China adds 20 Japanese defence-linked entities to export blacklist, citing remilitarisation push

The new restrictions

China’s Ministry of Commerce announced on Monday that it had added 20 Japanese entities to its export control list, prohibiting Chinese firms from supplying them with dual-use goods without prior approval. The ministry said the move targets Japan’s “new militarism” and nuclear ambitions, describing the action as “entirely legitimate, reasonable, and lawful”. The blacklisted organisations include the National Institute for Defense Studies, several Mitsubishi Heavy Industries and Mitsubishi Electric subsidiaries, Kawasaki Heavy Industries, and other firms linked to defence research and manufacturing. Another 20 entities – among them Mitsui E&S, Terra Drone, Hitachi Advanced Systems, and several nuclear-fuel and parachute makers – were placed on a watchlist requiring risk assessments and written pledges that exports will not bolster Japan’s military capabilities.

China’s lawful action only targets a small number of Japanese entities, the relevant measures apply only to dual-use items, which does not affect the normal economic and trade exchanges between China and Japan.

Tokyo’s protest

Japan’s Chief Cabinet Secretary Minoru Kihara told reporters the measures are “absolutely unacceptable and extremely regrettable” and that Tokyo had lodged a formal protest. “The export control measures, which target only our country, differ significantly from international practices,” Kihara said, adding that the government would “closely examine the details and impact” before deciding on further steps.

Roots of the dispute

Relations between Asia’s two largest economies have deteriorated since late 2025, after Prime Minister Sanae Takaichi suggested that Japan could exercise collective self-defence if China attempted to take control of Taiwan. Beijing, which claims sovereignty over the island, reacted angrily. It began tightening export controls on dual-use items destined for Japan in January, blacklisted a first batch of 20 entities in February, and in May detained two Fuji Electric employees on suspicion of smuggling rare-earth materials.

Rare-earth leverage

Dual-use goods covered by the restrictions include rare earths, a group of minerals essential for high-tech and defence manufacturing. China dominates global production and refining; Japan sources roughly 70% of its rare-earth imports from China. By widening the blacklist, Beijing is raising the stakes in a relationship already strained by historical grievances and territorial disputes.