BEIJING – China imported more goods from Japan in December 2025 than at any point in the last three years, customs data revealed on Wednesday, signaling resilience in China-Japan trade relations despite rising geopolitical tensions over Taiwan.

The world’s second-largest economy purchased $16.4 billion worth of goods from Japan last month, marking the highest monthly total since September 2022. China’s customs administration is expected to release a detailed, itemized breakdown on January 20.

Rising Tensions Over Taiwan

Trade between the two Asian neighbors has been overshadowed by political friction. Japanese Prime Minister Sanae Takaichi sparked controversy in November by suggesting in parliament that a potential Chinese attack on democratically governed Taiwan could constitute an existential threat to Japan. China views Taiwan as part of its territory, a claim Taiwan rejects.

Beijing responded sharply, curbing flights and banning exports of dual-use items—goods that can have both civilian and military applications—to Japan, citing Takaichi’s “egregious” remarks. Diplomatic rhetoric escalated, with China warning Tokyo of severe consequences in the event of intervention over Taiwan.

Concerns Over Rare Earth Exports

Japanese companies, particularly automakers, are closely monitoring China’s rare earth export policies. China’s export control list includes roughly 1,100 dual-use items and technologies, among them seven categories of medium and heavy rare earths critical for manufacturing magnets used in car motors, speakers, oil pumps, and electric vehicles.

Despite earlier curbs, separate customs data show that China’s rare earth exports surged in 2025 to the highest level since at least 2014, even as Beijing restricted shipments starting in April. Analysts view this as a strategic move to assert leverage over global markets while negotiating tariffs and trade terms with the United States.

Experts warn that China could impose export restrictions affecting Japanese industries if political tensions continue, particularly if Tokyo fails to retract statements regarding Taiwan.

Economic Significance of China for Japan

China is Japan’s second-largest export market after the United States, accounting for 18% of Japan’s total exports, according to World Bank data. By contrast, Japan’s third-largest trading partner, South Korea, imports just $47 billion worth of goods annually, highlighting China’s substantial economic influence over its neighbor.

For the full year, Chinese exports to Japan rose 3.5% in dollar terms, while imports from Japan increased 5.5%, according to Chinese customs figures. The numbers underscore the durability of bilateral trade flows even amid political and military tensions in the region.

Outlook for China-Japan Trade

Analysts suggest that while short-term tensions over Taiwan may flare, economic pragmatism is likely to sustain trade flows between China and Japan. Japanese firms, particularly in the automotive and technology sectors, remain heavily reliant on Chinese inputs, including rare earth minerals and electronic components, making continued engagement a priority despite geopolitical risks.

As trade and diplomacy continue to intertwine, market watchers will monitor China’s next steps, especially regarding export controls and rare earth supplies, which are critical not only for Japan but also for global supply chains in high-tech industries.