Recently the Yomiuri News reported the following:
Group leader Fujio Cho (Chairman of the Toyota Motor) of the China visiting group of the Japan-China Association of Economy and Trade, together with the supreme advisor, the chairman of the Federation of Economic Organization Hiromasa Yonekura and others conferred with Li Keqiang, China's chief deputy prime minister on the 6th.
Group leader Cho expressed concern over the reduction in China's supply in reaa-su (rare earth) which was indispensable to the high-tech production, and he "expects suitable solution"and asked for improvement. Deputy Prime Minister Lee said, "He expects cooperation in both country's companies on the use of the rare earth", and he requested technical cooperation from the Japan side.
Deputy Prime Minister Lee pointed out that "Japan has the excellent technology in the development and use of the rare earth." In return for the stable supply, China side was asking for local production of products that used rare earth. For the Japan side, in return for the guarantee of a steady supply of the rare earth there would be a risk of technical outflow; it was facing a decision likely to be difficult.
Obviously, it is a tough decision for the Japanese companies to make.