China targets more Japanese companies with export controls

China expanded export controls on June 29 to cover 40 Japanese entities, widening trade restrictions in the latest escalation of its dispute with Tokyo.

The measures split the affected organizations into two groups: 20 entities were placed on a control list, while 20 more were added to a watchlist-style category that brings heightened scrutiny to relevant exports. The restrictions apply to dual-use goods, or items that can be used for both civilian and military purposes.

Reports from the Associated Press, the Financial Times and The Wall Street Journal all said the new controls were part of a broader deterioration in China-Japan relations. The outlets agreed on the core action, although they described some of the named entities differently.

What China did

China’s commerce ministry added the Japanese entities to export-control categories that can restrict access to Chinese industrial inputs and other dual-use materials. The control-list designation is the stricter of the two measures, while the watchlist imposes tighter review and licensing scrutiny.

According to AP, the control-list group includes parts of Mitsubishi Corporation, while the watchlist includes entities linked to Mitsui E&S, Fujitsu and Komatsu. The Financial Times said the newly affected organizations also include subsidiaries of Mitsubishi Electric and Mitsubishi Heavy Industries, along with Japan’s National Institute for Defense Studies.

The practical effect is to make it harder for the targeted firms and institutions to receive Chinese exports that may be important for manufacturing, defense-related research or other industrial supply chains.

Why it matters

The action comes as Beijing and Tokyo are locked in a wider dispute over Taiwan and Japan’s security posture. The reports said China has presented the restrictions as tied to what it sees as Japan’s remilitarization.

The stakes go beyond diplomacy. Japanese firms in sectors such as defense, shipbuilding, electronics and semiconductor-related manufacturing could face disruption if approvals slow or shipments are denied.

China has already used export controls against Japanese entities earlier in 2026, making this move a further escalation rather than an isolated step.

What comes next

A full list of the 40 entities and any exemptions had not been publicly detailed in the reporting reviewed for this story. It was also not clear whether the measures are meant to be temporary, symbolic or part of a longer enforcement campaign.

The immediate questions are whether Japan’s government issues a formal protest, whether affected companies disclose shipment or licensing problems, and whether Beijing follows with additional controls. For now, the new restrictions mark another sharp turn in a trade dispute with direct implications for supply chains and bilateral relations.