Jun 30, 2026

On Monday, China took further action. The Ministry of Commerce placed 20 Japanese entities - including the National Institute for Defense Studies - on the export control list and another 20 - such as MITSUI E&S Co, Ltd. - on a watch list. Following the initial lists released on February 24, this second batch of designations aims to resolutely curb Japan's reckless moves of "neo-militarism." Through this move, China intends to ensure that the Japanese side pays a tangible price for any adventurist schemes fueling this "neo-militarism," making every provocative act acutely painful and ultimately counterproductive. China remains steadfast in its commitment to safeguarding its own security as well as regional peace and stability, and possesses the full capability to do so.

Unlike the initial round of controls targeting the manufacturing sector, this latest move focuses on military research institutes and core supporting enterprises - effectively targeting the "brain" of Japan's entire defense-industrial complex - to curb the upgrading of offensive weaponry at the very source: design, R&D, and technological iteration. If the release of the first list served as an initial warning, the latest step signals that China can - depending on Japan's subsequent actions - add more military-linked entities to the list at any time, thereby establishing a long-term, sustainable control mechanism. Japan should fully anticipate this.

According to Japanese media reports, exports of key materials for high-performance magnets such as dysprosium and terbium to Japan have become zero, and the supply of tungsten-related products has also been disrupted. Japanese institutions have estimated that if rare earth imports from China were cut off for a year, compounded by restrictions on components, Japan's real GDP could contract by approximately 1.3 percent, or around 7 trillion yen ($43 billion). These figures demonstrate the deep reliance of Japan's defense and high-end manufacturing sectors on Chinese supply chains. Having chosen to turn this dependency into a "security threat from China," Japan cannot expect China to continue providing supplies unconditionally. China cannot and will not allow its resources and market to fuel a military machine that undermines its own sovereign security.

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https://www.globaltimes.cn/page/202606/1364750.shtml