China has implemented export restrictions on 40 Japanese entities, citing concerns about Japan's "remilitarization" and safeguarding national security.
The measures, which target dual-use items with both civilian and military applications, follow remarks made by Japanese Prime Minister Sanae Takaichi in November concerning Taiwan. Tokyo has formally protested the restrictions, describing them as unacceptable and divergent from international practices.
Overview of Restrictions
China's Ministry of Commerce announced new export restrictions, effective immediately on Tuesday, categorizing 40 Japanese companies into two lists. These measures impact their ability to import certain Chinese-origin goods.
Export Control List
Twenty Japanese entities are now on an "Export Control List," prohibiting them from importing dual-use goods from China. Foreign organizations and individuals are also barred from supplying Chinese-origin dual-use items to these entities.
The ministry stated: "All ongoing related activities must cease immediately."
Entities on this list include multiple subsidiaries of Mitsubishi Heavy Industries, involved in shipbuilding, aircraft engines, and maritime machinery, as well as parts of Kawasaki Heavy Industries and Fujitsu.
Watchlist
A separate "Watchlist" comprises 20 other Japanese companies. For these entities, Chinese exporters are required to submit individual export license applications, provide risk assessment reports, and issue written pledges confirming that dual-use items will not be utilized by Japan's military.
Companies on this list include Subaru Corporation, Mitsubishi Materials Corporation, and the Institute of Science Tokyo.
Scope of Dual-Use Items
While the ministry did not initially specify all exact exports impacted, its catalogue of dual-use items generally includes rare earth elements, advanced electronics, aerospace and aviation components, drones, and nuclear-related technology. Rare earth elements are components in electronics and advanced weapon systems.
Japan's Deputy Chief Cabinet Secretary, Kei Sato, noted that it is currently unclear if rare earths trading is included under these new restrictions, despite an earlier report from China's Ministry of Commerce mentioning certain rare earth elements.
China's Justification and Stance
A spokesperson for China's Commerce Ministry stated that the restrictions were imposed in response to Prime Minister Takaichi's comments, citing "safeguarding national security and interests." Beijing described the comments as an interference in China's internal affairs and a violation of the One-China principle.
The ministry further asserted that these measures, aimed at curbing Japan's remilitarization and nuclear ambitions, are "entirely legitimate, reasonable, and legal."
China clarified that the restrictions target only a "small number of Japanese entities" and specific dual-use items, assuring that:
"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 ministry also stated that any organization or individual from any country found to be in violation of these export restrictions would be held legally accountable.
Japan's Response
Tokyo formally protested China's actions, with Japan's Foreign Ministry stating that the restrictions, which solely target Japan, diverge significantly from international practices.
Japan's Foreign Ministry described the restrictions as "absolutely unacceptable."
Masaaki Kanai, head of Japan’s Asian and Oceanian Affairs Bureau, and Kei Sato, Japan’s deputy chief Cabinet secretary, communicated Japan's position. Sato called the measures "deplorable" and urged China to lift them. He indicated that Japan would examine the details of the measures, including potential impacts on rare earths trading, and would "take actions accordingly."
Company Impact
Representatives from some affected companies, such as industrial equipment supplier Yashima Denki Co. and chemical manufacturer NOF Corp., both on the watchlist, indicated they anticipate minimal impact due to their limited trade relations with China.
Background and Context
The new restrictions follow remarks made by Japanese Prime Prime Minister Sanae Takaichi in November during a parliamentary session. She stated that a Chinese invasion of Taiwan would constitute "a situation threatening Japan's survival." China considers Taiwan its territory and a breakaway province, maintaining a policy of unification, by force if deemed necessary. Beijing also objects to foreign governments expressing support for Taiwan's sovereignty.
Since Takaichi's statements, Beijing has implemented various economic measures affecting Japan, including reductions in flights to Japan, warnings to its citizens regarding travel and study in the country, and a suspension of seafood imports from Japan.
China has historically utilized its position in the rare earths supply chain for economic leverage.
In 2010, similar restrictions on rare earth shipments to Japan were implemented following a diplomatic dispute concerning the disputed Senkaku Islands (known as Diaoyus in China).
China also imposed rare earth controls during a trade dispute with the United States.
Takaichi's party recently secured a parliamentary election victory, which may facilitate a conservative shift in Japan's security and other policies.