China has escalated its trade and security confrontation with Japan by adding 40 Japanese companies to its export control lists, accusing them of supporting Tokyo's military buildup. The Chinese Ministry of Commerce announced on Monday that 20 entities were placed on its Entity List and another 20 on a watch list, citing their roles in advancing Japan's military capabilities and what Beijing calls 're-militarization.' This follows a similar round of listings in February that targeted 20 Japanese firms.
'Japan has refused to reflect on its actions and instead gone further down the wrong path, accelerating its pursuit of new-style militarism, deploying offensive weapons and launching offensive missiles from overseas,' a commerce ministry spokesperson said. 'The 20 entities placed on the control list are those involved in boosting Japan's military strength, while the 20 on the watch list failed to verify the end users or end uses of the dual-use items they handled.'
Beijing's Strategic Pressure
Chinese Foreign Ministry spokesperson Guo Jiakun, in a regular media briefing, urged Japan to 'turn back from the wrong path, correct its wrongdoings, do serious soul-searching and go back to the right track.' He stressed that the measures target only dual-use items and should not affect normal business exchanges between China and Japan. 'Japanese entities have no need to worry as long as they operate in good faith and in compliance with the law,' he added.
The listings come amid a broader deterioration in Sino-Japanese relations. In February, China added 20 Japanese entities, including Mitsubishi Heavy Industries Shipbuilding Co Ltd, Fujitsu Defense & National Security Ltd, and NEC Aerospace Systems Ltd, to its export control list. The two rounds of sanctions have now hit a total of 80 Japanese firms.
Wan Zhe, an economist and professor at Beijing Normal University, explained the rationale: 'The control list is defined by entities where there is a clear, confirmed national security risk. The 40 entities placed on China's Entity List are directly involved in boosting Japan's military strength, meeting the threshold for serious harm to national security and interests under the dual-use export control regulations.' She noted that the 40 companies on the watch list have not yet reached that threshold but remain closely monitored.
'The core goal of the measures is to curb Japan's military expansion capabilities at the supply chain level,' Wan said, adding that the policy is precisely targeted at risk, leaving the vast majority of compliant Japanese companies and normal trade unaffected.
Japan's Military Buildup
Beijing's latest export controls coincide with Tokyo's push to expand its long-range missile capabilities. In late March, Japan announced the deployment of its Type 25 missiles, its first long-range strike weapons capable of hitting ground and maritime targets at extended range. The series includes a surface-to-ship variant based in Kyushu and a hypersonic gliding variant based at Fuji, both with a range of over 1,000 kilometers, putting mainland China within reach. Tokyo plans to extend the hypersonic variant's range to 2,000 to 3,000 kilometers in future versions.
The missile deployment accompanied the largest overhaul of Japan's Maritime Self-Defense Force since its founding. Its main surface fleet units were merged into a new Fleet Surface Force, a new amphibious warfare unit was established in Sasebo, and the Air Self-Defense Force began building a dedicated space operations unit.
Fan Xiaoju, a research fellow at the China Institutes of Contemporary International Relations, described Japan's moves as part of a strategy to 'fundamentally strengthen its defense capabilities, using limited equipment and personnel to pursue far more aggressive military goals.' She warned that 'combined with the rising tide of populism and xenophobia inside Japan, the country is heading in an increasingly dangerous and uncontrollable direction.'
Japan's Prime Minister Sanae Takaichi, at a G7 summit in France on June 16, criticized China's export controls, arguing they risked disrupting partner nations' supply chains. She called on G7 members and multilateral development banks to build more resilient mineral supply chains.
The trade tensions also extend to critical materials. An article published by NetEase on June 22 reported that four major Japanese photoresist makers—Tokyo Ohka Kogyo, JSR, Shin-Etsu Chemical, and Fujifilm—had stopped accepting new orders for advanced argon fluoride (ArF) and extreme ultraviolet (EUV) photoresists, and trimmed orders for lower-end krypton fluoride (KrF) grades. These materials are essential for semiconductor manufacturing, with EUV photoresists used for the most advanced chip nodes below 7 nanometers. China's photoresist imports from Japan have reportedly fallen, highlighting the deepening tech rivalry between the two countries.
This development is part of a broader pattern of China leveraging export controls to counter perceived security threats, similar to its actions in other sectors. For context, Beijing has also been pushing for tech self-sufficiency, as seen in Nvidia's Beijing Pitch Fails as China Doubles Down on Tech Self-Sufficiency. Meanwhile, Japan's military modernization is reshaping regional security dynamics, with implications for the wider Indo-Pacific, including ongoing tensions in the South China Sea, as explored in China Tests Scarborough as Manila Seeks Alternatives to US Support.
