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By Micah McCartney
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China has widened its export controls to target 40 Japanese defense contractors, research institutes and civilian firms with suspected defense establishment ties to stop what officials claim is a "new militarism" in Tokyo.
The Chinese Commerce Ministry announcement Monday marks the third round of restrictions since January and brings to 80 the number of Japanese organizations subject to partial or full restrictions on dual-use goods containing Chinese products.
Export Restrictions
Exporters—including those outside China—are prohibited from transferring or supplying Chinese-made dual-use goods to organizations and companies on the "control list," which includes defense contractors and research institutes accused of strengthening Japan's military capabilities—such as the National Institute for Defense Studies, the policy research arm of Japan's Defense Ministry.
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While companies on a separate "watch list" are not subject to an outright ban, exporters wishing to ship products to these entities must submit a risk assessment report and certify their products will not be used to support Japan's defense industry.
Among the 20 additions to this is Mitsui E&S Co., which previously built and repaired vessels for Japan's Self-Defense Forces but now focuses on industrial machinery, marine engines and port cranes.
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Only a "small number of Japanese entities" are affected, Guo Jiakun, a Chinese Foreign Ministry spokesperson, told reporters Monday. "They do not affect normal China-Japan economic and trade exchanges." Japanese companies that are in compliance with the law "have absolutely no reason for concern," he said.
"The irony is striking," Ken Moriyasu, senior fellow at Hudson Institute, told Newsweek, comparing China’s logic to what Beijing has criticized as the U.S.'s "small yard, high fence" bans on exports of advanced chips and chipmaking tools to China. "Xi Jinping has repeatedly criticized [the U.S. policy] as something a major country should not pursue and is counter to the laws of the market."
Japanese officials continue to push back.
The Commerce Ministry's announcement is "unacceptable" and out of step with international norms, Japanese Chief Cabinet Secretary Minoru Kihara said Monday.
Tokyo has lodged strong protests with China and called for the existing measures to be lifted, he said, adding the government would closely assess their impact and "take appropriate actions."
The Taiwan Connection
China has ramped up its "remilitarization" narrative rhetoric since Japanese Prime Minister Sanae Takaichi's remarks in November linking Japan's security to that of Taiwan, the self-ruled island Beijing claims as its territory and has vowed to bring under its control—by force if necessary.
A Chinese blockade of the island would constitute a "survival-threatening situation" that could warrant joint intervention alongside U.S. forces, Takaichi told lawmakers. Chinese officials have repeatedly demanded she retract the remarks and argued Tokyo's expansion of its Self-Defense Forces and the easing of curbs on weapons exports signal a return to Imperial Japan's militarism of the 1930s and 40s.
The Commerce Ministry update signals there is "little room for working-level negotiation," Moriyasu said. in Beijing, only Xi can decide to change course, with the next opportunity for him and Takaichi to ease tensions coming at the APEC (Asia-Pacific Economic Cooperation) summit China is hosting in Shenzhen in November, the analyst added.
"Takaichi is unlikely to retract her comments because technically she did not break new ground," Moriyasu said. "From Tokyo’s perspective, Beijing is overreacting—yet the tragedy is that nobody in the Chinese system is in a position to challenge Xi’s judgment once it is set."
Newsweek reached out to the U.S. State Department and Japanese Defense Ministry by email with requests for comment.
'New Militarism'
The new sanctions are necessary because Japan has "shown no remorse" and is instead "accelerating the pace of what China calls 'new militarism,' speeding up remilitarization, deploying offensive weapons, and launching offensive missiles overseas," the ministry said.
This statement was an apparent reference to the U.S. ally's plans to stand up anti-aircraft missiles on outlying islands and participation in live-fire drills for the first time in the Philippines during the U.S.-led Balikatan exercises in May.
Tokyo has also doubled its defense spending to 2 percent and loosened restrictions on exports of lethal weapons to partners in the region, citing China's military buildup and nuclear and missile threats from North Korea. Japan's postwar pacifist constitution bars it from waging offensive campaigns.
While Beijing has not published a comprehensive list of affected items, the export controls imposed since January cover rare earth elements and other critical minerals essential to advanced civilian and military technologies.
"This reflects China’s growing willingness to weaponize its dominance over rare earth minerals to pressure other countries’ critical sectors and attempt to deter them from continuing actions that Beijing views as challenging its interests," said William Yang, a senior analyst for Crisis Group, on X.
Update 7/3/26, 3:47 a.m. ET. This story has been updated with a comment from Ken Moriyasu and additional information.
Contact Newsweek editors on this story: Frances Mao and Tony Phillips
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