China’s rare earth retaliation tests Korea’s diplomacy

Home > Opinion > Editorials

China’s rare earth retaliation tests Korea’s diplomacy

Published: 08 Jan. 2026, 00:00

Audio report: written by reporters, read by AI

Chinese President Xi Jinping (R) and Japanese Prime Minister Sanae Takaichi shake hands ahead of a China–Japan summit in Gyeongju on Oct. 31, 2025. [YONHAP]

China has moved to retaliate against Japan by banning rare earth exports, escalating economic pressure through the full prohibition of so-called dual-use materials that can be diverted for military purposes. The measure underscores Beijing’s red line over the Taiwan Strait. It also includes the threat of a secondary boycott, warning that third countries reexporting Chinese rare earths to Japan would face punishment.

China has repeatedly wielded rare earths as a blunt instrument during diplomatic disputes. Last year, when Beijing tightened controls on rare earth magnet exports, Ford Motor temporarily halted production and the U.S. President Donald Trump administration eased some semiconductor export restrictions to China. In 2010, during the Senkaku Islands dispute, China suspended rare earth shipments to Japan, prompting Tokyo to release a detained Chinese captain within a day. The episode remains a touchstone for how quickly economic coercion can yield political results.

Although the current action targets Japan, the message to Korea is unmistakable. The timing is difficult to dismiss as coincidence: The announcement came during President Lee Jae Myung’s state visit to China. Beijing appears to be signaling that if Korea takes steps deemed contrary to Chinese interests, including on Taiwan-related issues, it could face similar retaliation. At the same time, China has rolled out warm protocol and language of goodwill toward Seoul, while subtly attempting to drive a wedge between Korea and Japan. The calculus may also reflect Seoul’s plans for President Lee to visit Japan later this month to meet Prime Minister Sanae Takaichi.

Korea cannot afford to choose sides in an intensifying China–Japan standoff. President Lee acknowledged as much at a recent press conference, saying Korea’s role is limited for now. That candor reflects an increasingly constrained diplomatic space. Still, restraint is not the same as inaction. There is no alternative to managing relations with China while deepening cooperation with Japan. Avoiding entanglement must not become an excuse for being unprepared.

Beyond diplomacy, Korea needs urgent economic security measures to shore up its rare earth exposure. The numbers are stark. According to the Korea Customs Service, Korea depends on China for nearly 90 percent of its rare earth raw materials, far higher than Japan’s reliance in the 70 percent range. More than 90 percent of permanent magnets essential for electric vehicles are sourced from China. Gallium, a key material for next-generation power semiconductors, is dominated by China with a 98 percent share of global output. Graphite, critical for battery anodes, also carries a China dependence of about 97 percent.

This structure leaves Korea acutely vulnerable. A squeeze on even a single item could reverberate across core industries. Diversifying supply chains, expanding stockpiles, strengthening mineral partnerships with countries such as Australia and Canada and investing in recycling technologies are no longer optional. They are preventive steps that must be taken before economic coercion becomes a reality.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.