China has sharply escalated its retaliation against Japan’s accelerating military expansion under Prime Minister Sanae Takaichi, imposing sweeping export bans and blacklisting some of the country’s most critical defense and technology institutions in a move that deepens one of the most consequential strategic rifts in East Asia.
On February 24, China’s Ministry of Commerce announced an immediate ban on the export of dual-use items — goods with both civilian and military applications — to 20 Japanese entities. Another 20 organizations were placed on a watch list, subjecting them to heightened scrutiny and potential future restrictions.
A spokesperson for China’s Foreign Ministry, quoted by the state-run Global Times, said the measures were intended “to stop Japan’s attempts to remilitarize itself and possess nuclear weapons,” underscoring Beijing’s growing alarm over Tokyo’s security trajectory.
The sanctions represent the most direct economic retaliation yet against Japan’s defense sector since Takaichi took office following her commanding election victory on February 8. They also signal that Beijing is prepared to escalate beyond rhetoric in response to Tokyo’s increasingly vocal support for Taiwan and its expanding military capabilities.
Tensions between the two countries have intensified steadily over the past year. In November, Takaichi warned that any Chinese military action against Taiwan would constitute an “existential threat” to Japan — language rarely used by Japanese leaders in reference to Taiwan’s security.
From Beijing’s perspective, Japan’s new defense posture — which includes plans to boost military spending, acquire long-range strike capabilities, and deepen coordination with the United States and regional partners — mirrors the threat perception Tokyo projects onto China.
The Japanese government lodged a formal protest against the new sanctions and demanded their withdrawal. However, analysts say Tokyo has limited leverage to compel Beijing to reverse course, especially as the measures target sectors where China retains supply chain dominance, including rare earth materials and specialized components.
Rather than softening its stance after Takaichi’s election victory, Beijing appears to be tightening pressure. In January, China restricted exports of rare earth metals, permanent magnets, and other critical materials used in advanced weapons production and aerospace systems — a reminder of its pivotal role in global supply chains.
The diplomatic chill has also spilled into softer domains. The number of Chinese tourists traveling to Japan has reportedly fallen by roughly half, cultural exchanges have been canceled, and the last two giant pandas in Japan — long symbols of Beijing’s so-called “panda diplomacy” — were returned to China with no replacements planned.
The newly announced export ban strikes at the heart of Japan’s defense-industrial base. Among those targeted are divisions of Mitsubishi Heavy Industries, the country’s largest defense contractor and a cornerstone of its naval and aerospace programs. Subsidiaries specializing in shipbuilding, aero engines, maritime systems, and turbochargers are included.
Also sanctioned is Kawasaki Heavy Industries, particularly its aerospace systems division and affiliated engineering firms. Kawasaki plays a major role in aircraft manufacturing and missile development.
IHI Corporation — formerly Ishikawajima-Harima Heavy Industries — and several of its aerospace and power systems subsidiaries are on the list as well, further expanding the impact across Japan’s air and maritime capabilities.
In the telecommunications and electronics sphere, defense-focused arms of Fujitsu and NEC have been targeted, affecting network systems, sensors, and aerospace electronics critical for command-and-control systems.
Shipbuilding giant Japan Marine United and its defense subsidiary are also banned from receiving dual-use exports, potentially complicating naval construction and maintenance.
Significantly, the sanctions extend beyond private corporations to state institutions. The National Defense Academy of Japan and the Japan Aerospace Exploration Agency (JAXA) are included in the ban — an unprecedented move targeting Japan’s military education and space research infrastructure.
The additional 20 entities placed on the watch list span sectors from aerospace and automotive manufacturing to advanced materials and research institutions. Among them are Subaru Corporation, which has aerospace divisions; energy giant ENEOS Corporation; and electronics firms such as TDK Corporation.
Trading houses and materials producers, including Mitsubishi Materials Corporation, were also flagged. Chinese authorities said they were unable to verify the ultimate end users and end uses of exported dual-use items involving these entities.
In a statement, China’s Ministry of Commerce insisted that its “lawful listing actions target only a small number of Japanese entities” and that the measures would not affect “normal economic exchanges and trade between China and Japan.” It added that “honest and law-abiding Japanese entities have nothing to worry about.”
However, the breadth of sectors covered — ground forces, naval shipbuilding, aerospace engineering, electronics, and space research — suggests a comprehensive effort to constrain Japan’s defense modernization.
Takaichi’s supporters had hoped her decisive electoral mandate would strengthen her negotiating position with Beijing. Instead, China’s swift retaliation indicates that her victory has reinforced its concerns.
The prime minister has cultivated a reputation as a staunch supporter of Taiwan and a proponent of stronger deterrence against China. Her government has emphasized interoperability with U.S. forces and expanded defense budgets as part of a broader Indo-Pacific strategy.
Takaichi’s deputy chief cabinet secretary, Kei Sato, described the sanctions as “absolutely intolerable and extremely regrettable,” promising that Tokyo would assess the impact and consider necessary responses.
Yet any retaliatory move risks further escalation. Japan’s economy remains deeply intertwined with China’s, despite ongoing efforts to diversify supply chains and reduce dependency on critical materials.
The dispute reflects a broader transformation in East Asian geopolitics. Japan’s postwar security policy, long constrained by constitutional limits, has shifted markedly in recent years amid rising concerns over China’s military assertiveness in the East China Sea and around Taiwan.
For Beijing, Japan’s expanding strike capabilities and rhetoric about existential threats represent a fundamental challenge. By targeting Japan’s defense-industrial ecosystem, China appears intent on raising the economic costs of rearmament.
At the same time, the measures may accelerate Japan’s push to secure alternative supply chains and deepen cooperation with the United States and other partners in Europe and the Indo-Pacific.
The confrontation thus risks becoming self-reinforcing: Chinese sanctions strengthen Japanese threat perceptions, which in turn justify further military expansion in Tokyo’s view.
For now, neither side shows signs of retreat. Beijing has framed its actions as defensive and lawful, while Tokyo has condemned them as coercive and unjustified.
Diplomatic channels remain open, but trust is eroding. The symbolic return of the pandas and the decline in tourism highlight how even cultural ties are being swept into the geopolitical struggle.
As Japan advances its most ambitious military build-up in decades and China asserts itself more forcefully in regional affairs, the latest sanctions mark another step toward a more polarized and militarized Northeast Asia.
Whether the standoff leads to negotiated limits or deeper economic decoupling will depend on decisions made in Beijing and Tokyo in the months ahead. For now, the message from China is clear: Japan’s new security path will carry tangible economic consequences — and the strategic contest between the two Asian powers is entering a more confrontational phase.
