TEXT OF STORY

STEVE CHIOTAKIS: The dispute between China and Japan over the detention of a boat captain is rippling.
Even though Japan released the captain Friday,
China now demands an apology. And Japan, meanwhile, wants compensation. But behind the tit-for-tat, shipping companies in Asia say China has tightened the flow of goods from its ports to Japan.

Marketplace China bureau chief Rob Schmitz reports.

ROB SCHMITZ: China-based employees of Japanese shipping company Nippon Express noticed something strange a couple of weeks ago. Chinese customs agents suddenly became more interested in the goods the company was shipping to Japan, says spokesman Naoki Seto.

NAOKI SETO: The inspection rate of commercial cargo has risen. It’s unusual. If it keeps going on, it will create difficulties for our business.

The Chinese government denies it’s slowing down the flow of goods to Japan. But one logistics company we spoke to said customs agents have been inspecting 90 percent of their shipments to Japan — that’s nine times the normal rate. A company spokesman said everything went back to normal this past weekend after Japan released the Chinese boat captain.

Nobody seems to be sure if the “rare earths” trade between the two countries is back to normal, though. China, which produces 97 percent of the world supply, had reportedly put a temporary hold on all exports to Japan. That’s been bad news for Toyota, Honda, and Nissan, which need rare earth metals to produce hybrid and electric vehicles.

In Shanghai, I’m Rob Schmitz for Marketplace.