China Embargos Rare Earth Exports To Japan, Japan to free Chinese boat captain amid row

http://www.nytimes.com/2010/09/23/business/global/23rare.html?_r=4

Summary from Slashdot:

"The NY Times reports that the Chinese government has placed a trade embargo on all exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles. China mines 93 percent of the world's rare earth minerals, and more than 99 percent of the world's supply of some of the most prized rare earths, which sell for several hundred dollars a pound. The embargo comes after a dispute over Japan's detention of a Chinese fishing trawler captain whose ship collided with two Japanese coast guard vessels as he tried to fish in waters controlled by Japan but long claimed by China. The Chinese embargo is likely to have immediate repercussions in Washington. The House Committee on Science and Technology is scheduled to review a detailed bill to subsidize the revival of the American rare earths industry and the House Armed Services Committee is scheduled to review the American military dependence on Chinese rare earth elements."

http://www.bbc.co.uk/news/world-11403241

Japan is to release a Chinese fishing boat captain whose arrest two weeks ago led to a major row with Beijing.

Japan had accused Zhan Qixiong of deliberately ramming two patrol vessels near disputed islands in the East China Sea.

China said his detention was "illegal and invalid", and was sending a plane to bring him home.

It came after four Japanese men were detained in China on suspicion of illegally filming in a military area.

A Japanese foreign ministry spokesman said its embassy in Beijing had received confirmation that the four were being held, but he said he did not want to speculate whether it was linked to Japan's detention of a Chinese fishing boat captain.

Officials said the four men were employees of a Japanese construction company who were in China to bid for a project to dispose of chemical weapons from World War II.

Roland Buerk BBC News, Tokyo

Many in Japan may bristle, saying the country has caved in to Chinese pressure. But Japan certainly had a lot to lose. The economy is dependent on exports for growth, and China is its biggest trading partner. Japan's government is looking in to reports that China stopped shipments to Japan of rare earths - elements in which it has a near monopoly vital for the manufacture of hi-tech goods like electric cars.

By releasing the captain, Japan may ease tension, but it looks weak. China, too, may lose in the long run. The events of this month have cast a chill over its neighbours just as China hopes to take on a larger global role.
Escalating tensions

At a news conference, prosecutors in Naha, Okinawa, said Mr Zhan was just a fishing boat captain and had no criminal record in Japan.

They said they did not perceive any premeditated intent to damage the patrol boats and therefore had decided that further investigation while keeping the captain in custody would not be appropriate, considering the impact on relations with Japan.

It was unclear whether Mr Zhan would be charged with anything, or when he would be released.

"It is a fact that there was the possibility that Japan-China relations might worsen or that there were signs of that happening," said Chief Cabinet Secretary Yoshito Sengoku, the Reuters news agency reported. "Our ties are important and both sides must work to enhance our strategic and mutual beneficial relations."

Spokeswoman Jiang Yu said on the Chinese foreign ministry website that the government would send a charter plane to bring Mr Zhan home, reiterating that "any form of so-called legal procedures taken by Japan against the Chinese boat captain are illegal and invalid".

Tensions had escalated since Japan detained the Chinese captain.

Beijing cut off ministerial level contacts between the two countries and thousands of Chinese tourists pulled out of trips to Japan. Concerts by a Japan's top boy band SMAP due to take place in Shanghai were cancelled by the Chinese organisers.

Earlier this week Chinese Premier Wen Jiabao said that Japan bore full responsibility for the situation and demanded the immediate release of the captain.

On Thursday, US Secretary of State Hillary Clinton urged the two sides to settle the issue before it had a long-term impact on the region.

The Japanese coastguard arrested Zhan Qixiong on 8 September after his trawler collided with two of their patrol boats in an area claimed by both countries, near uninhabited islands which may have oil and gas deposits

Japanese prosecutors had until next Wednesday to decide whether or not to charge the man.