LDN Business - China | Japan Trade Measures

China announces another new trade measure against Japan as tensions rise

[January 07, 2026] By SIMINA MISTREANU

BEIJING (AP) — China escalated its trade tensions with Japan on Wednesday by launching an investigation into imported dichlorosilane, a chemical gas used in making semiconductors, a day after it imposed curbs on the export of so-called dual-use goods that could be used by Japan’s military.

The Chinese Commerce Ministry said in a statement that it had launched the investigation following an application from the domestic industry showing the price of dichlorosilane imported from Japan had decreased 31% between 2022 and 2024.

“The dumping of imported products from Japan has damaged the production and operation of our domestic industry,” the ministry said.

The measure comes a day after Beijing banned exports to Japan of dual-use goods that can have military applications.

Beijing has been showing mounting displeasure with Tokyo after new Japanese Prime Minister Sanae Takaichi suggested late last year that her nation's military could intervene if China were to take action against Taiwan — an island democracy that Beijing considers its own territory.

Tensions were stoked again on Tuesday when Japanese lawmaker Hei Seki, who last year was sanctioned by China for “spreading fallacies” about Taiwan and other disputed territories, visited Taiwan and called it an independent country. Also known as Yo Kitano, he has been banned from entering China. He told reporters that his arrival in Taiwan demonstrated the two are “different countries.”

“I came to Taiwan … to prove this point, and to tell the world that Taiwan is an independent country,” Hei Seki said, according to Taiwan’s Central News Agency.

“The nasty words of a petty villain like him are not worth commenting on,” Chinese Foreign Ministry spokesperson Mao Ning retorted when asked about his comment.

Fears of a rare earths curb

Masaaki Kanai, head of Asia Oceanian Affairs at Japan's Foreign Ministry, urged China to scrap the trade curbs, saying a measure exclusively targeting Japan that deviates from international practice is unacceptable. Japan, however, has yet to announce any retaliatory measures.

[to top of second column]

Chinese President Xi Jinping, right, shakes hands with South Korean President Lee Jae Myung, left, during a ceremony of the Memorandum of Understanding, (MOU) between South Korea and China in Beijing, China, Monday, Jan. 5, 2026. (Han Sang-kyun/Yonhap via AP)

As the two countries feuded, speculation rose that China might target rare earths exports to Japan, in a move similar to the rounds of critical minerals export restrictions it has imposed as part of its trade war with the United States.

China controls most of the global production of heavy rare earths, used for making powerful, heat-resistance magnets used in industries such as defense and electric vehicles.

While the Commerce Ministry did not mention any new rare earths curbs, the official newspaper China Daily, seen as a government mouthpiece, quoted anonymous sources saying Beijing was considering tightening exports of certain rare earths to Japan. That report could not be independently confirmed.

Improved South Korean ties contrast with Japan row

As Beijing spars with Tokyo, it has made a point of courting a different East Asian power — South Korea.

On Wednesday, South Korean President Lee Jae Myung wrapped up a four-day trip to China – his first since taking office in June. Lee and Chinese President Xi Jinping oversaw the signing of cooperation agreements in areas such as technology, trade, transportation and environmental protection.

As if to illustrate a contrast with the China-Japan trade frictions, Lee joined two business events at which major South Korean and Chinese companies pledged to collaborate.

The two sides signed 24 export contracts worth a combined $44 million, according to South Korea’s Ministry of Trade, Industry and Resources.

During Lee’s visit, Chinese media also reported that South Korea overtook Japan as the leading destination for outbound flights from China’s mainland over the New Year’s holiday.

China has been discouraging travel to Japan, saying Japanese leaders’ comments on Taiwan have created “significant risks to the personal safety and lives of Chinese citizens in Japan.”

Back to top