China Blocks Exports to 20 Japanese Companies and Puts 20 on Concerns List
In the latest sign of rising tensions between China and Japan, China’s Ministry of Commerce announced export bans on 20 leading Japanese companies and placed an additional 20 companies on a “List of Concerns.” Japanese officials quickly responded, demanding a lifting of the restrictions, which it called “intolerable,” as it lodged a “strong protest” with Beijing.
Tensions have been rising as China continues to expand its territorial claims, with spats between the two sides over uninhabited islands used as fishing grounds. China has also objected to the reports that Japan was committed to raising military spending to two percent of gross domestic product in 2026. Many in the Japanese government have said the country must modernize its military in response to Chinese efforts. Last November, Japanese Prime Minister Sanae Takaichi also told parliament that Japan might have to respond if China attacks Taiwan.
In taking today’s steps, Chinese officials cited Japan’s efforts to enhance its military strength. The Chinese Foreign Ministry referenced “national security” and its “international obligation of non-proliferation.” The Commerce Ministry took it further by saying Japan was trying to “remilitarize” and referencing “nuclear ambitions.”
Japan has commercial nuclear power, but its post-World War II Constitution contains provisions long interpreted to block military use of nuclear weapons. It also restricts nuclear ships. Japan’s Defense Ministry, however, in 2025, made remarks about “next-generation power sources” for its submarines and other combatants.
Under the restrictions launched today, Chinese companies or companies dealing with Chinese technology are immediately banned from exporting any items that can be deemed to have “dual-use,” i.e., repurposing from commercial to military purposes. The list is 20 of Japan’s leading industrial companies, including Mitsubishi Heavy Industries Shipbuilding, along with several other divisions, as well as divisions of Kawasaki and IHI involved in aerospace, Japan Marine United Corporation, and others.
The second listing is companies that China said it has concerns that they could repurpose dual-use items, and that the companies could not be verified. Exports or international companies doing business with these 20 companies now have to submit a risk assessment and provide a “written commitment that the dual-use items will not be used for any purpose that would enhance Japan’s military strength.” This includes dealings with Subaru, FUJI Aerospace Technology, ITOCHU Aviation, Sumitomo Heavy Industries, Nissin Electric, and others.
Experts highlight that China would likely include exports of rare earths and metals that could be used in electric vehicles as well as missiles. They note that China briefly restricted similar exports to Japan 16 years ago.
After filing its official protest, Japanese officials said the country would consider its “necessary responses.”
China and Hutchison Condemn “Illegal Takeover” of Port Terminals
The Hong Kong Government and CK Hutchison condemned the actions of the Government of Panama, saying they would seek legal recourse after Panama took possession of the terminals in Balboa and Cristobal and signed new operating contracts with Maersk and Mediterranean Shipping Company (MSC). Hutchison confirmed that its subsidiary, the Panama Ports Company, has ceased operations.
Hutchison asserts that the representatives of Panama “made direct physical entry into the terminals,” saying they “arrived without invitation.” It further asserts that representatives of the Panama Ports Company were locked out of the terminals. Media reports in Panama said employees were told they could not speak with the Panama Ports Company, or they could be arrested. The government said it would guarantee full employment for the existing workers.
The actions came shortly after the Supreme Court of Panama published its final decision ruling the laws that established the concession and the 2021 extension were unconstitutional. The Government of Panama also signed rules freezing all the movable equipment and giving it and its representative the right to use the equipment to maintain the operations.
Container operations at both the port of Balboa and Cristobal were suspended pending the transition. The Panama Maritime Authority is overseeing the operations and said the suspension was temporary while new systems were implemented. It notes that bulk operations were continuing.
The Comptroller General of Panama moved quickly to sign new contracts with Maersk’s AMP Terminals to operate the Port of Balboa on the Panama side of the Panama Canal. A separate contract was signed with MSC’s Terminal Investments Limited (TIL) for the operations at Cristobal on the Atlantic side of the canal. The Comptroller said the actions were fundamental to strengthening the national port system, the country’s competitiveness as a regional logistics hub, and the generation of employment and investment.
The decision to separate the operations into two companies lays the groundwork for continued competition with the plan to award two separate long-term concessions. Panama previously stated that the operations would be separated with two operators in the future. They noted the two agreements also provide for two different operating models and that Panama would be following the operations as it works to define the long-term tender for the operations.
Each company has an 18-month contract, and it includes fixed payments for the management, operation, and maintenance of the terminals. AMP will be paying approximately $25.6 million, while TIL will pay approximately $16 million. The new contracts exclude the land, for which the government expects an additional $20 million annually in concession fees. Panama projects it will receive $100 million for the temporary operation of the terminals.
The Hong Kong Government issued a statement saying its executive “condemns this blatant act,” lodging a “strong protest” against the forced takeover of the two ports. It asserted that Panama’s actions “ignored the facts and violated contractual good faith.” It says the government's forced takeover “severely damaged the Hong Kong company’s legitimate rights and interests and undermined the spirit of the contracts.”
Hutchison is calling it the “culmination of a campaign by the Pamana State,” and that the actions were unlawful. The company said it would continue to consult its legal advisors regarding the ruling and forceful takeover, as well as the “purported termination.” It said it is reviewing all available recourse, including additional national and international legal proceedings against Panama and “third parties colluding” with Panama.
AMP issued an update on Tuesday, the day after the takeover, saying it had initiated a “stabilization phase” at the Balboa terminal. With the Panama Maritime Authority, it said they would be inventorying the containers in the terminal as well as the equipment, including cranes and technology systems. It said there would be a technical evaluation and a review of the cargo condition, with special attention to perishable goods.
The company said a new terminal operating system was being deployed. AMP reports operations will be “progressively reactivated” with the least possible disruption.
Panama Occupies Hutchison’s Terminals After Court Publishes Decision
The Supreme Court of Panama published its decision annuling the concession for the port terminals in Balboa and Cristobal to CK Hutchison, and immediately afterward, the Government of Panama moved to “occupy” both operations and take control of all of the equipment required to run the operations. The Government said in its statement that it will guarantee the operations of the ports until a new tender can be completed.
The publication of the decision in the court’s Official Gazette finalized its ruling that the law establishing the concession to the Panama Ports Company in January 1997 was unconstitutional. The court combined two suits into a single case and also declared the June 2021 25-year extension to be unconstitutional. It annulled the concession in a decision related to the management of national resources.
The government’s decree said the Panama Maritime Authority (AMP) would temporarily occupy the operations due to “urgent social interests.” The decree said AMP would determine the equipment required to maintain the operations, including cranes, vehicles, computers, programs, software, and other property, and take control of the property. It notes that it was not a definitive loss of ownership of the movable property. The government said it would also provide stability for the workers at the two ports.
Hutchison’s Panama Ports Company had predicted that the operations would be halted. It said Panama owned the land, but that all the equipment was its property. It had previously said that the government did not have a plan for the transition.
The government reported that a presidential advisor had met with the Panama Ports Company and notified them of the takeover of the facilities. It said the process would include the steps toward establishing two new concessions, which would take up to 18 months, and that there would e a different operator for each port.
Previously, it had been reported that Maersk’s AMP Terminals would operate the two port terminals located at each terminus of the Panama Canal, and the company confirmed its willingness to assist the government. Media reports today indicate that AMP will operate one terminal in the interim and that MSC’s Terminal Investments Ltd. (TiL) will operate the other terminal.
Hutchison had previously threatened to sue AMP if it attempted to take over the operations. Separately, it also said it would start arbitration with the International Chamber of Commerce. It did not publicly specify the amount of damages, but media reports in Panama are saying the company is seeking $2 billion. Late last week, a spokesperson for the Panama Ports Company said it had proposed negotiations with the Panama government.
Maintaining the operations at Balboa and Cristobal is critical to Panama. The two terminals handle nearly 4 million TEU annually, representing more than a third of the containers moved in Panama. The terminals also provide important services to vessels transiting the Panama Canal.
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