China tightens Japanese trade restrictions as spat worsens
China's commerce ministry said that only a small number of Japanese entities are targeted and that "honest and law-abiding Japanese entities have nothing to worry about".
A cargo ship with containers at a terminal of the Yantian port in Shenzhen, Guangdong province, China on Oct 30, 2025. (File photo: Reuters/Tingshu Wang)
BEIJING: China imposed export restrictions on 40 Japanese companies on Tuesday (Feb 24), citing national security concerns, as Beijing escalated a months-long row that has seen Chinese tourism to Japan plummet.
The spat between Asia's top two economies was sparked by comments by Prime Minister Sanae Takaichi in November that Japan could intervene militarily in any attack on self-ruled Taiwan.
The measures announced on Tuesday cover exports of "dual-use" items - which can have civilian and military uses - to 20 Japanese entities, including five subsidiaries of Mitsubishi Heavy Industries as well as Japan's space agency.
The commerce ministry added a further 20 Japanese organisations, including automaker Subaru, to a "watch list" requiring stricter reviews of exported items that could be used for military purposes.
"The above measures are aimed at curbing Japan's 'remilitarisation' and nuclear ambitions and are completely legitimate, reasonable and lawful," a commerce ministry statement said.
"Honest and law-abiding Japanese entities have nothing to worry about," it added.
Japan said Tuesday that export restrictions imposed by China on 40 Japanese companies were "absolutely unacceptable and deeply regrettable".
"We have strongly protested these measures and demanded their withdrawal," government spokesman Kei Sato said.
A Japanese trade ministry official earlier told AFP that Tokyo would "take appropriate measures" after analysing the impact of the new curbs.
Takaichi's comments on Taiwan, which China views as its territory and has not ruled out taking by force, have enraged Beijing.
The most visible consequence is a sharp drop in Chinese visitors to Japan - 61 per cent in January - after Beijing warned its citizens against going there.
In December, J-15 jets from China's Liaoning aircraft carrier twice locked radar on Japanese aircraft in international waters near Okinawa, according to Japan.
China has reportedly suspended imports of Japanese seafood. Japan's last two pandas were also returned to China last month.
Last month, China announced tightened controls on exports to Japan for items with potential military uses.
This fuelled worries that Beijing may choke supplies of vital rare-earth minerals, some of which are included in China's list of "dual-use" goods.
SHARES TUMBLE
The latest move singles out dozens of Japanese industrial heavyweights, including shipbuilding and aerospace firms.
Shares in Kawasaki Heavy Industries sank almost 5 per cent in Tokyo, while Mitsubishi Heavy Industries shed close to 4 per cent and IHI tumbled nearly 7 per cent.
Several of the firms listed are indeed active in the defence industry, manufacturing kits including ships, fighter jets and missiles for the Japanese military.
Japan has been shedding its strict pacifist stance, moving to obtain "counterstrike" capabilities and to ease rules on exporting lethal defence equipment.
Takaichi's government in December approved a record defence budget worth nine trillion yen (US$58 billion) for the coming fiscal year to expand its military capabilities.
Takaichi told parliament on Friday that China was intensifying attempts to change the status quo "by force or coercion" in the East China Sea and the South China Sea.
"Strengthening our defence capabilities is essential to protect the lives and peaceful livelihoods of our citizens as we face the most severe and complex security environment since the end of (World War II)," Takaichi said on Monday.
Japanese firms dealing with China were already struggling with delays in getting approvals, said Noriyuki Kawamura, professor emeritus of Japan-China relations at Nagoya University of Foreign Studies.
"With today's announcement, we can expect the process will be made even more stringent. I believe this will be a huge blow to companies involved," Kawamura told AFP.
