China Expands Export Controls on Japanese Defence Firms Over Security Concerns

Ministry of Commerce cites national security concerns as reason for move

· China's Ministry of Commerce announced on 29 June 2026 that it has added 20 Japanese entities involved in enhancing Japan's military capabilities to its export-control list.

· Another 20 Japanese entities were placed on a watch list for increased scrutiny.

· Beijing said the measures are intended to safeguard China's national security, fulfil international non-proliferation obligations, and deter what it described as Japan's "remilitarisation" and attempts to acquire nuclear weapons.

· Chinese authorities stated that the restrictions target only dual-use items (goods with both civilian and military applications) and affect only a small number of Japanese entities.

· China maintained that the measures will not disrupt normal China-Japan trade, assuring law-abiding Japanese businesses they have "nothing to worry about."

· The export-control list includes Japan's National Institute for Defense Studies, military research institutes for ground, naval and air weapons systems, and several subsidiaries of Mitsubishi Electric and Mitsubishi Heavy Industries.

· Nippi Corporation, a subsidiary of Kawasaki Heavy Industries, was also included.

· The latest action follows similar restrictions imposed in February 2026, when China placed 20 Japanese entities on its export-control list and another 20 on a watch list.

· Under the restrictions, Chinese exporters are prohibited from supplying dual-use goods to entities on the export-control list.

· China accused Japan of accelerating a "new type of militarism", increasing offensive military deployments and overseas missile operations.

· Beijing cited Japan's participation in the Balikatan 2026 military exercise, during which Japanese forces fired a Type 88 surface-to-ship missile in the Philippines, describing it as Japan's first overseas launch of an "offensive" weapon since World War II.

· Chinese Foreign Ministry spokesperson Lin Jian said the missile test marked a significant departure from Japan's post-war pacifist policy.

· Analyst Xu Weijun described the new restrictions as an institutionalised and precision-targeted economic security measure aimed at Japan's military-industrial supply chain.

· Xu said Beijing is not seeking a full-scale economic confrontation, as the measures target only specific military-related entities while preserving normal commercial relations.

· The restrictions could affect rare earth supplies used in Japanese military technologies, including high-tech sensors and precision-guided munitions.

· Xu noted that non-targeted Japanese companies can still access Chinese rare earths, but exporters may apply stricter compliance checks and require additional information on end-use and resale channels before approving shipments.

[ABS News Service/29.06.2026]

The Ministry of Commerce said on Monday (29.06.2026) that to deter Japan’s “remilitarisation” and its attempts to “acquire nuclear weapons”, it has added 20 Japanese entities “involved in enhancing Japan’s military capabilities” to an export-control list.

Twenty Japanese entities have also been added to a separate watch list.

The moves were made to safeguard China’s national security and interests and to fulfil international obligations such as non-proliferation, the ministry added.

A ministry spokesperson said that China’s actions were in accordance with the law, were only aimed at a “small number” of Japanese entities, and only targeted dual-use items.

“They will not affect normal economic and trade exchanges between China and Japan, and honest and law-abiding Japanese entities have absolutely nothing to worry about,” the spokesperson said.

The entities added to the export-control list include Japan’s National Institute for Defense Studies and military research institutes for ground, naval and air weapons systems.

They also include several entities under the umbrella of Mitsubishi Electric and Mitsubishi Heavy Industries, with businesses that span defence and space systems, specialised software development, precision instrument manufacturing, engineering services, logistics, maritime technology and technical support for special vehicles.

Nippi Corporation, a Kawasaki Heavy Industries subsidiary that is Japan’s premier specialist aerospace company, is also on the list.

In February, 20 Japanese entities, including some of Japan’s largest companies, were put on China’s export-control list and 20 more on a watch list to step up scrutiny of trade in selected goods and apply more economic pressure on Tokyo. Those moves followed an announcement by Beijing in January that it was strengthening export controls for dual-use items.

Chinese exporters have been banned from shipping dual-use goods – items with military and civilian applications – to the firms and institutions on the export-control list.

“Unfortunately, for some time now, Japan has not repented but has instead gone further down the wrong path, accelerating its ‘new type’ of militarism, speeding up remilitarisation and deploying offensive weapons and launching offensive missiles overseas,” the spokesperson said.

In early May, China condemned what it called Japan’s first “offensive missile” test overseas in eight decades, saying Tokyo’s “neo-militarism” and intensified arms race had gained momentum and threatened regional stability.

During the “Balikatan 2026” joint drill led by the United States and the Philippines, Japanese forces fired a Type 88 surface-to-ship missile in the Philippines.

China said it was the first time Japan had launched an “offensive” weapon abroad since World War II. The missile can be used for both offensive and defensive purposes, but deploying it outside Japanese territory could be seen as an offensive posture.

Chinese Foreign Ministry spokesman Lin Jian said it marked a significant departure from Japan’s post-war pacifist stance.

Xu Weijun, a public policy analyst at South China University of Technology, said the latest additions to the export-control list marked a major escalation.

“It’s more than routine control; it’s an institutionalised, precision-targeted economic security countermeasure designed to restrict the Japanese military industrial chain’s access to Chinese dual-use items … it’s a harsh response to Japan’s militarism,” he said.

But Xu said Beijing had no appetite for a full-scale economic war since only a small number of Japanese entities were targeted.

“China is drawing a distinction between military entities and honest, law-abiding Japanese enterprises,” he said. “It will not disrupt normal relations between the two largest economies in Asia.”

Xu said there would be an impact on rare earth supplies. These are critical in some of the equipment used by Japan’s military, including hi-tech sensors and precision-guided munitions.

“It depends on whether rare earth items are deemed dual-use and the end-user is on the list or not,” he said. “Not all Japanese importers will automatically lose legitimate access simply because of their nationality.

“But Chinese exporters may exercise greater caution for compliance and suspend or delay deals. Japanese importers not targeted may be required to furnish more information on final use and resale channels.”