China expands export controls on Japanese defense and tech firms
7 reported
China on Monday added four Japanese government defense research institutes to an export control list and imposed tighter restrictions on dozens of other Japanese entities, according to a CNBC report. The Ministry of Commerce blacklisted 20 entities, including the National Institute for Defense Studies and research centers for ground, naval, and air systems, as well as units under Mitsubishi Electric and Mitsubishi Heavy Industries. Separately, another 20 entities, including Mitsui E&S Co., drone maker Terra Drone Corporation, nuclear fuel processors, and units of OKI Electric Industry, were placed on a watch list requiring enhanced licensing scrutiny. The ministry stated that exports involving Japanese military users or any end-use that could strengthen Japan’s defense capabilities would not be approved. The measures are the latest escalation in a campaign that began in January, when Beijing banned dual-use exports to Japan, including rare earth elements and critical minerals. Market reactions were mixed, with Mitsubishi Electric and Howa Machinery declining around 1.4% and 4.6%, respectively, while Mitsubishi Heavy Industries and Terra Drone Corp gained 4.9% and 1.7%.
What’s reported
China blacklisted four Japanese government defense research institutes and added 20 entities to an export control list.
Another 20 entities were placed on a watch list requiring enhanced licensing scrutiny.
Domestic exporters and overseas organizations are prohibited from transferring Chinese-origin dual-use items to the named entities.
The ministry said exports involving Japanese military users or strengthening Japan’s defense capabilities would not be approved.
The campaign began in January with a ban on dual-use exports including rare earth elements and critical minerals.
In February, China added 20 entities to the export control list and another 20 firms to the watch list.
Market reactions: Mitsubishi Electric fell 1.4%, Howa Machinery fell 4.6%, Mitsubishi Heavy Industries rose 4.9%, Terra Drone Corp rose 1.7%.
Key figures
Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic & International Studies
Koki Akimoto, economist at Daiwa Institute of Research
Japanese Prime Minister Sanae Takaichi (mentioned in context of November comments)
Sources: CNBC
