China’s Ministry of Commerce added 20 Japanese entities to its export control list on Monday, prohibiting the supply of dual-use items from both Chinese and foreign exporters. A further 20 entities were placed on a watch list subjecting them to stricter licensing requirements. The measures took immediate effect, obliging exporters to halt any ongoing shipments. The blacklisted organisations include the National Institute for Defense Studies, multiple subsidiaries of Mitsubishi Heavy Industries and Mitsubishi Electric, and specialist component suppliers such as Nikko Tokki and Aoki Seimitsu Kogyo. The watch list additions feature Mitsui E&S, the Mitsui Bussan Aerospace maintenance centre, and drone firm Terra Drone. This latest action brings the total number of Japanese entities under Chinese export restrictions to 40 since the first round was imposed in February.

According to statements from Beijing, the decision is intended to safeguard national security and fulfil international non-proliferation obligations. The commerce ministry said the targeted entities had “participated in enhancing Japan’s military capabilities.” A ministry spokesperson accused Tokyo of accelerating its pursuit of a “new form of militarism” and deploying offensive weapons, describing the Chinese measures as “entirely justified, reasonable and lawful.” For the 20 entities on the watch list, Chinese exporters must now submit risk assessment reports and written pledges that dual-use items will not be used for any purpose that could strengthen Japan’s military. The ministry stressed that the restrictions do not affect normal economic and trade exchanges between the two countries.

Tokyo responded with a formal protest. Chief Cabinet Secretary Minoru Kihara called the measures “totally unacceptable and extremely regrettable” and demanded their immediate withdrawal. The Japanese government said it would carefully examine the practical impact on affected entities before deciding on countermeasures. The diplomatic rift traces back to November, when Prime Minister Sanae Takaichi stated that a crisis over Taiwan could constitute an existential threat to Japan, potentially justifying collective self-defence. Beijing, which claims Taiwan as its own territory, condemned the remarks as interference in its internal affairs. In the months that followed, China cancelled flights to Japan, suspended seafood imports, returned giant pandas from a Tokyo zoo, and in February imposed the first round of export controls on 40 Japanese research institutes and companies. Japan has since deployed a Type-12 missile launcher on the remote island of Minamitorishima, a move analysts in the region view as a response to China’s expanding naval presence in the Pacific.

Viewed from Western capitals, the expansion of Chinese export controls is part of a broader pattern of using trade restrictions as a geopolitical lever. Last week, Beijing blacklisted 10 US entities, including rare earth producers, in retaliation for Washington’s own export curbs on Chinese firms. China dominates global production and refining of rare earths, which are critical for missile guidance systems, lasers, and other defence technologies. The Japanese entities now barred from receiving Chinese dual-use goods range from military research institutes to engineering and logistics firms embedded in Japan’s defence supply chain. The Japanese government has indicated it will assess the consequences before formulating a response, while China’s commerce ministry has left open the possibility of removing entities from the watch list if they cooperate with verification obligations. No further talks between the two sides have been announced.