China’s amended National Defense Mobilization Law took effect on 1 October 2026, raising concerns that it could affect the operation of Japanese companies’ businesses in China. While situations involving the requisition of assets and requests for cooperation may arise under the legal framework, it is understood that not all companies will be affected immediately, and the risks and countermeasures have been outlined.
The amended National Defense Mobilization Law is intended to establish a new framework for using private-sector resources for national defense, with emphasis placed on strengthening preparations for the transition from peacetime to wartime. In particular, the law institutionalizes the collection and use of data related to national defense mobilization and sets out a policy of promoting the use of advanced technologies and new fields. Attention is focused on the possibility that technologies, equipment and logistics networks held by companies could be relevant to national-defense requirements.
Five risks have been identified. First is the impact on the use of production facilities and logistics networks. Second is the difficulty of managing technology and data. Third is the impact on securing employees and maintaining business continuity. Fourth is disruption to the procurement and supply of parts and raw materials. Fifth are the compound risks arising from heightened geopolitical tensions. In particular, restrictions could be imposed on the use of factories, warehouses and transportation means in China, and the need for stricter management of important information has been highlighted.
Four countermeasures have been identified. First is to assess the degree of dependence on operations in China. Second is to manage access to technology and data. Third is to develop specific business continuity plans and conduct training. Fourth is to monitor developments in laws and regulations on an ongoing basis. These measures include considering alternative procurement and production sites, classifying data and minimizing access privileges, ensuring employee safety and establishing recovery procedures, and complying with local regulations.
Source note: This article is a summary based on reports distributed via Yahoo! News. It is not intended to solicit investment decisions or recommend any securities. Similar reporting by The Nikkei also provides corroboration.