[SMM Analysis] Dual-Use Items Control on Japan Takes Effect, Japanese Battery Enterprises May Face Raw Material Supply Challenges

SMM Analysis:

On January 6, 2026, the Ministry of Commerce officially issued the "Announcement on Strengthening Export Controls on Dual-Use Items to Japan," explicitly prohibiting the export of all dual-use items to Japanese military users, for military purposes, and for any other end-uses that could enhance Japan's military capabilities. This includes items related to key minerals such as graphite. As a major global producer and supplier of graphite anode materials, the implementation of China's control policy has quickly caused shocks in the lithium battery industry chains of both China and Japan. It will not only directly impact the supply of graphite anode materials for Japanese battery enterprises but also accelerate the overseas expansion and product structure upgrading of the domestic graphite anode industry. Previously, on December 31, 2025, the Ministry of Commerce and the General Administration of Customs announced the 2026 "Catalog of Dual-Use Items and Technologies Subject to Import and Export License Management," simultaneously repealing Announcement No. 67 of 2024 from the Ministry of Commerce and the General Administration of Customs (the "Catalog of Dual-Use Items and Technologies Subject to Import and Export License Management"). The new "Catalog of Dual-Use Items and Technologies Subject to Import and Export License Management" took effect on January 1, 2026.
Impact of Strengthened Export Control Policies on Dual-Use Items to Japan on the Anode Material Industry:

China holds an absolutely dominant position in the global graphite anode material sector, not only supporting domestic lithium battery industry demand but also serving as a core supply source for battery enterprises in Japan and South Korea. Although these controls focus on military end-uses, export procedures for the civilian sector will also become stricter, leading to increased compliance costs for domestic graphite anode enterprises exporting to Japan. In the short term, issues such as delays in supply verification and extended order delivery cycles may occur. For core battery enterprises in Japan, such as Panasonic and Toyota, whose battery production lines heavily rely on Chinese artificial graphite anode materials, if alternative supply sources cannot be found quickly, they may face risks of decreased capacity utilization rates.

Full Text of the Ministry of Commerce and General Administration of Customs Announcement on the 2026 "Catalog of Dual-Use Items and Technologies Subject to Import and Export License Management":

In accordance with the "Export Control Law of the People's Republic of China," the "Regulations of the People's Republic of China on the Control of the Export of Dual-Use Items," Order No. 29 of 2005 from the Ministry of Commerce and the General Administration of Customs (the "Measures for the Administration of Licenses for the Import and Export of Dual-Use Items and Technologies"), the "Control List of the People's Republic of China for the Export of Dual-Use Items," and the 2026 "Import and Export Tariff Schedule of the People's Republic of China," the Ministry of Commerce and the General Administration of Customs have adjusted the "Catalog of Dual-Use Items and Technologies Subject to Import and Export License Management." The adjusted catalog is hereby announced.

For the import of radioactive isotopes, import operators shall, according to the "Regulations on the Safety and Protection of Radioisotopes and Radiation Devices" and the relevant provisions of the "Measures for the Administration of Licenses for the Import and Export of Dual-Use Items and Technologies," apply to the Ministry of Ecology and Environment for approval. After approval, they shall obtain the import license for dual-use items and technologies from the Quota and License Affairs Bureau of the Ministry of Commerce and complete import procedures with customs using the license.

This announcement shall take effect on January 1, 2026. Announcement No. 67 of 2024 issued by the Ministry of Commerce and the General Administration of Customs (the "Catalog of Dual-Use Items and Technologies Subject to Import and Export License Administration") is simultaneously repealed.

Ministry of Commerce     

General Administration of Customs    

Dec 31, 2025

Ministry of Commerce Announcement No. 1 of 2026 Full Text:

Pursuant to the provisions of laws and regulations including the Export Control Law of the People's Republic of China, and in order to safeguard national security and interests and fulfill international non-proliferation obligations, it has been decided to strengthen export controls on dual-use items to Japan. The relevant matters are hereby announced as follows:

The export of all dual-use items to military users in Japan, for military end-uses, and for any other end-uses that may contribute to the enhancement of Japan's military strength is prohibited.

Any organizations or individuals from any country or region that violate the above provisions by transferring or supplying relevant dual-use items originating from the People's Republic of China to organizations or individuals in Japan will be held legally liable in accordance with the law.

This announcement shall take effect from the date of its issuance.

Ministry of Commerce     

Jan 6, 2026