China expands export controls on 40 Japanese entities amid rising tensions
5 verified3 unconfirmed
China announced new export restrictions on Monday, adding 40 Japanese entities to two separate control lists. The Chinese Commerce Ministry stated the measures target what it calls Japan’s “new militarism” and failure to correct its course following earlier actions in February. Twenty entities were placed on a control list that prohibits Chinese and foreign exporters from selling them dual-use items made in China. Another 20 entities were added to a watch list requiring enhanced licensing scrutiny and special permits for Chinese exporters. The move escalates tensions between Beijing and Tokyo that have increased since Japanese Prime Minister Sanae Takaichi last year suggested Japan could respond militarily if China attacked Taiwan. China has previously imposed similar export restrictions on Japanese firms in January and February 2026, including bans on rare earth minerals.
What’s verified
China added 20 Japanese entities to an export control list and 20 others to a watch list for dual-use items on Monday, June 29, 2026.
The Chinese Commerce Ministry cited Japan’s “remilitarization” and said Japan had “accelerated” its defense buildup since February.
The measures are linked to rising tensions after Japanese Prime Minister Sanae Takaichi’s comments last year suggesting Japan could intervene if China used military force against Taiwan.
In February 2026, China placed 20 Japanese companies on an export control list and another 20 on a watch list.
Dual-use items—goods with both civilian and military applications—are the focus of the restrictions.
Not yet confirmed
One source reports that the control list includes four Japanese government defense research institutes, while another source names multiple divisions of Mitsubishi Corporation in that category.
Single-source details include specific stock market reactions of affected companies, an economist’s estimate of a potential 1.3% GDP reduction for Japan from a rare earth cutoff, Japan’s deployment of a Type-12 missile launcher on Minamitorishima, and a joint statement by the UK, Germany, and France condemning Chinese activities.
Questions remain about the long-term economic impact on bilateral trade and how Japan will respond diplomatically.
Key figures
Chinese Commerce Ministry
Japanese Prime Minister Sanae Takaichi
Mitsubishi Electric
Mitsubishi Heavy Industries
Mitsui E&S Co.
Terra Drone Corporation
Fujitsu
Komatsu
National Institute for Defense Studies (Japan)
Sources: CNBC, abcnews.com
