Did China really ban rare earth metals exports to Japan?

In the aftermath of an East China Sea collision between a Chinese trawler and the Japanese coast guard in September 2010, tensions flared between Japan and China. The Chinese trawler captain was arrested but eventually let go after what appeared like political intervention from the Japanese government. It was also widely reported that there was a stop in Chinese exports of rare earth metals to Japan. As with most issues around the Senkaku/Diaoyu islands, few looked good. The ban of rare earths exports is now commonly cited as an example of Chinese policy-makers using economic levers for geopolitical purposes. For instance, a report by the International Crisis Group stated that China reportedly suspended shipments of rare earth metals in response to the ship captains arrest, and that many Japanese analysts remain convinced that the Chinese government had tailored the export restriction to punish Japan. Paul Krugman in the New York Times even described this as clear evidence that the Chinese government was willing to wage economic warfare on the slightest provocation.