China has imposed export restrictions on 40 Japanese companies, citing national security concerns, escalating a diplomatic row that began with comments by Japanese Prime Minister Sanae Takaichi regarding Taiwan.

• Restrictions target 20 Japanese entities, including subsidiaries of Mitsubishi Heavy Industries and the Japan Aerospace Exploration Agency, with an additional 20 organizations added to a watch list.
• The measures are framed by China's commerce ministry as a response to Japan's perceived "remilitarisation" and nuclear ambitions.
• The ongoing spat has already led to a 61 percent drop in Chinese tourism to Japan in January and has impacted shares of companies like Kawasaki Heavy Industries.