China's commerce ministry: Restrictions on 20 Japanese entities designed to prevent Japan's remilitarisation and pursuit of nuclear capabilities

China’s commerce ministry has imposed export restrictions on 20 Japanese entities, citing concerns over Japan’s potential remilitarization and nuclear ambitions. The move, announced on February 24, prohibits the export of dual-use items including rare earth elements and critical minerals—used in defense and advanced manufacturing applications. The affected entities include divisions of major Japanese industrial firms such as Mitsubishi Heavy Industries and subsidiaries of Itochu Aviation and Subaru Corp.

The restrictions are part of a broader strategy to limit the transfer of materials that could enhance Japan’s military capabilities. China’s commerce ministry emphasized that the measures are targeted and do not affect general trade between the two countries. However, the move has raised concerns among Japanese officials, with Deputy Chief Cabinet Secretary Kei Sato calling the restrictions unacceptable.

The timing of the restrictions follows a period of heightened tensions between Beijing and Tokyo, including Japanese Prime Minister Sanae Takaichi remarks on Taiwan and Japan’s accelerated defense spending plans. Japan has been working to diversify its rare earth supply chains, but remains heavily reliant on Chinese imports, with 63% of rare earth imports coming from China in 2024. The new restrictions could test the resilience of these supply chains, particularly as Japan expands its defense sector.

While China has assured that the measures will not disrupt normal economic exchanges, the move signals Beijing's control over critical minerals. Analysts suggest that the restrictions are not only a response to Japan’s military posture but also a warning to other countries that align with Taiwan or challenge China’s strategic interests.