In 2010, a Chinese fishing boat rammed a Japan Safety Agency patrol boat in Japanese territorial waters around the Senkaku Islands. When the Chinese captain was detained by Japan, China banned the export of rare earths. China banned the export of rare earths, which Japan's manufacturing industry was heavily dependent on at the time. For Japan, which relied on rare earths from China, the export ban had a very large short-term impact. After this incident, Japan began to promote research and development that would eliminate its dependence on rare earths from China. Reducing its dependence on rare earths would in turn reduce China's influence in the long term. Currently, research and development of rare earths is fundamentally reducing Japan's dependence on China.
China's ban on rare earth exports is becoming a weakness for China as time goes on. China is actively stockpiling so-called strategic materials. If you are focusing on the spread of electric vehicles (EVs), cobalt used in lithium-ion batteries is an essential material. 70% of the cobalt used in the world is produced in the Democratic Republic of the Congo in Africa. The Democratic Republic of the Congo, the world's largest producer of cobalt, is increasing its production under the control of China. Congo's mining industry is almost dominated by Chinese companies, and its production is rapidly increasing. In a sense, it is said that China has almost monopolized the supply of cobalt used in batteries for electric vehicles (EVs).
Now, Australia is considering breaking away from its dependence on China over critical minerals. It has begun to set up a policy to supply its own critical minerals to the United States and Europe. For example, the EU met with the Australian government in April 2024. There, the two sides announced that they would aim for a strategic partnership regarding critical minerals. The EU and Australia are trying to build a sustainable supply chain of critical minerals in order to transition to clean energy. China may also unilaterally ban imports and exports. Examples of this are bananas in the Philippines in the past and beef and grains in Australia today. China is also a country that constantly uses these methods against countries that disagree with its policies. Western countries have learned to prepare production systems that can withstand a certain degree of supply cutoff from important materials from China. It appears that they are preparing (systems and laws) so that they can take action in response to a cutoff in strategic materials such as rare earths.