KUALA LUMPUR - China has imposed export restrictions on 40 Japanese companies, citing national security concerns as tensions with Japan deepen.

The dispute between the two major Asian economies began after Prime Minister Sanae Takaichi said in November that Japan could intervene militarily if self-ruled Taiwan was attacked.

The latest measures restrict exports of ‘dual-use’ goods, which can serve both civilian and military purposes, to 20 Japanese entities, including five subsidiaries of Mitsubishi Heavy Industries and Japan’s space agency.

Another 20 organisations, including automaker Subaru, were placed on a watch list requiring stricter reviews for items that could have military applications.

“The above measures are aimed at curbing Japan's 'remilitarization' and nuclear ambitions and are completely legitimate, reasonable and lawful.

“Honest and law-abiding Japanese entities have nothing to worry about,” a commerce ministry statement said.

A Japanese trade ministry official said Tokyo would study the impact of the new restrictions before deciding on its response, while The Mainichi Shimbun reported that Japan had lodged a protest.

Tensions have also affected tourism, with Chinese arrivals to Japan dropping by 61% in January after Beijing warned its citizens about travel there.

In December, J-15 fighter jets from China’s Liaoning aircraft carrier reportedly locked radar on Japanese aircraft near Okinawa in international waters, further raising concerns.

China has also reportedly suspended imports of Japanese seafood, and Japan’s last two pandas were returned to China last month.

Last month, Beijing tightened export controls on additional items with potential military use, raising concerns about possible limits on rare-earth mineral supplies.

The new restrictions target several major Japanese industrial firms in sectors such as shipbuilding and aerospace.

Shares of Kawasaki Heavy Industries fell nearly five per cent in Tokyo, while Mitsubishi Heavy Industries dropped about four per cent and IHI Corporation declined almost seven per cent.

Many of the affected companies are involved in Japan’s defence sector, producing equipment such as ships, fighter jets and missiles.

Japan has in recent years eased its pacifist policies and moved to strengthen its defence capabilities, including plans to acquire counterstrike abilities and relax rules on exporting military equipment.

Takaichi’s government approved a record nine trillion yen defence budget for the next fiscal year to expand military capabilities.

Takaichi told parliament that China was increasing efforts to change the status quo by force or coercion in the East China Sea and the South China Sea.

“Strengthening our defense capabilities is essential to protect the lives and peaceful livelihoods of our citizens as we face the most severe and complex security environment since the end of (World War II),” Takaichi said last Monday.

Noriyuki Kawamura, professor emeritus of Japan-China relations at Nagoya University of Foreign Studies, said Japanese firms were already facing delays in approvals related to China.

“With today's announcement, we can expect the process will be made even more stringent. I believe this will be a huge blow to companies involved,” Kawamura told AFP.