China Blacklists 20 Japanese Firms, Freezes Tech Exports in New Blow to Trade
China has added 20 Japanese companies to its export control list, blocking their access to sensitive goods and technology, while simultaneously issuing a new investment decree that gives Beijing the legal power to block technology transfers from private Chinese firms to foreign investors.
The Ministry of Commerce announced the blacklist, effective immediately, targeting subsidiaries of major Japanese corporations including Mitsubishi, Hitachi, and Komatsu [184830]. The affected entities are now prohibited from importing dual-use items—goods that can be used for both civilian and military purposes—without special government approval [184502]. Beijing stated the decision is meant to protect national security and comply with international non-proliferation obligations, but did not provide specific evidence linking the listed firms to any violations [184407].
The move expands on a broader pattern of export controls. China has also placed two American rare earth miners, MP Materials and USA Rare Earth, on a similar list in retaliation for the US Department of Defence blacklisting Chinese firms [180121]. Rare earth minerals are critical for high-tech products, including military equipment, and the restriction threatens to create a bottleneck for US defence contractors [180121].
Separately, China enacted Decree No. 837, a new set of investment rules that gives the government legal authority to control how private Chinese companies share technology with foreign investors [184897]. The regulation applies to any country receiving Chinese investment and strengthens state oversight over intellectual property transfers. For foreign investors, the change means any deal involving a Chinese private firm may now face government review, even if the technology appears ordinary [184897].
The affected Japanese firms are now reviewing the impact on their supply chains [184830]. Japan has not yet issued an official response [184407].