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 continue to escalate.
China’s Ministry of Commerce said on Monday that 20 Japanese entities were located there List of entities and 20 more in one watch list. The ministry cited their roles in advancing Japan’s military capabilities and “remilitarization.” The move follows a similar round of listings in February.
“Japan has refused to reflect on its actions and instead has gone further down the wrong path, accelerating its pursuit of new-style militarism, deploying offensive weapons and launching offensive missiles from abroad.” said a spokeswoman for the commerce ministry. “The 20 entities placed on the watchlist are those involved in Japan’s military buildup, while the 20 on the watchlist failed to verify the end-users or end-use of the dual-use items they handled.”
“We hope that Japan will turn back from the wrong path, correct its mistakes, do some serious soul-searching and get back on track,” Guo Jiakun, a spokesman for the Chinese Foreign Ministry. said at a regular press conference. “The relevant measures only target dual-use items and will not affect normal business exchanges between China and Japan. Japanese entities need not worry as long as they act in good faith and in accordance with the law.”
He stressed that it is fully justified, legitimate and legal for China to take these measures, which are aimed at containing what China sees as Japan’s reckless neo-militarism.
On February 24, Sino-Japanese relations worsened when China’s Ministry of Commerce added 20 Japanese entities to its export control list, including Mitsubishi Heavy Industries Shipbuilding Co Ltd, Fujitsu Defense & National Security Ltd and NEC Aerospace Systems Ltd. The two rounds of Japanese sanctions in February and June have hit a total of firms.
“The control list is determined by entities where there is a clear and confirmed risk to national security.” said Wan Zhe, an economist and professor at Beijing Normal University. “The 40 entities placed on China’s entity list are directly involved in Japan’s military buildup, meeting the threshold for serious harm to national security and interests under dual-use export control regulations.”
“Forty more companies were added to the watch list as their end-users and end-uses for dual-use items could not be verified,” she said. “They have not yet reached the level of clearly endangering China’s national security, but they should still be closely monitored targets.”
She said the main aim of the measures is to curb Japan’s military expansion capabilities at the supply chain level and that the policy is precisely on target at risk, with the vast majority of Japanese companies compliant and normal trade and industrial cooperation between China and Japan remaining intact. She said the combined measures are both defensive, closing loopholes in the system, and reactive, a proportionate countermeasure that draws a clear line on national security while demonstrating strategic judgment.
Beijing’s latest export control measures come as Japan moves ahead with building long-range missiles that Chinese experts say are aimed at China.
At the end of March, Tokyo DESIGNATED deployment of Type 25 missiles, the first long-range strike weapons, capable of hitting land and sea targets at wide range. The series includes a Kyushu-based surface-ship variant and a Fuji-based hypersonic glide variant, both with a range of over 1,000 kilometers, putting mainland China within reach. Tokyo plans to extend the range of the hypersonic variant to 2,000 to 3,000 kilometers in future versions.
Rocket deployment came alongside the largest repair of the Japan Maritime Self-Defense Force since its establishment. Its main surface fleet units were merged into a new Surface Fleet Force, a new amphibious combat unit was established at 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 radically strengthen its defense capabilities, using limited equipment and personnel to pursue much more aggressive military goals,” said Fan Xiaoju, a researcher at the China Institute of Contemporary International Relations. “These moves reveal the underlying tone of Japan’s diplomatic and security policy, a pursuit of military superiority and stronger deterrence.”
“Combined with the rising tide of populism and xenophobia within Japan, the country is heading in an increasingly dangerous and uncontrollable direction,” she said. “Japan must have a correct view of history, honor its commitments and treat its neighbors well. This is what would truly serve regional peace and stability, as well as Japan’s own security.”
Japanese photoresists
China’s newly imposed export controls on Japanese firms also came after Prime Minister Sanae Takaichi said G7 leaders at a summit in France on June 16 said China’s export controls against Japan risked disrupting partner countries’ 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 manufacturers, Tokyo Ohka Kogyo, JSR, Shin-Etsu Chemical and Fujifilm, had stopped accepting new orders for advanced argon fluoride (ArF) and extreme ultraviolet (EUV) photoresists and cut orders for lower grades of krypton fluoride (KrF).
EUV photoresists are used for the most advanced sub-7nm chip junctions, while ArF photoresists cover junctions from 65nm to 7nm. KrF photoresistors are only suitable for larger junctions of 65 nm and above.
The article said China’s photoresist imports from Japan fell by about 95% to just 111.3 tonnes in the first quarter of 2026, from 2,200 tonnes a year earlier. Imports of high-end photoresists were zero in the second quarter.
So far, neither the Japanese government nor the four companies have confirmed a coordinated shutdown.
Chinese commentators have different views on the matter. some discharged Report banning photoresists as fake news, saying it lacked any verifiable evidence. The others said this could be a good 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 production yields have been compared to those of their Japanese counterparts. However, some said the reality is grim 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 columnist based in Liaoning using the pen name Digital Observatory. “A domestic supplier saw its KrF photoresist yield rate drop during testing due to a lithography temperature mismatch. Long-term stability, resistance to etching and ion implantation, and shelf life all still need to be tested over time.”
The columnist adds that the limited production capacity of domestic photoresist suppliers is another big problem, and large-scale domestic replacement in advanced chip manufacturing will only happen in three to five years.
Read: Japan seeks G7 price levels to break China’s grip on rare earths
Follow Jeff Pao at X at @jeffpao3
