Recently, Japanese companies have encountered a major problem. According to Japanese media reports, a domestic state-owned enterprise specializing in rare earth sales has explicitly informed some Japanese companies that they will no longer sign new rare earth export contracts and is even considering terminating existing agreements. This is not a threat; it is a real action—this is the first time Japanese companies have faced a closed-door response in the rare earth sector since the Ministry of Commerce released the control list of dual-use items for Japan on January 6.

**The serious control measures are beginning to take effect**

The list covers over 900 items, with rare earths being a key focus. To be honest, how deep is Japan's manufacturing industry’s dependence on Chinese rare earths? Especially for medium and heavy rare earths like dysprosium and terbium, Japan’s reliance is close to 100%. These materials are essential for electric vehicle drive motors, high-end robots, and even military equipment. Without a stable supply, there is a direct risk of production lines coming to a halt.

Previously, Japan was still betting whether this control was just bluffing. Now, with the suspension of signing contracts and termination of agreements by rare earth companies, all hopes of luck have been shattered. From policy level to actual trading links, the pressure has already been transmitted. No wonder the Japanese Ministry of Foreign Affairs is anxious, with continuous protests during this period.

**Corporate anxiety vs. netizens’ optimism, this split is too surreal**

What’s truly surreal is the polarization within Japanese society. On one side, the business community is sweating profusely; on the other, netizens are shouting "Decoupling from China has many benefits."

The business side is extremely anxious. Toyota may have to halt some production capacity, and more companies focused on high-end manufacturing are worried about their production plans after their rare earth inventories run out. A Japanese think tank has estimated that if rare earth controls continue for a year, Japan’s economic loss could reach 2.6 trillion yen. The five pillar industries—automobiles, electronic components, etc.—will all be impacted. The business community knows very well how tricky this situation is.

But online? Japanese netizens are shouting "Rare earth self-sufficiency is in sight," claiming "substitute technologies have a safety net," completely ignoring the fact that Japan’s rare earth development plan has been ongoing for 13 years without making substantial progress in heavy rare earths. Building alternative supply chains takes years or even over a decade—this is an objective law. But the long-term, one-sided information environment has some netizens still stuck in old perceptions, thinking that "de-Chinese-ification" is too simple, underestimating China’s industrial strength. This cognitive bubble prevents them from realizing the chain reaction that a rare earth supply cutoff would cause to the overall economy.

**China still has countermeasures**

If Japan continues to be stubborn, China’s countermeasures are far from over. Rare earth controls are just the first step; the core goal is to curb Japan’s "remilitarization" ambitions. If Japan does not pull back, subsequent countermeasures will be more targeted.

Looking at the trade structure, automobiles and auto parts, chemical products, some components, and semiconductor manufacturing equipment—these remain the main exports from China to Japan. The Chinese market still needs these products, but they are not irreplaceable. As domestic industries continue to upgrade, the capacity for domestic substitution in related fields is steadily increasing. Once targeted substitution policies are introduced to guide the market toward domestic or alternative foreign supplies, the loss of orders and market shrinkage for Japan will no longer be hypothetical.

Previously, China launched anti-dumping investigations into Japanese-origin dichlorosilane, which already signals that there are sufficient trade tools for retaliation. Japan is now seeking support from the US and Western countries, but their own rare earth supply chains also have weaknesses and cannot fully support Japan. If Japan does not adjust its stance in time, it will face not only the industrial pressure from rare earth supply cuts but also a double blow from shrinking export markets to China.

**Admitting mistakes is the way out**

In short, China’s controls target Japan’s "remilitarization" risks. Japan can only resolve the current industrial chain crisis by admitting its mistakes. Continuing to deceive itself within its cognitive bubble will only lead to more severe economic and industrial difficulties.