ASIATODAY.ID, JAKARTA — Asia has become the epicenter of two simultaneous global economic battles.
On one front, Japan is mounting a direct challenge to China’s dominance over rare earth minerals by tapping deep-sea resources. On the other, China is scoring a historic victory in the global automotive industry, overtaking Japan as the world’s largest vehicle seller for the first time in more than two decades.
Together, these developments signal a rapid shift in global industrial power, spanning critical minerals, electric vehicles, and strategic supply chains.
Japan Targets Deep-Sea Rare Earths to Break China’s Hold
Japan is preparing to launch an ambitious project that could reshape the global rare earth supply chain. From January 11 to February 14, 2026, Tokyo will conduct trial operations to extract rare earth–rich mud from the seabed near Minamitorishima, a remote, uninhabited atoll located within Japan’s Exclusive Economic Zone (EEZ).
The project will test advanced deep-sea mining technology designed to lift up to 350 metric tons of mineral-rich sediment per day from depths of approximately 6,000 meters, placing it among the deepest offshore resource extraction efforts ever attempted.
“One of our core missions is to establish a domestically controlled rare earth supply chain to ensure stable access to critical minerals,” said Shoichi Ishii, Director of Japan’s Cabinet Secretariat Maritime Development Innovation Platform on December 29, 2025.
Rare earth elements are essential to future-facing industries, including electric vehicle batteries, semiconductors, fighter jets, and advanced radar systems.
Since 2018, Japan has invested roughly 40 billion yen (about US$256 million) in the initiative. If the trial proves successful, full-scale mining operations could begin as early as February 2027.
China Still Dominates Rare Earths, but Pressure Is Mounting
Japan’s move directly targets China’s overwhelming control of the rare earth market, where Beijing currently accounts for nearly two-thirds of global production. This dominance has long underpinned China’s manufacturing strength—and alarmed advanced industrial economies.
Tensions escalated earlier this year after Beijing imposed restrictions on rare earth exports, a move widely seen as retaliation against U.S. trade measures.
In response, the United States and its Pacific allies—including Japan and Australia—have accelerated efforts to secure independent production and stockpiles of critical minerals.
During U.S. President Donald Trump’s visit to Japan in October 2025, Washington and Tokyo agreed on a framework covering extraction, investment, and strategic stockpiling of key minerals.
“Strengthening supply chain resilience, particularly for rare earths, is an urgent national priority,” Japanese Prime Minister Sanae Takaichi said at the time.
The project, however, is unfolding amid heightened security concerns. Ishii revealed that Chinese naval vessels were detected operating near Minamitorishima in June, coinciding with Japanese seabed resource surveys.
“We felt a serious sense of crisis, even though our activities were strictly limited to resource surveys within our own EEZ,” he said.
A Strategic Irony: China Wins Big in the Global Auto Industry
While Japan challenges China in the mineral arena, Beijing is consolidating power in the global automotive market.
Industry data compiled by Nikkei China and S&P Global Mobility projects that Chinese automakers will sell approximately 27 million vehicles worldwide in 2025, surpassing Japanese manufacturers, whose sales are expected to remain below 25 million units.
This marks the first time in more than 20 years that China has overtaken Japan as the world’s top vehicle-selling nation.
The figures include passenger and commercial vehicles, across both domestic and overseas markets. Roughly 70% of Chinese automakers’ sales come from the domestic market, where new energy vehicles (NEVs)—battery electric vehicles (BEVs) and plug-in hybrids (PHEVs)—account for nearly 60% of passenger car sales.
BYD, Geely Enter the Global Elite
Several Chinese automakers have now joined the industry’s top tier. BYD and Geely rank among the world’s top 10 vehicle manufacturers by sales, while Chery has emerged as one of China’s largest auto exporters, posting rapid growth abroad.
China’s expansion is increasingly visible in regions traditionally dominated by Japanese brands:
– Southeast Asia: sales projected at around 500,000 units
– Europe: rising to approximately 2.3 million units, despite import tariffs
– Africa: about 230,000 units, up 32%
– Latin America: exceeding 540,000 units, a 33% increase
By contrast, Japanese automakers—who peaked at nearly 30 million units in global sales in 2018—are facing mounting pressure from declining market share in the United States and China, as well as slower adaptation to the electric vehicle transition.
Asia’s Dual Economic Confrontation
These developments highlight two parallel battlefields shaping Asia’s economic future: Japan and its Western allies are seeking to erode China’s dominance in rare earths and critical minerals.
China is tightening its grip on the global automotive and electric vehicle markets.
This is no longer just a contest over mines or car sales. It is a struggle over who controls the industrial value chain of the future—from raw materials to advanced technology. (AT Network)
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