The move to delay shipments may be in retaliation for Tokyo's handling of the arrest of a Chinese trawler captain after his vessel collided with two Japanese Coast Guard boats in disputed waters, The Daily Yomiuri said.

It said Tokyo was investigating if Chinese customs stiffened inspections of Japan-bound exports of rare earth minerals used for high-tech products and ordinary goods exported to and imported from Japan, quoting government sources.

Shanghai customs authorities have now made 100 percent of Japan-related imports and exports subject to inspection, up from 30 percent, the report said. Quarantine inspections of commodities are up to 50 percent from 10 percent. Many air cargoes bound for Japan, including electronics parts, remained in Shanghai as a result, it said, with similar measures taken in Fujian, Guangdong and Liaoning Provinces.

Shanghai customs did not immediately reply to an AFP request for comment.

An official at Shanghai Haihua Shipping Co Ltd who declined to be named told AFP that its customers were reporting slower customs clearance times.

"We did receive complaints of difficulties from our clients. We have suggested that clients start the clearance procedure as early as possible," the official said.

Tokyo-based traders told AFP that China blocked rare earth exports to Japan days before Japan's decision Friday to free a Chinese boat captain whose detention sparked the worst diplomatic row between the sides in years.

Beijing denied reports it had prevented shipments of the rare minerals that many of Japan's top exporters, such as the world's biggest automaker Toyota, rely on to make cutting-edge products ranging from car batteries to computers.

But traders in Tokyo said China had blocked exports to Japan of key minerals by slowing down administrative procedures in ports in Shanghai and Guangzhou to prevent materials being loaded on ships.

Japan's economy minister said Friday that tensions with China pose "serious" risks to Japan.

The bitter dispute showed no sign of easing at the weekend when, despite the skipper's release, China repeatedly demanded that Japan apologise over the incident and pay compensation over the detention.

Japan on Monday said it would ask China to pay for damage to the two coastguard boats and called on its giant neighbour to the east to repair the relationship between the two.

China is still holding four Japanese nationals it detained last week for allegedly filming a military installation.

earlier related report
Jailed tycoon stages corporate showdown at China's GOME
Hong Kong (AFP) Sept 28, 2010 - GOME shareholders will vote Tuesday on whether to oust the company's chairman in a bizarre corporate showdown staged by the jailed tycoon who founded China's biggest household appliance chain.

From his prison cell, billionaire Huang Guangyu has waged a bitter war against GOME management, asking shareholders to vote Tuesday on his proposal to sack chairman Chen Xiao while installing his sister and lawyer on the company's board.

Huang, sentenced in May to 14 years in jail for bribery and insider trading, is also trying to block the Hong Kong-listed firm from issuing new equity that would dilute his family's position as its biggest shareholder.

The vote comes amid a nasty power struggle for control of the business empire that the high school-dropout built from scratch. Huang was once listed as China's richest man before his stunning fall from grace.

GOME's bosses have railed against Huang's proposals, warning that he was not acting in shareholders' interests and saying they have the support of US private equity firm Bain Capital, which owns about 10 percent of the chain.

The firm, which has about 1,100 retail stores across China, has sued Huang over alleged breaches of fiduciary duty while he served as a director in 2008.

GOME's management has garnered support from several investor rights and advisory groups, including Glass, Lewis & Co., a major institutional shareholder advisor.

If shareholders vote down Huang's proposals, it would be a "victory for corporate governance", said Jamie Allen, secretary general of Hong Kong-based Asian Corporate Governance Association.

"It is a very unusual situation," Allen told AFP, adding: "If I were a small shareholder, I'd rather the current management win."

Several top Chinese police officials were ensnared in Huang's corruption case, including the former assistant minister of public security who was sentenced to death with a two-year reprieve, according to state media reports. A suspended death sentence is usually commuted to life in prison.

In August, Beijing's High Court freed Huang's wife Du Juan on parole after commuting her three-year prison term for insider trading, but upheld his sentence. Huang was also fined 800 million yuan (120 million US dollars).

Huang then upped the ante by threatening to cut contracts between the company and hundreds of stores he still owns if the chairman Chen was not sacked. The threat was dismissed as an "empty ultimatum" by GOME management.

GOME's founder reportedly staged a flip-flop two weeks later by offering to sell hundreds of stores back to the chain while asserting his control over the well-known brand.

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