Japanese government measures to prevent the outflow of manufacturing technology related to high-performance, rare-earth magnets appear to have failed.
China, whose firms developed technology and equipment acquired from Japan, now dominates the market for advanced magnets in a field where Japanese companies used to have a competitive edge.
The Japanese government implemented export controls on goods and technologies that can be converted to military use under the Foreign Exchange and Foreign Trade Law.
The Japanese government added high-performance magnets to its “catch-all” regulation in 2012 because such materials can be used in various types of weapons.
Following the move, related production involving Japanese firms in China temporarily stopped. But since around 2014, the establishment of joint Japanese-Chinese ventures for the production of high-performance, rare-earth magnets set the stage for the outflow of key technologies.
The acquisition of advanced Japanese magnet manufacturing equipment has enabled Chinese manufacturers to rapidly increase their technological capabilities. As a result, Chinese low-cost high-performance rare-earth magnets hit the market.
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