The Shanghai Composite Index experienced a slight decline of 0.2%, settling below 4,080, while the Shenzhen Component Index saw a modest rise of 0.3%, reaching 14,070 on Wednesday. Mainland Chinese stocks appeared indecisive as escalating geopolitical tensions between China and Japan, the two largest economies in Asia, cast a shadow over investor confidence. This uncertainty was amplified following China's announcement to impose export controls on military-use products to Japan, in reaction to remarks made by Prime Minister Sanae Takaichi regarding Taiwan last year. The export restrictions span a variety of items including electronics, sensors, and technologies applicable in the shipping and aerospace sectors. The defense sector felt the brunt of this decision, with shares in China Spacesat dropping by 5.6%, Beijing Leike Defense Technology by 1.3%, and China Aerospace by 0.8%. In contrast, shares linked to technology and artificial intelligence sectors demonstrated strong performance, as evidenced by the gains of Zhongji Innolight (+2.8%), BlueFocus Intelligent (+7%), and Giga Device Semiconductor (+5.7%).