In recent months, a series of diplomatic spats, economic maneuvers, and technological standoffs have pushed the rivalry between China and Japan—and, by extension, the United States—into sharp relief. The epicenter of this tension? The rare earth mineral yttrium, a resource so obscure that most people have never heard of it, yet so vital that its scarcity could upend industries and international alliances alike.
The latest spark came on November 29, 2025, when Japan’s Prime Minister Sanae Takaichi made a bold declaration in Parliament: Any Chinese military invasion of Taiwan would constitute an “existential crisis” for Japan. According to reporting in WIRED Italia and commentary by Srikanth Kondapalli in The New Indian Express, this warning was not just rhetoric. Taiwan sits astride critical Indo-Pacific sea lanes—routes that Japan has historically guarded and that now underpin much of its economic lifeblood. Any conflict in the region would threaten the flow of goods, energy, and, crucially, the high-tech materials that power everything from smartphones to fighter jets.
China’s response was swift and, at times, incendiary. Xue Jian, the Chinese consul general in Osaka, lashed out with a provocative statement—“that filthy neck be cut off”—aimed squarely at Japan. Though the remark was quickly scrubbed from social media, the damage to bilateral relations was done. As The New Indian Express noted, this kind of “wolf warrior” diplomacy has become almost routine, fueling nationalist fervor at home and stoking tensions abroad. Calls for bans on Japanese products and travel soon followed, as did a surge in anti-Japanese sentiment online, with some voices even demanding the seizure of the Ryukyu Islands.
Ironically, just a week before this war of words, leaders from China and Japan had met at the APEC summit in South Korea, where they reaffirmed their commitment to a “mutually beneficial relationship based on common strategic interests.” But as Srikanth Kondapalli observes, that diplomatic edifice now appears to be crumbling under the weight of domestic political pressures and regional ambitions.
Behind the scenes, China’s Communist Party has been grappling with its own turmoil. The delayed Fourth Plenum meeting last month saw a dramatic purge of high-ranking military officials, a sign of brewing discontent within both party ranks and the armed forces. In such times, external distractions—like a spat with Japan—can serve to rally public support and deflect attention from internal strife. Massive anti-Japanese military parades in Beijing, reminiscent of those in 2015, were staged again in 2025, amplifying the drumbeat of nationalism.
Yet the stakes are far higher than just bruised egos or symbolic gestures. The economic ties between China and Japan are deep and complex: Over 31,000 Japanese companies operate in China, more than in any other country. Japan’s aid to China exceeds $40 billion, direct investments have topped $100 billion, and bilateral trade reached a staggering $292 billion in 2024. Despite this interdependence, friction persists. As The New Indian Express reminds us, China previously banned exports of rare earth metals to Japan in 2010 during a dispute over the Senkaku Islands—an ominous precedent for today’s tensions.
This brings us to yttrium, the silent centerpiece of the current crisis. As detailed in WIRED Italia, yttrium is indispensable to modern technology. It imparts thermal and mechanical strength to jet engine blades, ensures precision in semiconductor manufacturing, and protects turbines in gas-fired power plants. Without it, entire industries would grind to a halt. The catch? China controls almost the entire global supply chain, producing and refining the vast majority of yttrium and other rare earths. The United States, for instance, imports 100 percent of its yttrium needs—93 percent of which comes directly from China.
When Beijing imposed export restrictions on rare earths, including yttrium, in April 2025, the effects were immediate and severe. Prices for yttrium oxide in Europe soared by a jaw-dropping 4,400 percent since the start of the year. Aerospace and semiconductor companies sounded the alarm, warning of delays, rising costs, and looming shortages. Even gas-fired power plants, while not yet directly affected, began monitoring Chinese policy developments with growing anxiety. Outside China, warehouse reserves of yttrium dwindled, with some traders reporting they were down to just a few units—or completely out of stock. Chinese exports to several countries have dropped by about 30 percent, underscoring the market’s fragility and the world’s reliance on a single supplier.
Beijing’s strategy isn’t limited to controlling the flow of minerals. It also involves managing the technical expertise needed to process them. Chinese authorities have begun restricting the travel of rare earth technicians and tightly monitoring the transfer of know-how to rival countries. Export bans on advanced rare earth processing technologies remain firmly in place. This dual approach—control of both resources and human capital—cements China’s dominance and frustrates attempts to build alternative supply chains.
On the diplomatic front, a late-October meeting in South Korea between President Xi Jinping and US President Donald Trump raised hopes for a rare earth truce. China agreed to a one-year reprieve on mandatory government licensing for rare earth exports, in exchange for the US suspending its latest restrictions on technology supply chains. Yet, as WIRED Italia reports, many of the earlier Chinese measures remain in force, and the two sides have given negotiators until the end of November to hash out clearer terms. Meanwhile, Beijing is crafting a licensing system that would expedite shipments only to companies with no ties to the US military—a move likely to disadvantage many Western firms operating at the intersection of civilian and defense technologies.
The United States is not standing still. New projects, such as ReElement Technologies in Indiana, are set to begin domestic yttrium oxide production in December 2025, with an initial capacity of 200 tons per year—set to double soon after. Although this won’t meet total US demand, it marks a crucial first step toward supply diversification. During Trump’s recent visit to Asia, the US and Japan inked an agreement to jointly exploit the Minamitori undersea rare earth deposit in the Pacific. The two allies also launched a joint study to develop the technologies and infrastructure needed to extract these minerals from extreme ocean depths, an undertaking that will require vast investment and technical cooperation.
Yet, as things stand, the absence of a complete supply chain—from extraction to refining—means the transition away from Chinese dominance is slow and fraught with challenges. China, for its part, shows no sign of relinquishing its strategic advantage, using rare earths as both a bargaining chip and a lever of geopolitical influence.
Amid these shifting sands, other regional players are watching closely. China’s displeasure with Singapore’s Prime Minister Lawrence Wong for calling Japan a “trusted great power” signals Beijing’s ongoing sensitivity to historical grievances and contemporary alliances. Meanwhile, India, still reeling from the fallout of the 2020 Galwan clashes and a recent incident in which China detained an Arunachal Pradesh resident in Shanghai, is preparing for further turbulence—anticipating that Beijing could weaponize tourism, rare earth exports, or even naval deployments in future disputes.
For now, the world’s technological and economic engines continue to hum, but the machinery is running on borrowed time and borrowed minerals. As the contest for control over rare earths intensifies, the outcome will shape not only the future of Asia, but the trajectory of global innovation and security itself.
