(Yicai) Feb. 26 -- China has put 20 Japanese entities, including subsidiaries of Mitsubishi Heavy Industries and Kawasaki Heavy Industries, on an export-control list over their role in Japan's “remilitarization” drive, thereby blocking shipments of “duel-use” items to them, and added 20 more to a watch list that entails stricter scrutiny.

Mitsubishi Heavy Industries Shipbuilding and 19 other entities deemed to contribute to Japan’s military buildup were added to the export-control list, China’s commerce ministry said on Feb. 23. Chinese exporters are prohibited from supplying dual-use items to the listed firms, and overseas organizations and individuals are likewise barred from transferring or providing Chinese-origin dual-use goods to them. Any ongoing related transactions must cease immediately.

The inclusion of Subaru, the Institute of Science Tokyo, Fuji Aerospace Technology, Mitsubishi Materials, and 16 other entities on the watch list marks its first use. Unlike the export-control list, the watch list does not impose an outright ban but subjects listed entities to heightened scrutiny and risk assessment in the trade of dual-use items.

The watch list’s first-ever use is the most notable aspect of the move, Ji Wenhua, a professor at the University of International Business and Economics’ School of Law, told Yuyuan Tantian, a media platform affiliated with China Central Television. The ministry said the 20 listed entities may apply for removal if they demonstrate full cooperation with verification requirements, a process Ji said reflects the rule-of-law principles underpinning China’s regulatory framework.

Under the regulations for controlling exports of dual-use items, which took effect in December 2024, the ministry may put importers of dual-use items on a watch list if their end-users or end-uses cannot be verified.

The export-control and watch lists target only a limited number of Japanese entities, apply solely to dual-use items, and will not affect normal trade and economic relations between China and Japan, the ministry noted. Law-abiding Japanese businesses have no reason for concern, it stressed.

The measures are grounded in Articles 29 and 49 of the dual-use export-control regulations, enabling multi-layered oversight covering both direct exports and indirect transfers, while underscoring the extraterritorial reach of China’s export-control regime, Ji said.

On Jan. 6, the ministry imposed a blanket ban on exports of dual-use items to Japanese military users, for military end-uses, or for any end-use that could enhance that country’s military capabilities.

Following that, Japanese leaders made remarks on Taiwan that China denounced as violations of the one-China principle and interference in its internal affairs, Ji pointed out. The new dual-list framework creates a more tiered and precise enforcement mechanism, further expanding the country's export control tools, he added.

Editor: Martin Kadiev