China moved to restrict dual-use exports to 20 Japanese entities, a fresh escalation in trade frictions amid already strained bilateral ties.
Summary:
-
China’s Commerce Ministry adds 20 Japanese entities to an export control “watch list”
-
Measures ban exports of dual-use items to listed entities without licences
-
Overseas parties also barred from re-transferring China-origin dual-use items to them
-
Beijing cites inability to verify end-users/end-uses, and frames move as curbing Japan “remilitarisation”
-
Includes names such as Subaru, Mitsubishi Materials, Sumitomo Heavy Industries and aerospace trading units
China’s Commerce Ministry said it will place 20 Japanese entities on its export control list, tightening restrictions on shipments of dual-use items in a move that underscores the chill in Japan–China relations and adds a new layer of uncertainty for sensitive supply chains.
Under the measures, export operators are prohibited from exporting dual-use items to the named entities, while overseas organisations and individuals are also prohibited from transferring or providing dual-use items originating from China to those companies. Exporters will be required to apply for individual export licences, and entities may apply for removal from the watch list.
Beijing said the entities were added because authorities were unable to verify end-users and end-uses for dual-use items—language typically used to justify tighter controls on goods with potential civilian and military applications. The ministry also framed the measures as aimed at curbing Japan’s “remilitarisation” and alleged nuclear ambitions, while insisting the steps are legitimate, reasonable and lawful.
At the same time, China sought to ring-fence broader trade ties, saying the measures would not affect “normal” economic and trade exchanges, and adding that Japanese entities operating “in good faith” and complying with the law have no cause for concern.
The watch list includes companies such as Subaru Corp, Mitsubishi Materials Corp, Sumitomo Heavy Industries, and aviation and aerospace-related firms including Fuji Aerospace, Itochu Aviation and Mitsui Bussan Aerospace—names that sit close to industrial, materials and aerospace supply chains where dual-use components can be embedded in otherwise commercial products.
The decision lands against a backdrop of ongoing diplomatic strain, including simmering tensions since late 2025 after comments by Japan’s prime minister on Taiwan that drew sharp pushback from Beijing. Those remarks amplified longstanding Chinese concerns about Japan’s security posture and its alignment with U.S.-led regional deterrence efforts. This week’s export control action appears consistent with a pattern of using trade and regulatory tools to signal displeasure while attempting to avoid overt disruption to headline bilateral commerce.
For markets, the key issues are scope and enforcement. The requirement for individual licences can slow procurement, raise compliance costs and encourage supply chain re-routing, especially where China-origin inputs are difficult to substitute in the near term. Even if Beijing maintains that “normal” trade will continue, the move raises the risk premium around Japan-facing shipments in sectors such as advanced manufacturing, materials processing and aerospace components.
