that shipments have been stopped.
The Japanese government has been trying to confirm with the Chinese government
through diplomatic channels if there is an embargo, but it has yet to receive
any confirmation one way or the other.
Foreign Minister Seiji Maehara also told reporters in New York on Thursday that
he has yet to confirm the alleged embargo. He did not clearly say when asked
how Tokyo would respond if the embargo was indeed in place.
At a bilateral ministerial meeting on economic matters in August, Tokyo and
Beijing agreed to hold vice-ministerial talks on relaxation of the trade
controls.
But according to the New York Times report, a Chinese Commerce Ministry
official said Beijing will not now discuss trade policy on rare earths with
Japan.
Chinese Premier Wen Jiabao said Tuesday in New York, ''If Japan acts at its own
discretion, China will take further action.'' Wen warned Japan will have to
bear full responsibility for the outcome of all of these issues.
The Japan Coast Guard arrested Chinese ship skipper Zhan Qixiong and sent him
to prosecutors on suspicion of deliberately causing his vessel to collide with
a Japanese patrol boat pursuing it near the disputed Senkaku Islands in the
East China Sea on Sept. 7. He is also suspected of illegally fishing in
Japanese territorial waters.
China argues the islets, which it calls Diaoyu, have been Chinese territory
since ancient times.
The islands are administered by Japan but are also claimed by Beijing and Taiwan.
==Kyodo
2010-09-24 02:04:42