In the wake of China's January 7 ban on dual-use exports to Japan's military—prompted by politician Sanae Takaichi's Taiwan remarks and already protested by Tokyo as 'extremely regrettable'—analysts warn of vulnerabilities in the semiconductor sector, where Japan holds key leverage amid escalating tensions.
China's Ministry of Commerce announced on January 7, 2026, a prohibition on exporting all dual-use items to Japan's military or end uses enhancing its capabilities. This responds to recent comments by Japanese politician Sanae Takaichi hinting at potential military intervention in the Taiwan Strait, which Beijing labeled as interference in internal affairs and a violation of the one-China principle.
As previously reported, Japan's Foreign Ministry lodged a strong protest the same day, calling the Japan-specific measure 'absolutely unacceptable' and demanding its withdrawal.
The ministry emphasized the ban safeguards China's national security, complies with domestic laws, and meets international non-proliferation obligations. Any transfers of such Chinese-origin items to Japan will incur legal accountability.
New analysis underscores potential escalations. Japan dominates critical chemicals for semiconductors, especially photoresist—a light-sensitive material for chip engraving—with four firms (JSR, Tokyo Ohka Kogyo, Shin-Etsu Chemical, Fujifilm Electronic Materials) controlling 72.5% of the global market in 2021 (ResearchInChina). China's domestic substitution lags below 5% (TrendForce).
"Japan can stop exporting important goods such as semiconductor manufacturing equipment," noted Minoru Nogimori, senior economist for Asia at the Japan Research Institute. "Semiconductor manufacturing equipment and chemicals should be important cards."
While China leads in rare earths (supplying ~60% of Japan's imports), trade remains stable for now. However, prolonged disputes could prompt Tokyo's export curbs, threatening China's access to vital goods and straining the global semiconductor chain. This incident highlights deepening Sino-Japanese frictions, including Japan's record military budget and concerns over its remilitarization.
