China has formally implemented stringent export controls on dual-use goods to Japan, a move that Foreign Ministry spokeswoman Mao Ning characterized as “completely legitimate and reasonable” in response to what Beijing perceives as provocative statements from Japanese Prime Minister Sanae Takaichi regarding Taiwan.
The diplomatic friction emerged following Prime Minister Takaichi’s November parliamentary comments suggesting that a “Taiwan contingency” could constitute a “survival-threatening situation” for Japan, language interpreted by Chinese officials as implying potential military intervention in the Taiwan Strait. Mao Ning asserted that these remarks represented both an infringement on China’s sovereignty and a blatant interference in internal affairs.
China’s Ministry of Commerce announced the strengthened export controls effective immediately, explicitly prohibiting “the export of all dual-use items to Japanese military users, for Japan’s military use, and for any other end-users and end-use purposes that help enhance Japan’s military capabilities.” Dual-use items encompass products and technologies with both civilian and military applications.
Economic analysts warn of significant repercussions for Japanese industry. Takahide Kiuchi, executive economist at Nomura Research Institute, identified potential restricted categories including semiconductors, electronic components, precision machinery, EV-related lithium compounds, rare earths, telecommunications equipment, and personal computers. Japanese trade data indicates these categories collectively represent approximately 42% of Japan’s total imports from China, valued at roughly 10.7 trillion yen ($49.2 billion) in 2024.
Hidetoshi Tashiro, chief economist at Japan’s Infinity LLC, highlighted particular concern regarding rare earth elements, noting that automotive and electronics industries could face production disruptions if these materials are included in restrictions. Nomura Research Institute projections suggest three months of rare earth export restrictions could cost Japan approximately 660 billion yen, reducing GDP by an annualized 0.11%.
The uncertainty surrounding specific controlled items has already created trade hesitancy, with Japanese firms reportedly reluctant to place or accept orders without clear definitional parameters. Tokyo’s stock market responded negatively, with the benchmark Nikkei index closing down 1.06% following the announcement.