Key Points
- China added 20 Japanese organisations to its export blacklist, taking the total to 40
- Beijing places another 20 Japanese firms on the watchlist over links to Japan’s military
- The move expands a months-long dispute over dual-use exports and rare earth supply chains
- China insists normal commercial trade remains unaffected despite the new restrictions
ISLAMABAD: China on Monday expanded export restrictions against Japan by placing 20 additional Japanese organisations on a blacklist and another 20 on a watchlist over dual-use technology exports and regional security.
China’s Ministry of Commerce said the newly blacklisted organisations had participated in activities that “enhance Japan’s military capabilities,” making them subject to export controls covering items with both civilian and military applications.
The ministry said the restrictions were introduced to safeguard China’s national security and national interests while fulfilling international obligations, including non-proliferation commitments.
Among the organisations newly placed on the blacklist are the National Institute for Defence Studies and Mitsubishi Electric Defence and Space Technologies Corporation. The list also includes a range of specialised engineering firms and technology suppliers involved in Japan’s defence sector.
In addition, China placed another 20 Japanese entities on a government watchlist. Chinese exporters dealing with these organisations will now be required to conduct additional risk assessments.
They will also have to provide guarantees that exported products will not be used to strengthen Japan’s military capabilities.
Chinese authorities said companies on the watchlist may apply for removal after completing official verification procedures under Chinese law.
A spokesperson for China’s Commerce Ministry defended the measures, saying Japan had “strayed further down the wrong path” by accelerating a “new form of militarism.”
The spokesperson maintained that the restrictions were “entirely justified, reasonable and lawful. They were not intended to disrupt normal economic and commercial exchanges between the two countries,” he added.
China-Japan trade and technology rivalry
Tensions intensified after Japanese Prime Minister Sanae Takaichi indicated in November that Tokyo could respond militarily if Taiwan came under attack.
Beijing considers the self-governed island part of its territory and has repeatedly vowed to bring it under its control, including through force if necessary.
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China responded in February by imposing export restrictions on dozens of Japanese companies linked to defence production, arguing that their activities threatened Chinese national security.
Since then, both governments have hardened their positions, with export controls emerging as one of the principal tools in their broader geopolitical competition.
Rare earths at the centre
China’s dominant position in rare earth production has become one of its most powerful economic leverage points.
The country accounts for the overwhelming majority of global rare earth processing capacity, supplying materials essential for electric vehicles, semiconductors, wind turbines, smartphones, advanced electronics, missile guidance systems, radar equipment and laser technologies.
Japan, alongside the United States and several European partners, has spent recent years seeking to diversify supplies of rare earth minerals and reduce dependence on Chinese producers.
Tokyo has invested heavily in alternative supply chains through Australia, Southeast Asia and Africa, besides promoting domestic recycling and research into substitute materials.
Japan has introduced tighter export controls on advanced semiconductor manufacturing equipment destined for China. In these moves, Japan has aligned more closely with the United States efforts to restrict Beijing’s access to cutting-edge technologies with potential military applications.
China has responded with increasingly sophisticated export controls on critical minerals, including gallium, germanium, graphite and rare earth products.
Analysts say the latest measures illustrate how commercial relations between the two neighbours are becoming increasingly influenced by strategic competition rather than purely economic considerations.
With security concerns, supply-chain resilience and advanced technology now dominating policymaking in both capitals, further trade restrictions remain possible despite both governments’ stated commitment to maintaining stable economic ties.
