China’s recent decision to target Japanese companies with export controls on critical minerals and “dual‑use” technologies isn’t just an escalation in Beijing’s dispute with Tokyo. This is a moment of truth for democracies that still hope to compartmentalize economic engagement with China from geopolitical security realities.

Last month, Beijing placed 20 Japanese companies on a list to restrict the sale of critical materials and dual-use technologies, citing Japan's increasing "remilitarization" as a reason for the restriction. An additional 20 Japanese companies were placed on a "watch list," subject to strict license requirements prior to shipping those same critical materials and technologies. These restrictions affect key materials used for advanced manufacturing, technology and defense sectors, including the critical rare-earth elements needed for products ranging from electric motors to high-end electronic devices.

This should be a wake-up call. For decades, Western policymakers have operated based upon the concept of "pragmatic engagement," i.e., that they can sustain economic relationships with China even though there is an increase in competitive activities in the geopolitical arena. There is evidence that this concept is once again gaining traction as evidenced by the successive visits to Beijing made by senior officials of several of America's closest allies in recent months — namely Canada and the United Kingdom — indicating a preference for accommodation rather than confrontation.

© The Japan Times