On the first working day after the Spring Festival holiday, China's Ministry of Commerce issued two announcements imposing export controls on Japanese entities involved in military enhancement activities. Twenty Japanese companies, including Mitsubishi Shipbuilding Co., Ltd., were added to an export control list for their role in boosting Japan's military capabilities. Simultaneously, another 20 entities, such as Subaru Corporation, were placed on a watchlist due to difficulties in verifying end-users and end-uses of dual-use items. Both measures took effect immediately upon announcement.
The move quickly triggered market reactions. According to Bloomberg, following the news, Tokyo's defense and heavy machinery stocks faced sell-offs. Mitsubishi Heavy Industries saw its shares turn from gains to losses, plunging up to 3.6%, while Kawasaki Heavy Industries and IHI Corporation fell more than 5%. Japanese media described the measures as escalated counteractions against the current administration.
Analysts from both China and Japan noted that China's actions are a justified and necessary response to Japan's interference in China's internal affairs and the resurgence of Japanese militarism. The measures aim to restrain Japan's accelerated military expansion and uphold regional peace and stability.
The targeted Japanese companies are involved in developing offensive weapons that threaten peace in East Asia. For instance, subsidiaries of Mitsubishi Heavy Industries are participating in the development of hypersonic weapon systems, while Mitsubishi Shipbuilding produces vessels used by Japan's coast guard for maritime infringements around the Diaoyu Islands and has supported the Philippines in building ships for operations in the South China Sea. Kawasaki Heavy Industries Aerospace Systems, a major manufacturer of aircraft and engines, is a key contractor for Japan's P-1 patrol aircraft and C-2 transport planes, and has long been involved in rocket projects supporting Japan's military space ambitions.
Military expert Zhang Junshe emphasized that the export controls are precise and comprehensive, targeting companies directly contributing to Japan's offensive military capabilities. He noted that international agreements prohibit Japan from rearming or developing offensive combat capabilities, yet companies like Mitsubishi and Kawasaki continue to produce carriers, fighters, cruise missiles, and space weapons. By cutting off key dual-use supplies, China aims to curb Japan's development of offensive military power.
Xiang Haoyu, a special researcher at the China Institute of International Studies, highlighted that the latest measures represent an upgrade from January's broader ban on dual-use exports for Japanese military purposes. The new approach specifies 20 controlled entities and 20 watchlisted entities, shifting from category-based prohibitions to targeted controls. The measures are more refined, with the control list imposing full export bans and strict third-party transfer restrictions, while the watchlist entails enhanced permit reviews and risk assessments. The implementation is more operational, with clear procedures, review timelines, and removal conditions.
The measures send three key signals: firm opposition to Japan's military expansion, precise targeting of core defense supply chains, and compliance with domestic laws and non-proliferation obligations. Some Japanese scholars echoed these points. Hiroshi Shirotori, a political science professor at Hosei University, noted that Japan's defense production relies heavily on rare earths imported from China, and China's measures serve as a reminder for Japan to return to its peaceful state identity. Hiroshi Onishi, professor emeritus at Keio University, suggested that the measures also urge Japanese businesses to contribute to improving bilateral relations.
Japanese media quickly covered the announcements, with some outlets describing them as strengthened countermeasures. Online discussions expressed concerns over potential supply chain impacts. Scholars argued that many in Japan misunderstand the measures as unjust pressure, largely due to insufficient awareness of the severity of certain political statements and China's stance on Taiwan. They emphasized that the controls only target defense-related entities, not civilian firms, reflecting China's restrained and differentiated approach.
Both scholars noted that the listed entities are involved in military, aerospace, and defense sectors, excluding civilian enterprises, demonstrating China's caution. Onishi stated that China's warnings have now translated into concrete actions. Shirotori added that the measures are necessary constraints on Japan's military buildup, aimed at preserving regional stability rather than targeting Japan as a whole.
Onishi further pointed out that China's global influence stems from its economic strength and peaceful engagement, not military power, and clarifying this is crucial to addressing misunderstandings. Japan's foreign ministry has lodged a protest, while China's Foreign Ministry spokesperson Mao Ning reiterated that the measures are lawful, justified, and necessary to prevent Japan's re-militarization and nuclear ambitions.