After Beijing's new export controls, Japanese companies should diversify their trade and investment destinations to avoid being hit when relations deteriorate.
China rare earths KIBBVFOGDZNG5EOGG6S5UGA4BM

A Chinese-language version of the Periodic Table of Elements, including rare earth elements. (©Kyodo)

The Xi Jinping regime in China has raised its economic coercion on Japan. Beijing just added 20 Japanese companies, including a subsidiary of Mitsubishi Heavy Industries, to its new export control list.

Introduced on January 6, the rule bans the export of products China defines as "dual (civilian or military) use." It covers a vague but wide range of items, including rare earths, which are important minerals with numerous industrial applications.

Separately, China has added another 20 companies, including Subaru and TDK, to an export control watch list. Stricter export screening measures will apply to businesses on this list.

In January, the Chinese government announced that it was tightening export controls on potentially dual-use goods intended for Japan. Now they have taken their attempts at intimidation even further by naming specific companies as targets.

This is unacceptable behavior.

Beijing's Desperate Pressure Campaign

A spokesperson for China's Ministry of Commerce explained the measures in a January 6 statement. He said they are aimed at "deterring Japan's attempts to rearm and acquire nuclear weapons." 

However, since October 2025, the Xi administration has been criticizing Prime Minister Sanae Takaishi for her reasonable remarks regarding a Taiwan emergency. He and officials in the Chinese Communist Party argue Japan is signaling a "revival of militarism."

Chinese Foreign Minister Wang Yi accused Japan of militarism, at the Munich Security Conference on February 13. (Reuters)

Beijing's attempts to intimidate Japan by peddling such obvious falsehoods are likely intended to shake up Prime Minister Takaichi. She has long maintained a hardline stance toward Communist China. 

Beijing may also be aiming to increase dissatisfaction among Japanese companies toward the Takaichi administration by using intensified pressure. Quite naturally, the Japanese government also lodged an official protest to China and demanded that the new restrictions be withdrawn.

China's Targets

The new export ban specifically targets defense-related companies, such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries, IHI, and the Japan Aerospace Exploration Agency. It also lists the Japan National Defense Agency. Companies and other entities, including those on the watch list, should first assess their vulnerability and then take necessary measures to protect their interersts.

According to the Chinese Ministry of Commerce statement, as translated by AP, "The export restrictions will not affect normal economic and trade exchanges between China and Japan, and honest and law-abiding Japanese entities have absolutely nothing to worry about."

Ore containing rare earth minerals (©Kyodo)

However, how many businesses are prepared to take this Chinese government assurance at face value? 

Countering Anti-Japan Propaganda

By now, the towering magnitude of the risks common to all Japanese companies doing business in China has become clear. It is high time for companies to speed up the reduction of their excessive dependence on China. For example, they should diversify their trade and investment destinations. Only in this way can they avoid being hit hard every time Japan-China relations deteriorate. 

China has also undertaken a propaganda campaign in the international community seeking to unfairly denigrate Japan. 

Japan must not simply refute every false accusation that Beijing makes. It must also proactively communicate to the world how abnormal and dangerous China's persistent actions have become. Furthermore, it should work to ensure that the international community shares a collective understanding of the dangers posed by China.

Prime Minister Takaichi has a significant role to play in this regard. Her March summit with US President Donald Trump will provide an important opportunity to align their perceptions about China.

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Author: Editorial Board, The Sankei Shimbun

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