China targets Japanese companies over military ties

Beijing: China imposed export restrictions on 40 Japanese companies and entities on Tuesday, citing national security concerns, as Beijing escalated a months-long row that has seen Chinese tourism to Japan plummet.

The countries have been locked in a spat over comments by Japanese Prime Minister Sanae Takaichi in November that Tokyo could intervene militarily in any attack on self-ruled Taiwan.

In the latest move, China’s commerce ministry restricted exports to 20 Japanese entities, including five subsidiaries of Mitsubishi Heavy Industries as well as Japan’s space agency.

They are accused of helping to enhance Tokyo’s military capabilities.

From Tuesday, Chinese exporters will not be able to supply dual-use items to the listed Japanese entities, and overseas firms are banned from providing them with dual-use items originating in China.

The ministry added a further 20 Japanese entities, including automaker Subaru, to a “watch list” requiring stricter reviews of exported items that could be used for military purposes.

“The above measures are aimed at curbing Japan’s ‘remilitarisation’ and nuclear ambitions and are completely legitimate, reasonable and lawful,” a commerce ministry statement said.

A Japanese trade official told AFP that Tokyo would “take appropriate measures” after analysing the impact of the new curbs.

Travel to Japan, long a popular destination for Chinese tourists, has plummeted since November as Beijing warned its citizens against going there.

Japanese media also reported in November that China had suspended imports of the country’s seafood, which it had only recently resumed purchasing in 2023 after a previous ban over wastewater release from the Fukushima nuclear plant.

Tokyo returned two pandas to China last month, leaving Japan without any of the bears for the first time in 50 years.

January also saw Beijing announce a broad ban on the export to Japan of “dual-use” goods with potential military applications.

– Shares tumble –

But the latest move singles out dozens of Japanese heavyweights, with shares of several firms falling after the announcement.

Kawasaki Heavy shares sank almost five percent in Tokyo, while Mitsubishi Heavy Industries shed close to four percent and IHI tumbled nearly seven percent.

The export ban hits several shipbuilding and aerospace firms, including major shipbuilder Japan Marine United and a subsidiary of Kawasaki Heavy Industries.

“China’s lawful listing actions target only a small number of Japanese entities, relevant measures target dual-use items and do not impact normal economic (exchanges) and trade between China and Japan,” the commerce ministry said.

“Honest and law-abiding Japanese entities have nothing to worry about,” it added.

Companies on the “watch list” — which also includes Mitsubishi Materials — can apply to be removed if they cooperate with Beijing’s verification terms.

Several of the firms listed are active in the defence industry, manufacturing kit including ships, fighter jets and missiles for the Japanese military.

Japan has been shedding its strict pacifist stance, moving to obtain “counterstrike” capabilities and to ease rules on exporting lethal defence equipment.

Takaichi’s government in December approved a record defence budget worth nine trillion yen ($58 billion) for the coming fiscal year to expand its military capabilities.

“China is intensifying its attempts to unilaterally change the status quo by force or coercion in the East China Sea and the South China Sea, while also expanding and stepping up its military activities in the areas surrounding our country,” Takaichi told parliament on Friday.

In recent months, China has also begun restricting exports to Japanese companies of scarce and expensive “heavy” rare earths, as well as the powerful magnets containing them, the Wall Street Journal reported, citing two exporters in China.