A Chinese trade official has denied claims that Beijing is blocking the export of rare minerals to Japan in a dispute over the arrest of a Chinese fishing trawler captain.
The New York Times report quoted industry experts in Japan as saying Chinese customs officials have halted shipments.
The minerals are used to enhance batteries, hybrid car motors, computer and weapons systems.
“China has not issued any measures intended to restrict rare earth exports to Japan. There is no foundation for that,” said Chen Rongkai, a spokesman for China’s Ministry of Commerce.
“I don’t know how the New York Times came up with this, but it’s not true. There are no such measures.”
But at the same time China’s Prime Minister Wen Jiabao threatened retaliatory steps against Japan unless it releases the trawler captain.
He said: “We’ve repeatedly made serious representations towards the Japanese, but Japan pretends not to hear us. In such a situation, we have no choice but to take necessary and forceful measures.”
The trawler captain was arrested on 7 September after allegedly colliding with two Japanese Coast Guard boats near islands controlled by Japan but long claimed by China.
Analysts said the row is actually over energy resources under the sea around those islands.
Beijing has already suspended high-level contacts with Japan over the issue and postponed talks on increasing the number of flights between the two countries.