On June 29, 2026, China expanded its export restrictions against Japan by adding 20 entities to its export control list and placing another 20 on a watch list that requires enhanced licensing scrutiny. This includes notable companies such as Mitsui E & S Co., Terra Drone Corporation, and various units of OKI Electric Industry.
The Chinese Ministry of Commerce stated that exports involving Japanese military users or any end-user that could enhance Japan's military capabilities would not be approved. This move follows earlier restrictions imposed in February, where China prohibited exports of dual-use items to 20 Japanese entities linked to Japan's military.
The Chinese government criticized Japan for its perceived militaristic approach, claiming that Japan has not shown remorse for its actions and has instead intensified its military initiatives.
This development is crucial for investors as it may impact the operations and profitability of affected Japanese companies, particularly in the defense and technology sectors, and could further strain Japan-China trade relations