China's Ministry of Commerce has announced severe export controls targeting 20 key Japanese military enterprises, including major players like Mitsubishi and IHI Corporation, in response to Japan's increasing military capabilities. This action follows statements made by Japanese Prime Minister Sanae Takaichi last November regarding Japan's potential military involvement in Taiwan-related scenarios, prompting China to escalate its pressure on Japan through various means, including restrictions on rare earth exports.

The list includes major industrial firms linked to defense and aerospace, as well as military educational institutions such as the National Defense Medical University and Japan Aerospace Exploration Agency (JAXA). China's representative stated that these sanctions aim to counter Japan's militarization efforts and are thus “justified and legal.” As a result, companies in China will no longer be able to export dual-use goods to these Japanese firms, and any intent to transfer such goods from third-party countries is also prohibited. The export controls take immediate effect, halting all ongoing transactions as well.

Furthermore, the Chinese government has also placed an additional 20 companies, including Subaru and ENEOS, on a 'watch list' due to concerns regarding the end users and final applications of China's dual-use materials. The new regulations require exporters to provide a risk assessment report when dealing with these Japanese entities, which explicitly ties into Japan’s sentiment toward its own military expansion. This move could significantly impact Japan's defense sector, which heavily relies on dual-use items for advancing military technology and capabilities.