x Abu Dhabi, UAEMonday 24 July 2017

China denies ban on exports to Japan

US government urges dialogue to resolve dispute arising from detention of trawler captain after collision near disputed islands.

BEIJING // China yesterday denied it had blocked the export of rare earth minerals to Japan in another twist in the dispute over the detention of a Chinese trawler captain. A government spokesman rejected reports that Beijing had imposed a ban, as Japan continued to hold the captain of a boat that this month collided with two Japanese coastguard vessels near disputed islands. There were also warnings from China yesterday that tourism could be affected if the dispute over the September 7 incident is not resolved.

A Japanese buyer of the minerals is reported to have told the Industrial Minerals Co of Australia consultancy that China had asked exporters not to send supplies to Japan for at least the rest of this month. According to a New York Times report, the ban was an informal one, with the authorities having indicated that companies that continued to send the minerals to Japan might see their export quotas affected.

The US secretary of state, Hillary Clinton, urged dialogue in a bid to resolve the dispute when she met yesterday with the Japanese foreign minister, Seiji Maehara, a US official said. In a meeting with Mr Maehara, Mrs Clinton sought to "encourage dialogue and [voiced] hope that the issue can be resolved soon," said her spokesman Philip Crowley, adding that Japan-China ties "are vitally important to regional stability".

Japan is the world's largest consumer of rare earth minerals, which consist of 17 metallic elements used in the manufacture of missiles, electric cars, iPods, radar equipment and other products. Analysts believe car manufacturers such as Toyota have as much as a year's supply available, so vehicle production would not immediately be affected by restrictions on Chinese exports. However, prices, already driven up by growing demand and limitations on supply, could rise further.

Chen Rongkai, a Chinese ministry of foreign trade and economics spokesman, yesterday insisted the Industrial Minerals Co report was inaccurate. "China does not have a trade embargo on rare earth exports to Japan," he told the Bloomberg news agency. Nonetheless, the issue has highlighted concerns over China's control of more than 95 per cent of the world's supply of rare earths, particularly since it had already cut exports in the second half of this year, saying it had to safeguard supplies for domestic companies.

In another development yesterday, Zhang Xilong, the deputy director general of the China National Tourism Administration, warned at a meeting in Japan of the Asia-Pacific Economic Co-operation (Apec) forum that tourism between the countries could suffer as a result of the dispute, which he blamed solely on Japan. "If this issue is not properly handled and the mistakes not corrected, I'm afraid it will have an even more serious impact on tourism between China and Japan and even to some extent on tourism relations in Apec," Mr Zhang said.

The dispute has already seen two concerts scheduled by the Japanese pop group SMAP for Shanghai next month called off, while the Chinese government has withdrawn invitations for 1,000 young Japanese people to visit Expo 2010 in Shanghai. The boat and 14 crew involved in the incident have already been released. On Wednesday, China rebuffed Japanese calls for immediate talks to defuse the row. Yoshito Sengoku, the Japanese chief cabinet secretary, had said it "would be good" to hold high-level talks "as quickly as possible".

Earlier in the week, a Chinese government spokeswoman said it would "clearly be inappropriate" for the country's premier, Wen Jiabao, to meet his Japanese counterpart, Naoto Kan, while the two are at the United Nations headquarters in New York for scheduled gatherings. Mr Wen warned on Tuesday that Japan would "bear all the consequences" if it did not release the trawler captain. Tensions could ease or escalate next week, with a Japanese court deadline for the trawler captain to be released or charged falling on Wednesday.

The islands where the incident occurred, called Senkaku in Japanese and Diaoyu in Chinese and also claimed by Taiwan, are in disputed waters that contain natural gas fields. @Email:dbardsley@thenational.ae * With agencies