China Adds 40 Japanese Companies to Export Control Lists Over Alleged Support for Military Modernization

China has added 40 Japanese companies to its export control lists, accusing them of supporting Tokyo’s military buildup as trade and military tensions between the two countries accelerate.

China’s Ministry of Commerce announced on Monday that 20 Japanese entities had been placed on its Entity List and another 20 on a watch list, citing their roles in boosting Japan’s military capabilities and “re‑militarization.” The action follows a similar round of listings in February.

“Japan has refused to reflect on its actions and instead gone further down the wrong path, accelerating its pursuit of new‑style militarism, deploying offensive weapons and launching offensive missiles from overseas,” said a spokesperson for the ministry.

Guo Jiakun, a spokesperson for the Chinese Foreign Ministry, emphasized that China hopes Japan will abandon the perceived wrong path, rectify its mistakes, undertake sincere introspection, and return to a proper course. He also highlighted that the measures target only dual‑use items and do not impede normal trade exchanges between China and Japan; Japanese entities can operate in good faith and within the law without concern.

He stressed that China’s actions are fully justified, legitimate, and lawful, aimed at containing what it views as Japan’s reckless neo‑militarism.

Earlier in February, China’s Commerce Ministry added 20 Japanese entities—including Mitsubishi Heavy Industries Shipbuilding Co Ltd, Fujitsu Defense & National Security Ltd, and NEC Aerospace Systems Ltd—to its export control list. The two rounds of sanctions in February and June have cumulatively targeted 80 Japanese companies.

“The control list is defined by entities where there is a clear, confirmed national‑security risk,” said Wan Zhe, an economist and professor at Beijing Normal University. “The 40 entities placed on China’s Entity List are directly involved in boosting Japan’s military strength, meeting the threshold for serious harm to national security under the dual‑use export control regulations.”

Wan Zhe noted that forty other companies were added to the watch list because their end users and end uses for dual‑use items could not be verified. While not yet posing a clear national‑security threat, they must still be closely monitored.

She emphasized that the core goal of the measures is to curb Japan’s military expansion capabilities at the supply‑chain level, targeting risk without affecting the vast majority of compliant Japanese companies or normal trade and industrial cooperation between China and Japan.

Beijing’s latest export control measures come as Japan presses ahead with a long‑range missile buildup that Chinese experts say is aimed at China.

In late March, Tokyo announced the deployment of its Type 25 missiles, its first long‑range strike weapons capable of hitting ground and maritime targets at extended range. The series includes a surface‑to‑ship variant based in Kyushu and a hypersonic gliding variant based at Fuji, both with a range of over 1,000 kilometers, bringing mainland China within reach. Tokyo plans to extend the hypersonic variant’s range to 2,000–3,000 kilometers in future versions.

The missile deployment coincided with the largest overhaul of Japan’s Maritime Self‑Defense Force since its founding. Its main surface fleet units were merged into a new Fleet Surface Force, a new amphibious warfare unit was established in Sasebo, and the Air Self‑Defense Force began building a dedicated space operations unit.

“Japan’s military moves are part of the government’s strategy to fundamentally strengthen its defense capabilities, using limited equipment and personnel to pursue far more aggressive military goals,” said Fan Xiaoju, a research fellow at the China Institutes of Contemporary International Relations. “These moves reveal the underlying tone of Japan’s diplomatic and security policy—a pursuit of military supremacy and stronger deterrence.”

“Combined with the rising tide of populism and xenophobia inside Japan, the country is heading in an increasingly dangerous and uncontrollable direction,” she said. “Japan should hold a correct view of history, honor its commitments, and treat its neighbors well. That is what would truly serve regional peace and stability, as well as Japan’s own security.”

Japan’s photoresists

China’s newly imposed export controls on Japanese firms also came after Prime Minister Sanae Takaichi told G7 leaders at a summit in France on June 16 that China’s export controls against Japan risked disrupting partners’ supply chains. She called on G7 members and multilateral development banks to build more resilient mineral supply chains.

An article published by NetEase on June 22 said that four major Japanese photoresist makers—Tokyo Ohka Kogyo, JSR, Shin‑Etsu Chemical, and Fujifilm—stopped accepting new orders for advanced argon fluoride (ArF) and extreme ultraviolet (EUV) photoresists and trimmed orders for lower‑end krypton fluoride (KrF) grades.

EUV photoresists are used for the most advanced chip nodes below 7 nanometers, while ArF photoresists cover nodes from 65 nm down to 7 nm. KrF photoresists are suited only to larger nodes of 65 nm and above.

The article said China’s photoresist imports from Japan fell by about 95 % to just 111.3 tons in the first quarter of 2026, down from 2,200 tons a year ago. High‑end photoresist imports recorded zero in the second quarter.

As of now, neither the Japanese government nor the four companies have confirmed a coordinated halt.

Chinese commentators have mixed views on the matter. Some dismissed the photoresist ban report as fake news due to a lack of verifiable evidence, while others see an opportunity for domestic photoresist suppliers—such as Jiangsu Nata Opto‑Electronic Material Co Ltd and Red Avenue New Materials Group Co Ltd—to grow, as their manufacturing yields have matched those of their Japanese peers. Yet others note the stark reality if the news is true.

“Japan’s photoresist ban has opened a rare window for domestic suppliers, but a window of opportunity is not the same as a shortcut,” writes a Liaoning‑based columnist using the pen name Digital Observatory. “One domestic supplier saw its KrF photoresist’s yield rate plunge during testing because of a mismatch with the lithography’s temperature. Long‑term stability, resistance to etching and ion implantation, and storage life all still need to be tested over time.”

The columnist added that domestic photoresist suppliers’ limited production capacity is another major problem, and large‑scale domestic substitution in advanced chipmaking will only occur in three to five years.

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