China adds 20 Japanese entities to watchlist on dual-use risk

China has added 20 Japanese entities to a watchlist targeting dual-use items, intensifying its export control measures amid escalating diplomatic tensions with Japan. The move, announced by the Ministry of Commerce (MOFCOM), follows concerns over Japan’s military modernization efforts, including its push to lift restrictions on arms exports and develop offensive capabilities. Entities on the watchlist include firms involved in defense-related research and production, such as subsidiaries of Mitsubishi Heavy Industries, Kawasaki Heavy Industries, and the National Defense Academy of Japan.

Under the new restrictions, Chinese exporters must submit detailed risk assessments to ensure that dual-use items—products with both civilian and military applications—are not used to enhance Japan’s military strength. The measures apply not only to direct exports but also to transfers through third countries, reflecting China’s broader regulatory reach. MOFCOM emphasized that the restrictions are narrowly tailored to specific entities and will not disrupt general trade relations between the two countries.

The move is part of a broader pattern of export controls China has imposed on the U.S. and Taiwan, often in response to geopolitical developments. Legal frameworks such as the Export Control Law and the Anti-Foreign Sanctions Law provide the basis for these measures, which are framed as necessary for safeguarding national security and fulfilling international non-proliferation obligations. Companies affected by the restrictions are advised to conduct thorough due diligence and consider alternative sourcing strategies to mitigate supply chain risks.