China and Japan is neighbor countries by water, because of the close geographical position and the history problem, there are all kinds of contradictions between China and Japan. On the other hand, Rare earth element is a kind of rare element, but it is the essential element for high-tech products. According to data analysis, China is the most rare earth resource-rich country in the world. Thus, China can provide a reliable basis for use of rare earth material, China provide about 90% rare earth supply in the world. For Japan, it is lack of rare earth elements resource in Japan, but Japan is the great power in the high-tech industry, Japan’s rare earth resource depends on import, most of the rare earth import from China. Rare earth is the strategic raw materials to China. China can take rare earth as key strategic chip using at the diplomacy negotiation table to solve its contradictions with Japan. However, exports and pricing power of China’s rare earth has been in a very passive position after being a member of WTO. How China can take a good use of rare earth in the international stage and especially dealing contradictions with Japan? whether can China take rare earth as a core key chip to deal with the conflicts and frictions with Japan to ensure and maintain China’s national core interests? In my thesis, It is mainly used the theory of Economic Statecraft to go through my thesis. It is mainly analyzed the trade situation on the both side of China and Japan, rare earth policies evolution in China and Japan, and the rare earth trade friction between China and Japan. I used these analysis and studies to prove that the rare earth to China can be the key strategic raw materials in Resource Diplomacy to maintain its core national interest with Japan.