# China blacklists 40 Japanese defence entities in second wave of dual-use export crackdown
> Beijing's MOFCOM Notice 2026 No. 28 adds Japan's National Institute for Defense Studies, Mitsubishi Precision, and 18 others to an outright export ban, while 20 more, including Terra Drone and Mitsui E&S, go to a mandatory risk-assessment watchlist, in direct retaliation for PM Takaichi's Taiwan military comments

**Meta:** type: event · date: 2026-06-29 · heads: The Long Game, What Broke, Whose Money · 5 takes · 3 lenses · 4 regions

## Summary

China's Ministry of Commerce issued two simultaneous notices on Monday, adding 40 Japanese organisations to its dual-use export control regime in the second wave of escalating trade retaliation against Tokyo. Twenty entities, including the state-affiliated National Institute for Defense Studies, the Naval Systems Research Center, Ground Systems Research Center, Mitsubishi Precision, MHI Logitech, Kawajyu Gifu Manufacturing, and subsidiaries of Komatsu and Fujitsu, are now barred outright from receiving Chinese-origin dual-use goods. A further 20, including Mitsui E&S, drone maker Terra Drone Corporation, nuclear fuel processors, and multiple OKI Electric units, go on a watchlist requiring pre-shipment risk assessments and written assurances. Combined with the first wave of February 24, the cumulative total of restricted Japanese entities stands at 80. Beijing says the move targets organisations "that have participated in enhancing Japan's military capabilities" and is consistent with non-proliferation obligations.

## Why it matters

The immediate trigger was PM Sanae Takaichi's November 2025 suggestion that Japan might react militarily to a Chinese attack on [Taiwan](/en/entity/place/taiwan-strait), which fractured the bilateral relationship. The blacklist now sweeps in not just government defence institutes but private aerospace and drone companies, creating compliance uncertainty for the wider [dual-use supply chain](/en/entity/chip-controls) between two economies that do $300 billion in annual trade. Japanese firms face a dilemma: stop doing business that touches Chinese-origin components, or restructure supply chains that took decades to build, at a moment when Tokyo is also accelerating rearmament spending that Beijing explicitly cites as the justification.

## Regional takes (batched by bias / lens)

### unlabelled
- **China Ministry of Commerce (MOFCOM)** (China, zh) — MOFCOM Notice 2026 No. 28 and companion notice, both issued June 29 2026, listing the 20 blacklisted entities barred from receiving dual-use exports and the 20 watchlisted entities subject to mandatory pre-export risk assessment and written assurance. Both notices cite the Export Control Law and the Dual-Use Regulations and took effect on the date of promulgation.
  Source: https://www.mofcom.gov.cn/
- **Bloomberg** (United States, en) — 
  Source: https://www.bloomberg.com/news/articles/2026-06-29/china-blacklists-more-japan-entities-as-takaichi-feud-deepens
- **Al Jazeera** (Qatar, en) — 
  Source: https://www.aljazeera.com/economy/2026/6/29/china-slaps-export-controls-on-dozens-of-japanese-entities

### US financial press; focuses on named corporate targets and supply-chain implications for Japanese defence primes
- **CNBC** (United States, en) — First Anglophone outlet to name the full watchlist, identifying Terra Drone Corporation, Mitsui E&S, nuclear fuel processors, and OKI Electric units alongside the blacklist. Reports Japan's Ministry of Economy, Trade and Industry called the measures 'deeply regrettable' and said Tokyo would seek 'immediate consultations' through diplomatic channels.
  > "China widens Japan export curbs, targeting drone makers, nuclear firms and defense institutes."
  Source: https://www.cnbc.com/2026/06/29/china-japan-export-controls-watch-list-defense-entities.html

### centre-right Tokyo English-language daily; stresses the Takaichi government's response and the economic costs to dual-use exporters
- **The Japan Times** (Japan, en) — Reports the Japanese government response: METI called the measures regrettable and said it would urge Beijing to rescind them; the Keidanren business federation warned of collateral damage to non-listed firms that supply components to the blacklisted entities. Notes the February 24 first wave targeted 20 entities, so the cumulative total is now 80.
  > "China blacklists more Japanese entities as row deepens."
  Source: https://www.japantimes.co.jp/business/2026/06/29/economy/china-japan-defense-export-controls/

## Across the graph
- Related: [[china-rare-earth-japan-controls]]
- Entities: Chip Controls, Place:taiwan Strait

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