China’s leaders want Japan to help with the technology it needs to develop rare-earth products to China. But, according to Japanese media reports, Beijing will still maintain quotas to limit the metals’ exports.
Demand for rare earths – a group of 17 elements used for catalytic converters, battery cells and motors for hybrid cars, among others – is expected to double in the next five years and China produces more than 95% of them. It now wants to bring the sector under greater control, citing resource depletion and environmental degradation, but these controls have alarmed its overseas customers. Japan accounts for a third of global rare earth demand.
Chinese vice premier Li Keqiang met in Beijing with Hiromasa Yonekura, chairman of Japan’s biggest business lobby, Nippon Keidanren, and Toyota chairman Fujio Cho, both of whom head the Japan-China Economic Association.
In the meeting, Cho appealed for a reevaluation of Beijing’s policy on rare earth exports but Li defended the steps as necessary to protect the environment, according to Japanese national broadcaster NHK.
Li, who is widely expected to replace Wen Jiabao as China’s next premier, added that he hoped Japanese companies would bring the technology to develop products using rare earths to China, NHK reported.
“Japan has advanced technology to develop and use rare earths,” Japan’s Jiji news agency cited Li as saying. “I hope that both countries’ companies can promote cooperation in this field.”
In a move that could raise tensions further, Chinese state media said on Tuesday it would halt production of rare earths at three major mines.
The World Trade Organisation ruled in July that China broke international law when it curbed exports of raw materials in a landmark case that threatened Beijing’s legal defence for similar export brakes on rare earths. Beijing has appealed the decision.