China tightens dual-use export controls on Japanese entities

China is placing 20 Japanese entities on a control list with absolute export prohibitions, and placing 20 others on a watch list with enhanced scrutiny, to curb Japan's re-militarization and nuclear ambitions, the Ministry of Commerce said on Monday.

Under the control list designation, Chinese exporters are prohibited from shipping any dual-use items - goods and technologies with both civilian and military applications - to the 20 listed entities.

The control list includes a batch of Japanese defense-related research institutes and companies, including the National Institute for Defense Studies, Ground Systems Research Center, Naval Systems Research Center, Air Systems Research Center, and multiple Mitsubishi-affiliated defense contractors.

The restriction also bars overseas organizations and individuals from transferring or providing Chinese-origin dual-use items to these entities, with any ongoing activities required to cease immediately.

For entities on the watch list, including Mitsui E&S and OKI Circuit Technology, Chinese exporters are barred from applying for general licenses or using simplified registration procedures when shipping dual-use items to the listed firms.

Instead, exporters must submit a risk assessment report and provide a written commitment that the items will not be used for any purpose that could enhance Japan's military capabilities.

The ministry will impose stricter end-user and end-use reviews for exports to watch list entities, and will not approve any exports involving Japanese military users, military purposes, or any other end uses that contribute to enhancing Japan's military capabilities. Review periods are not subject to standard statutory time limits.

A ministry spokesperson said the twin measures are "completely justified, reasonable and lawful", and are aimed at "curbing Japan's attempts at remilitarization and possession of nuclear weapons".

The decision comes after the initial round of controls imposed on Feb 24 failed to deter Japan's increasingly militaristic direction, including the deployment of offensive weapons and missile launches.

"Regrettably, over time, Japan has shown no signs of repentance, but has instead gone further down the wrong path, accelerating its new militarism and re-militarization," the spokesperson said.

The ministry emphasized that the measures target only a small number of Japanese entities and apply solely to dual-use items, and will not affect normal economic and trade exchanges between China and Japan.

"Japanese entities that act in good faith and comply with the law have absolutely no cause for concern," the spokesperson said, urging Japan to "change its erroneous ways, truly reflect and return to the right track".