Zhu Haiyan: Japan's Economic Security Strategy and Its Influence on China


2022-06-24: [Chinese Article Link]  Economy of Japan Foreign Affairs of Japan China-Japan relations (a) To build a coherent economic security strategy, based on the integration of existing policy practices, the Government of Japan is promoting a “strategic indispensability” of the relevant political legal system, enhancing domestic back-up capacity in the production chain, and building exclusive key technological and industrial alliances with “shared values” countries to promote diversification of supply chains. Japan's economic security strategy is aimed at alleviating the negative dependence on security and the economy and establishing a strong position in the new economic and trade order; strengthening the Japan-United States alliance in support of the United States competition for technology against China; and reducing the quality of China's rise in an attempt to keep it at a low level of growth and underdevelopment. Japan's relevant initiatives will pose some obstacle to China's scientific and technological progress, regional cooperation and participation in global economic governance, but it will be difficult for Japan to fully meet its strategic expectations owing to internal and external constraints. [Keywords] Economic security strategy, Japanese economy, Japanese diplomacy, China-Japan relations [Introduction by the author] Xu Haiyan, Associate Professor, Faculty of Political Law and Public Administration, Shaanxi Teachers University * Thanks to the editorial department of the International Studies and the anonymous review experts for their suggestions for changes, which are entirely the responsibility of the author. On 11 May 2022, the Law on the Promotion of Economic Security and Safety, proposed by the Government of the Japan Democratic Party, was adopted by the Senate and formally enacted into law and will be implemented in stages in 2023. This means that the economic security strategy-related initiatives of the Government of Akita, which seeks to achieve geopolitical objectives by means of economic science and technology, will be further refined, implemented and strengthened under the legal framework, and their future direction and impact deserve close attention. In the context of the growing convergence between international political and economicization and the politicization of the world economy, and the increasing pressure exerted by the United States on China in the field of economic science and technology, it is important to explore the relevance of Japan's economic security strategy as a major economic and technological power and its impact on China. I. Policy initiatives of Japan's economic security strategy As a country with relatively unfavourable resources and geographical conditions, Japan has long developed an outward-oriented model of economic development that is particularly sensitive to the external economic environment. In the 1930’s, Japan began to focus on economic security, particularly in transport corridors, in the context of United States sanctions on imports of materials such as Japanese steel. After World War II, as the Japanese economy entered a period of rapid development, the United States began to use market, financial, industrial and even political instruments to limit Japan's economic, scientific and technological capabilities and further improvements in industrial competitiveness, triggering a new round of concern for Japan's economic security. At present, the United States has initiated a strategic game against China centred on competition in science and technology, refocusing the Government of Akita on economic security and promoting a systematic economic security strategy based on established policy practices. (i) Improvement and strengthening of the economic defence system In recent years, the Government of Japan has embarked on the reform and improvement of the institutional mechanisms for economic security and security, and has enacted specific legislation to make it a political legal guarantee of an economic security strategy. In April 2020, Japan added an “economic group” to the National Economic Council system of the United States, under the National Security Administration, to serve as a “masterhouse” for the integration of economic and security initiatives, with the aim of breaking down the fragmentation of sectors, strengthening the monopolistic leadership of economic security and strategically formulating key industrial policies from a national security perspective, and integrating economic and trade-related decision-making, among others. In response, as an important promoter of Japan's economic security strategy, Ganli Ming stated that “Japan has finally emerged as a department that integrates economic and intelligence considerations and policies”. Since then, other relevant departments have gradually restructured their organizational structure: the Space Network Policy Office, which is part of the Safety and Security Policy Section, has been restructured into the New Safety and Security Issues Policy Room; the Ministry of Defence has created an Economic Security Intelligence Officer within the Investigation Section of the Defence Policy Directorate, which is responsible for collecting and analysing information on economic security; and the Ministry of Economy, Industry and Industry has directly established the Economic Security Unit. In October 2021, the Government added a “economic security phase” to further upgrade the specifications of the economic security system; in November, an Economic Security Advancement Conference was established with the Prime Minister as the Speaker of the Parliament, and a Legal Preparedness Office for Economic Security was established in the Cabinet to advance the relevant legislation. The adoption of the Economic Security Promotion Act provides legal safeguards for policies relating to economic security and avoids any radical change in policy as a result of changes in government. In addition, the Government has actively promoted the establishment of institutions for economic security by local governments and business groups in order to ensure the smooth functioning of policy interfaces and implementations between the people, the people and the State, to enable the adoption and coordination of economic security-related policies and to raise public awareness and acceptance of the sensitivity of economic security issues and to create a socio-economic security system. In January 2022, Aichi County set up the Economic Security Response Team to share information on industrial espionage with local businesses in order to prevent the disclosure of cutting-edge technical and confidential information. In April 2022, Japan's Electricity (NEC) established a director responsible for economic security and set up an “economic safety and security room.” The Japan Production Institute also plans to set up a department to carry out a more rigorous and precise “pre-trial review” of operations in areas related to economic security. The Japan Police Department, for its part, works with the government to raise awareness about business, including counter-intelligence, information disclosure, and protection. At the same time, the Japanese government plans to set up a special think tank on economic security in 2023, bringing together relevant personnel from the economy and academia, collecting and analysing information on developments in key cutting-edge technology research and development, and providing academic support for economic security decision-making. (ii) Increased economic, scientific and technological capacity to ensure the security of infrastructure equipment and services The technical and industrial policies of Japan's economic security strategy are divided into two levels: on the one hand, to continue to strengthen cutting-edge technologies, to establish an irreplaceable and absolute advantage at the stake of life and death in other countries, and to ensure “strategic indispensability” as an offensive ability to apply “coercive means” to other countries for political ends; and, on the other hand, to promote the diversification of supply chains abroad while strengthening the back-up of domestic industrial chains, to provide the foundation for the application of offensive capabilities and to reduce losses that may arise in the event of counter-insurgency. In December 2021, Japan’s Diet adopted the largest budget to date proposed by the Ashida government, and set up $774 billion in earmarked funds to support indigenous production in sophisticated semiconductor enterprises. At the same time, Congress adopted “Amendments to the Links Act in support of new sophisticated semiconductor plants”, which provide the Government with financial support for sophisticated semiconductor plants in areas such as new data centres, automation, etc. In Japan, “the law establishing State subsidies for the construction of semiconductor plants is the first to be enacted.” The new subsidiary, JASM, in Kumamoto County, was the first project to be supported by the Government of Japan. Japan has also stepped up its support for talent development to enhance long-term competitiveness, and has stated that “the expansion of bachelor's, master's and doctoral programmes, among others, will be reorganized to promote talent development in the field of science and technology. In order to form the world’s leading research universities, a university fund of 100,000 billion yen will be set up this year.” To ensure its advantages, Japan will also increase its protection of civil-military-related patents, while conducting more restrictive reviews of the qualifications, fields of study, and even the direction of employment of students studying abroad, in order to prevent the skills drain. Japan has made efforts to reduce the external dependence of important industries, expand the back-up of domestic production capacity, raise the level of localization of the industrial chain and ensure the maintenance of social stability in times of emergency. To this end, Japan has introduced a “domestic investment promotion subsidy as a supply chain policy” that supports the diversification of supply chain layouts for products that are highly concentrated in a single country or region and are vital to the healthy life of the nation, and reduces the risk of supply disruptions. Under the policy guidance of the Government, Japanese enterprises, including Murada Productions, Mitsubishi Electrics, TDK Cutters, etc., have significantly increased the Japanese conversion of core parts and components, actively adapting the supply chain to a Japanese-centred mode of operation. In addition, Japan has intensified its security review of infrastructure equipment. In order to prevent important information leaks due to cyberattacks, the Economic Security Promotion Act provides for periodic review of the security of equipment of major infrastructure enterprises in 14 areas, such as information communications, transport, energy, finance, medical care, and the identification of sources for the procurement of equipment, such as servers that store personal information and management systems of power stations, and regular disclosure of relevant information on maintenance service providers. (iii) Building key technology and industry alliances Japan has joined forces with Western countries to build exclusive, internal-cycle-based key technological and industrial alliances. The Japan-United States Alliance is an important pillar of Japan’s economic security strategy. In January 2022, the new “Economy 2+2” in Japan and the United States attempted to advance the high-level and wide-ranging discussions between Japan and the United States in the context of “the diminishing boundaries of economic policy and foreign policy” to create a multiplier effect between them and the existing framework in order to strengthen the core partnership between Japan and the United States in areas including climate change. In April, Japan and the United States began to coordinate a draft “Indian-Pacific economic framework” aimed, inter alia, at ensuring stable supply of strategic goods, with a focus on semiconductor supply chain cooperation, with plans to pre-create a Quadripartite Federation of Chips, including Korea and Taiwan, China. In May, at the first Ministerial Conference on Business-Industrial Partnerships, Japan and the United States reached a fundamental consensus on cooperation in the development of sophisticated semiconductors, including through a complementary approach. Japan is an active participant in the value-oriented, value-sensitive and critical supply chain ecosystem-building process led by the Group of Seven (G7). Japan is a member of the British initiative, the “D10 Club,” which aims to invest in science and technology companies in member countries, creating an alternative pool of suppliers of 5G equipment and other technologies, and moving away from China’s dependence on science and technology. Some high-tech companies in Japan have also joined the Next Generation Alliance (Next G Alliance) initiative, launched by the United States Telecommunications Industry Solutions Alliance (ATS). In March 2022, the Next Generation Coalition launched a 6G development road map focusing on standard-setting in areas such as the new “green generation” network and data storage, materials, equipment and hardware manufacturing, and the next generation of mobile networks, with sustainable development at its core. In addition, Japan is actively participating in the “International Climate Action Network” of the Artemis Agreement, led by Western countries, which essentially constructs and covers digital space (fundamental elements such as 5G/6G, artificial intelligence, quantum and semiconductors), outer space (satellite Internet, Moon, deep space), ecological space (focusing on climate governance, clean energy, environmental protection, etc.), the whole area of space development (infrastructure), the fine-tuning of key technologies and the ecological system of industrial alliances. (iv) Promotion of supply chain diversification Japan actively promotes the process of diversifying supply chains and strengthening supply-chain resilience, including R & D, design, manufacturing, etc. The White Paper on World Economic Trends in Japan’s Economic Environment, published by the Cabinet Office in February 2022, shows that China’s share of over 50% of Japan’s approximately 5,000 import categories (in total terms) is 1,133 (23.0%). The White Paper stressed that “if the trend towards dependence on specific countries for the origin of imports continues to intensify, the difficulty of responding to supply chain crises will increase significantly and measures will need to be taken to prepare for the strengthening of vulnerable supply chains. Japan has been accelerating the process of diversifying the supply chain since the outbreak of Covid-19 Pandemic, supported by greater adjustment through financial means. Japan implemented three supply chain adjustment support projects in July, November and December 2020, providing subsidies to relevant enterprises, diversifying the production base within the Asian industry network and directing the relocation of the production base of relevant enterprises to countries in South-East Asia in a policy-oriented manner, attempting to establish it as a focus area for overseas manufacturing delivery centres for Japanese enterprises, and taking advantage of opportunities to strengthen productive cooperation with relevant countries to enhance supply chain resilience. Viet Nam, Thailand and Malaysia, among others, have become the main host countries for the industrial chain transfer of Japanese enterprises, and Viet Nam has gradually become a core country, even from the marginal countries that absorb Japan's transfer. According to statistics published in December 2021 by the Japan Agency for Trade Renewal (JETRO) Overseas Survey of Japanese Capital Enterprises: Asia, Oceania, the proportion of enterprises in Viet Nam that plan to expand their operations in the next 1-2 years is expected to reach 55.3 per cent, which is well above the average of 40.9 per cent in China and even below 43.6 per cent in China. Other South-East Asian countries, such as Cambodia (48.9 per cent), Indonesia (45.3 per cent), Malaysia (43.2 per cent) and Singapore (41.3 per cent), have also had a higher share of interest in expanding their operations than China, indicating that future Chinese-owned enterprises may continue to be downsized. India, as an emerging economy, has also become an important target country for the Japanese government to encourage the transfer of productive capacity and the restructuring of supply chains. At the bilateral level, Japan actively develops good political relations with India, providing political guarantees for enhanced economic, scientific, and technological cooperation. In March 2022, Kishida visited India on the occasion of the 70th anniversary of the Japan-India border, proposing the formation of the “Japan-India Special Global Strategic Partnership”, in which “building strong global supply chains in the post-epidemiological era” would serve as an important material basis for the day-print relationship. In its joint statement entitled " Day-India Partnership for Peace, Stability and Prosperity in the Post-Epidemic Age ", both sides planned the overall direction of Japan-India cooperation, and Japan offered 31,258 million yen in assistance for India's construction in the areas of health, infrastructure, climate change, agriculture, etc., which, while contributing to India's economic recovery and improving the living environment of society, would also provide a more mature, refined and stable foundation for the diversification of Japan's supply chain. In addition, Japan has strengthened its supply chain cooperation with India through multilateral mechanisms such as the Japan-India Trilateral Framework and the US-Japan-India-India Quadrilateral Framework, working in partnership with civil society. Under the policy direction of the Japanese government, Japanese firms in India have indicated that they will increase their share of investment operations over the next 1-2 years to the top of the countries surveyed in Asia (70.1%), well above the average of 43.6%. II. Drivers of Japan's economic security strategy Japan's economic security strategy is ostensibly a response to the US-China strategic competition that has been provoked by the United States, with science and technology competition at its core, with the underlying goal of seeking a favourable position in the new economic and technological order. In the context of Japan's relevant policy practice, it is implicit in the logic that: Alleviating Japan's back-to-back dependence on security and the economy, seeking the status of a major power in international change, and preserving the “international order” on which Japan relies for national positioning will deter China from rising. (i) Mitigating security and economic reverse dependence In the aftermath of World War II, Japan's allied hegemonies sought the status of a major Power by economic means, but the reality of the “single-pulmonary nation” limited Japan's ability to achieve the goals of the political Powers. In 2010, when China’s economy was reversed, Japan was caught in a general national panic and strategic anxiety about its status. Former Prime Minister Abe took advantage of this panic and anxiety to push ahead with the building of defence forces and the reform of the defence system. During Abe’s long term in office, the Self-Defence Forces were equipped to become a modern military force with a strong operational capability. The Abe government can be said to have officially launched a substantial process of pursuing political and military powers, with visible progress. The Kishida government has consolidated and continues to enrich the status of the major powers with an economic security strategy. Kishida has inherited Japan’s historical genes and political preferences for the status of the major powers, with “leading the international community” as one of its diplomatic objectives. Motivated by the pursuit of the goal of the status of the major Powers, Ashida, on the one hand, insisted on strengthening its defence and reforming and perfecting its defence system, declaring that in the process of revising the National Security Strategy (established in 2013), the defence plan outline (revised in 2018) and the medium-term defence force rehabilitation plan (revised in 2018), “it would not exclude all options such as the ability to attack enemy bases”. On the other hand, Akita has changed fields and rules, using the modus operandi of creating new strategic domains to enhance Japan’s voice. The economic security strategy is to consolidate and reconfigure existing practices on the basis of succession and integration of existing policies, upgrading them to an important part of the national security strategy. One of the internal objectives of this move is to use it as a tool to create political performance, while using economic strength to achieve geopolitical goals and re-establish the status of a major power. Japan’s high-level national strategy to launch systematic economic security-related initiatives will have a chain of reactions in the international community, giving Japan pre-eminence and corresponding voice in the formation of “international rules” in the area of economic security, and increasing its sense of existence and influence. Through the construction of a security strategy in the economic sphere, Japan will establish a strategic national security ecosystem covering all areas of diplomacy, economy and defence, break down security rhetorical barriers between the various fields, construct a system of cross-border linkages for national security and address the dilemma of security and economic reverse dependence, which could serve as a model for future national security construction. An economic security strategy will ensure Japan’s dominant position in the re-engineering of supply chains within a small United States-led multilateral system. In the international community, the major powers actively pursue relative economic advantages, typically by using the wealth of resources available for that purpose for political security purposes. The sudden crisis characteristics of Covid-19 Pandemic and its global spread, as well as its long-term development, have impacted on the economic functioning of global supply chains and raised concerns about supply chain security in countries that high reliance on foreign suppliers may seriously undermine economic and social security in emergency situations, a perception that prompts countries to begin to secure supply chains. Japan's economic security strategy seeks to use the slotting period of United States supply chain policy adjustments to refine and strengthen the Japanese industrial chain, enhance its capacity to respond to sudden-onset emergencies, foster cutting-edge industries with “strategic indispensability”, enhance the resilience and resilience of the entire industrial chain, and re-establish the material base of a large country. Follow-up to the United States is also one of Japan's complementary initiatives towards the goals of the major Powers. In the context of the US scientific and technological siege of China, Japan firmly supports and follows the US in order to preserve its top position in the U.S. key technology and industrial union architecture, preserve its shared prerogatives in the global supply chain of key industries, gain greater access to U.S. technology, and partially resolve the back-to-back dilemma between security and the economy, thereby maximizing Japan's national interests. Following the establishment of a supply chain between Japanese and Chinese enterprises, the United States has imposed sanctions on Chinese enterprises, and Japanese enterprises may be listed, thereby being excluded from the supply chain by key United States-led technological and industrial alliances, so that Japan needs to support and follow United States sanctions against China. (ii) Enriching and strengthening the Japan-United States alliance to preserve the “international order” on which Japan relies to highlight its “optimity” Japan has integrated the coordination and cooperation of economic, scientific and technological policies of the United States of America into the functioning of the Japan-United States Alliance and has expanded its membership in order to adapt it to the trend of international political and economic globalization and the politicization of the world economy. The Japan-United States Alliance is the cornerstone of Japan's diplomacy and security, and the economic security strategy, as an important component of the national security strategy, must also have as its basic objective the preservation and strengthening of the Japan-United States Alliance. Kishida vowed “to raise to a higher level the Japan-United States alliance, which is the foundation of the Indo-Pacific region and of world peace and prosperity”. In January 2022, both the Japan-United States “2+2” talks and the summit video meeting “reaffirmed their commitment to a rules-based international order and fundamental values and principles” and “committed themselves to joint investments to accelerate innovation and ensure that the Alliance maintains its technological advantages in key and emerging areas, including artificial intelligence, machine learning, targeted energy and quantum computing”. By deepening cooperation in new and emerging areas, Japan and the United States could join forces to strengthen their strengths in cutting-edge technology, give new impetus to alliance relations, increase the convergence of bilateral relations and accelerate the process of modernization of the alliance. The preservation and consolidation of the United States-led “international order.” Since the global eruption, Covid-19 Pandemic has seen an accelerated shift in international power. Japan believes that “the world is now confronted with the serious problem of the destabilization of a rules-based, free international order” and that “the powerful States have intensified their challenge to the United States-led international order, which has long been the basis for the peace and prosperity of the international community”. “The rule-based international order is a matter of life and death for the survival and prosperity of Japan”, and Japan should work to ensure “the dominance of free democratic forces centred on Japan and the United States in the future international order”. In Cabinet resolutions and in the Speech from the Throne, Akita placed “the determination to uphold the universal values of freedom, democracy, human rights and the rule of law” at the top of the “three resolves” of diplomacy and security. Following that line of words, the economic security strategy is to consolidate the United States-led international order by weakening the capabilities of “value-differentiated” countries in the cutting-edge fields of science and technology and upholding the monopoly of “shared values” countries. In essence, the preservation of the international order is also an important means of ensuring its vested interests and expanding its dominance in cutting-edge scientific and technological fields for Japan, which is positioned as a Western nation in terms of values and national psychology. (iii) Delaying the emergence of China and reducing the quality of development in China The strategic objective of Japan’s economic security strategy is subordinate to the overall goal of the national security strategy. Starting with Abe’s government, one of the key objectives of Japan’s national security strategy is to deter China from rising and ensure and expand Japan’s shared rights and interests in the United States-led “international order.” Kishida is both a foreign face of Abe's Government in issuing its first post-war National Security Strategy and an important participant and implementer of the strategy. Although Kishida may differ from Abe's policy choices, it can be judged from his campaign speeches, post-election governance speeches and specific initiatives, and from his (telephone) meetings with other heads of government, that Kishida's government will continue to aim to deter China from rising. “My country, in partnership with nations that share universal values, will insist on China's insistence on what should be done and strongly calls on China to act responsibly. In practice, Japan, from the standpoint of identity politics, has transformed China into a country that does not respect or even seeks to undermine the international order, and, through the politicization of media opinion, has tarnished China's international image, compressed the Chinese speaking space, and will delay or even deter China's rise with concrete measures such as economic security, while keeping its economy at the lower end of growth and non-development. The Chinese orientation of Japan’s economic and security strategy, which is largely dominated by China’s conservatism, is also a clear reflection of that strategy. In the context of US sanctions against China, Ghanlimin has repeatedly promoted distrust of China to the political, business, and public opinion circles. In a situation where the United States-led West is intensifying its trade war with China, according to Ghanlimin, Japan may be ostracized by Western markets if it moves backwards and strengthens economic cooperation with China, so that Japan needs to build a “firewall” against China in parallel with the West. Although Ghanlimin resigned as Chief of Staff as a result of the failure of the elections in the small constituencies in October 2021, his aggressive economic security vision was elevated to a national strategy. Japan’s economic and security strategy is also clearly oriented toward China’s important goal. In recent years, in Japan’s domestic political context, security concerns in the economy have been directed to China. In October 2021, Japan's main task of adding an “economic security phase” was to “ensure the supply of vital economic goods such as semiconductors and prevent the outflow of related technology”, “relieving Japan's overdependence on China and stabilizing national life and economic activity in the event of a radical change in relations between China and Japan”. The supply chain, science and technology industrial policies covered by the Economic Safety and Security Promotion Act, such as strengthening the construction of domestic supply chains to escape asymmetric dependence on a given country; safeguarding the security and reliability of key infrastructure; promoting public cooperation in the development of cutting-edge technology to ensure Japan's scientific and technological advantages during the industry's 4.0 era; maintaining confidentiality of specific proprietary technologies common to the civilian and military, and preventing the outflow of key technologies, are seen to some extent as a positive response by Japan to the strategic Chinese-American competition provoked by the United States, and the science and technology policy will serve as a point of strength for Japan's policies to ensure China's absolute dominance. III. IMPACT ON CHINA AND ITS LIMITS Some of the initiatives of Japan's economic security strategy will have a significant negative impact on China, but in the course of policy implementation, Japan will also be constrained by multiple forces that will make it difficult to fully meet the strategic expectations. (i) Impact of Japan's economic security strategy on China In the short term, Japan, using its “indispensability” vis-à-vis China at the bilateral level, has taken comprehensive initiatives, including direct deterrence, to promote “precision decoupling” of Sino-Japanese scientific and technological exchanges, relying on technological advantages, weaponize the non-symmetrical dependence of China’s supply chain, and use non-market instruments in economic activities to pursue political objectives. Japanese firms maintain a strong competitive advantage in areas such as robotic technology, mechanical equipment, parts of electronics, biopharmaceuticals, basic chemical materials and related technologies, and have a leading role in high-value-added products and services such as the design, R & D of related products and the manufacture of high-end parts and components. In the semiconductor industry, for example, where a total of 19 materials are required for semiconductor manufacturing, Japan accounts for more than 50 per cent of 14 materials, controlling 52 per cent of the global market, particularly in the areas of silicon crystal rounding, luminous emulsions, key couplings, emulators and fuse frameworks, and has a monopoly advantage, which determines that “precision decoupling” must slow the pace of technological innovation and progress in China and hinder the proper functioning of the supply chain. This is evidenced by a delay in the sale of high-end mobile phones affected by the “break core”. At the multilateral level, the joint efforts of the United States and European countries to adopt unilateralist measures, such as market exclusion, technological blockades and rule-barriers, and the joint blocking and siege of China's related enterprises will further exacerbate the difficult situation of China's key technological and industrial progress, affect market layout and the scale of space development, undermine the efforts of Chinese enterprises to upgrade their structural position in global value chains, and weaken China's science, technology and material base for building innovative countries. The most prominent case is the “non-acquisition of equipment that could be implanted into malicious functions such as theft, information disruption and the possible paralysis of information systems” under the pretext of “national security”. Although no policy target has been identified, Chinese and Chinese products have been excluded from the procurement lists of the Japanese Government and the Self-Defence Forces, and the electronic communications and network operators of Japan, Soft and Silver, the Japanese Telegraph and Telephone Corporation, the “Telecom Communications Unlimited” and the Xianxing Club, among others, have gradually dismantled Chinese products related to Chinese companies, which undoubtedly has significantly reduced the space for Chinese enterprises to develop. Secondly, China has limited its voice in rule-making in the emerging fields of science and technology in the world economy. With its own standards as a basic reference, Japan has consistently unilaterally dropped rules to pre-empt rules in emerging areas, supported by a voice-right advantage in international media opinion, which has magnified the “universality” of its rules, thus creating an aggressive tool to crush Chinese speech rights; and has joined forces with “shared values” countries to develop new rule-based policy instruments reflecting their preferences, in a seemingly legitimate mix of instruments to deter China at all levels and to maintain a “centre-outside” division of labour. In the area of infrastructure development, Japan has launched a “good-quality infrastructure partnership strategy” to develop international standards for new types of infrastructure, using “quality narratives” to squeeze China's voice on new types of infrastructure in countries along the “one-way” route. In the area of digital economic governance, Japan has adopted high quality and high standards, emphasizing the “triple possibility” of digital economic governance, i.e., the principles of liberalization, openness, non-discrimination and trustability, and the construction of an institutional highlands in the digital economy, stifling the potential for emerging market and developing countries, including China, to rise to the global digital economy structure. In the area of communications, Japan has been actively pursuing an intergenerational development strategy that, while going beyond 5G to direct 6G technology development research, has been accompanied by the forward introduction of some of the 6G series standards, pre-empting rule-making powers in related areas. Third, increasing the security dimension of world economic relations is hampering the depth of regional economic integration. After the cold war, economic relations in the international community showed a trend toward “weak security” – that is, a relative decline in the share of ideological or safety posts in the economic relations of major powers. However, Japan's economic security strategy, which brings security “cross-border” into the economic sphere, seeks to build economic and security linkages and, at the operational level, makes economic and trade agreements, scientific and technological exchanges, investment, etc. an instrument for political purposes, may have a negative impact on the regional economic integration already initiated under the Regional Comprehensive Economic Partnership Agreement (RECP), the institutionalization process and the future upgrading of relevant rules. Moreover, during the RCEP negotiations, Japan's political stance following India's withdrawal from the negotiating process reflected Japan's political intentions to attempt to balance and control China in the name of the economy. The Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), an alternative to the Trans-Pacific Partnership Agreement (TPP), has become a policy tool used by Japan to respond to the rise of China. Japan did not show a clear and positive attitude after China formally applied to join the CPTP, while Japan took a positive stance after the Taiwan region released the signal that it would join the CPTPP, which amply demonstrates Japan's politicization of economic and trade issues. Japan’s attempts to exploit Korea’s dependence on some of its materials to force South Korea to compromise in the context of the dispute between Japan and Korea, and Japan’s policy attempts to use economic means to pursue political objectives, have further exacerbated Korean-Japanese relations, which were already in the low valley, and the Chinese-Japanese-Korean leaders’ summit has again stalled, seriously hampering the process of cooperation between China and Korea. To be sure, Japan’s moves toward China’s “precision decoupling” and so forth will also have a positive effect. It will break the asymmetric dependence and inertia of some Chinese firms on external supply chains, activate the fundamental potential of innovation for change, and drive China to accelerate the construction of a fully autonomous science, technology, and innovation system with faster speed, greater determination, and stronger perseverance, providing a strong support for achieving a high-quality rise. (ii) Constraints to Japan's economic security strategy First, America’s policy toward China will be an important external factor affecting the progress and depth of Japan’s economic security strategy. In recent years, the US has taken a series of irresponsible initiatives that unilaterally undermine the basic dynamics of US-China relations. Following Biden’s assumption of office, US policy towards China has gradually shifted towards pragmatism, and while maintaining strategic restraint in China, it has also returned to some of its policy initiatives based on its domestic economic development needs: restarting high-level contacts and dialogue between the US and China; and delineating areas and hierarchies for China’s competitive posture and identifying areas for possible cooperation. More importantly, the United States business community has not generally supported a policy move to “de-link” China. According to US-China trade and trade data, the United States remained our third largest trading partner after ASEAN and the European Union in 2021, with bilateral trade totalling $7,556.6 billion, an increase of 28.7 per cent. In March 2022, the US Trade Representative’s office stated that it had restored 352 of the 549 pre-determinate products from the “301” tariff imposed on China. In April, the US trade representative, Daki, publicly declared that he would not seek to “separate” from China’s economy. A return to US economic and trade policy in China would constrain Japan’s economic and security strategy from being more focused on China’s goals. Second, China-Japan’s political and economic relations will hold the pace and depth of Japan’s economic and security strategy. China-Japan’s political relations have stagnated since 2017, and have been stagnating or even falling off track since 2020, but the overall situation has not been fundamentally undermined. Kishida also stated that “building stable relations with China is of the utmost importance to both countries, as well as to the region and the international community”, and that the current “strict movement of people due to the Covid-19 epidemic cannot be cut off from China-Japan business exchanges”. Relevant scholars have also suggested that “cooperative strategies are needed in order to succeed in a competitive strategy.” Chinese customs data show that in 2021 Japan maintained the position of the fourth largest trading partner of China, excluding ASEAN, the European Union as an international organization, and Japan as the second largest trading partner of China, after the United States. At the regional level, the entry into force of RCEP at the beginning of 2022, with zero-tariff coverage from China and China going from 8 per cent to 86 per cent, will actually strengthen the trade links between the two countries, increase the scale of trade in goods and could affect the layout of the industrial chains and supply chains of the two countries. Third, there is a tension between strategic and capital interests. The profit-making nature of business will be the political colour of Japan’s economic security strategy, will weaken its political function, and will even slow down and change its process. One of the core elements of Japan’s economic security strategy is supply-chain security, which promotes the localization of vital goods’ industrial chains and diversification of supply chains. The localization of industrial chains requires cross-border capital, while the production layout of multinational enterprises is the result of a combination of market forces, policy costs, and security risks, and the pursuit of maximization of profits. One of Japan’s supply-chain diversification initiatives is funding firms to transfer production lines to “shared values” countries such as India and ASEAN. But there are problems in these countries, such as immature skilled workers, poor infrastructure, poor worker regulatory awareness, and low market growth. By contrast, Japan’s rich profits in China, and the large capacity of the Chinese market, among other factors, will constrain the pace of supply chain transfers. In January 2022, the Economy and Finance News conducted a questionnaire survey of 118 Japanese firms, which revealed that none of the firms “intended to withdraw from the (China) market.” According to the survey conducted by the Cabinet Office, nearly 70% of Japanese manufacturing companies still do not consider adjusting their supply networks. As a result, it is difficult for Japan’s economic security initiatives to achieve the expected results, at least in the short term. Moreover, in the short term, political forces and corresponding instruments may create artificial barriers to the development and diffusion of science and technology, but in the long run efforts to prevent the spread of technology, whether in the economic or military spheres, will fail. In the best of circumstances, countries can only slow the spread of technology, but they cannot stop it. Japan’s policy attempt to slow down or even disrupt China’s rise by blocking technology transfers and spillovers is bound to be in trouble. IV. CONCLUSION Japan's economic security strategy, which enjoys a high degree of government-wide recognition for the security narrative's political modus operandi, will be built into one of the strong pillars of a “new-era realism diplomacy” that brings together Japan's resources and national strength. From the point of view of strategic positioning and target design, the supply chain implications of Japan's current and future economic security go far beyond the economic dimension and seek to engage economically in value-bound geopolitical issues, promote cross-border linkages between the economy and security, bring values into supply chain security with global public goods attributes, take advantage of the turbulent turn of the century, actively mobilize existing strategic resources, use hybrid policy instruments and maximize the pursuit of security and geopolitical objectives. The fact that Japan has added an “economic version 2+2” consultative mechanism shows that Japan is trying to “value” the economy by “securitizing” it, tying it to the strategic operating trajectory of the United States, expanding its shared privileges in the hegemonistic system of the United States, alleviating Japan's positional anxiety and dependency, increasing its bargaining power in the United States global strategy and expanding its strategic autonomy. But Japan's self-inflicted policy design does not help to alleviate its real dilemma in terms of security and economic reverse dependence. It will also trap Japan, which is both “psychological” and “geographic” in a deeper sense of positioning anxiety and will not serve its goal of pursuing the status of a large country. As a target country for Japan's economic security strategy, China, while following up on Japan's policy initiatives, has maintained strategic determination within the country and enhanced its “blood-building” capability; continues to stabilize the fundamentals of China-Japan relations at the bilateral level, creating new opportunities for cooperation and holding its “decoupling” initiative, using Asaka as an entry point; and establishing a new multi-layered, 3-dimensional economic, scientific and technological partnership at the multilateral level, with negative effects on the “decoupling” of Japan from China to China. Economy of Japan Foreign Affairs of Japan China-Japan relations This post is edited as follows: Poster: Thoughts of Love (http://www.aisixiang.com), column: Academies of Heaven > International Relations > Regional Issues Link to this paper: http://www.aisixiang.com/data/134886.html Source: International Studies, 2022, 5 issues Enter an e-mail address in the box, separated by a semi-accompanied comma (,) between multiple emails.


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Zhu Haiyan: Japan's Economic Security Strategy and Its Influence on China


2022-06-24: [Article Link]  Economy of Japan Foreign Affairs of Japan China-Japan relations (a) To build a coherent economic security strategy, based on the integration of existing policy practices, the Government of Japan is promoting a “strategic indispensability” of the relevant political legal system, enhancing domestic back-up capacity in the production chain, and building exclusive key technological and industrial alliances with “shared values” countries to promote diversification of supply chains. Japan's economic security strategy is aimed at alleviating the negative dependence on security and the economy and establishing a strong position in the new economic and trade order; strengthening the Japan-United States alliance in support of the United States competition for technology against China; and reducing the quality of China's rise in an attempt to keep it at a low level of growth and underdevelopment. Japan's relevant initiatives will pose some obstacle to China's scientific and technological progress, regional cooperation and participation in global economic governance, but it will be difficult for Japan to fully meet its strategic expectations owing to internal and external constraints. [Keywords] Economic security strategy, Japanese economy, Japanese diplomacy, China-Japan relations [Introduction by the author] Xu Haiyan, Associate Professor, Faculty of Political Law and Public Administration, Shaanxi Teachers University * Thanks to the editorial department of the International Studies and the anonymous review experts for their suggestions for changes, which are entirely the responsibility of the author. On 11 May 2022, the Law on the Promotion of Economic Security and Safety, proposed by the Government of the Japan Democratic Party, was adopted by the Senate and formally enacted into law and will be implemented in stages in 2023. This means that the economic security strategy-related initiatives of the Government of Akita, which seeks to achieve geopolitical objectives by means of economic science and technology, will be further refined, implemented and strengthened under the legal framework, and their future direction and impact deserve close attention. In the context of the growing convergence between international political and economicization and the politicization of the world economy, and the increasing pressure exerted by the United States on China in the field of economic science and technology, it is important to explore the relevance of Japan's economic security strategy as a major economic and technological power and its impact on China. I. Policy initiatives of Japan's economic security strategy As a country with relatively unfavourable resources and geographical conditions, Japan has long developed an outward-oriented model of economic development that is particularly sensitive to the external economic environment. In the 1930’s, Japan began to focus on economic security, particularly in transport corridors, in the context of United States sanctions on imports of materials such as Japanese steel. After World War II, as the Japanese economy entered a period of rapid development, the United States began to use market, financial, industrial and even political instruments to limit Japan's economic, scientific and technological capabilities and further improvements in industrial competitiveness, triggering a new round of concern for Japan's economic security. At present, the United States has initiated a strategic game against China centred on competition in science and technology, refocusing the Government of Akita on economic security and promoting a systematic economic security strategy based on established policy practices. (i) Improvement and strengthening of the economic defence system In recent years, the Government of Japan has embarked on the reform and improvement of the institutional mechanisms for economic security and security, and has enacted specific legislation to make it a political legal guarantee of an economic security strategy. In April 2020, Japan added an “economic group” to the National Economic Council system of the United States, under the National Security Administration, to serve as a “masterhouse” for the integration of economic and security initiatives, with the aim of breaking down the fragmentation of sectors, strengthening the monopolistic leadership of economic security and strategically formulating key industrial policies from a national security perspective, and integrating economic and trade-related decision-making, among others. In response, as an important promoter of Japan's economic security strategy, Ganli Ming stated that “Japan has finally emerged as a department that integrates economic and intelligence considerations and policies”. Since then, other relevant departments have gradually restructured their organizational structure: the Space Network Policy Office, which is part of the Safety and Security Policy Section, has been restructured into the New Safety and Security Issues Policy Room; the Ministry of Defence has created an Economic Security Intelligence Officer within the Investigation Section of the Defence Policy Directorate, which is responsible for collecting and analysing information on economic security; and the Ministry of Economy, Industry and Industry has directly established the Economic Security Unit. In October 2021, the Government added a “economic security phase” to further upgrade the specifications of the economic security system; in November, an Economic Security Advancement Conference was established with the Prime Minister as the Speaker of the Parliament, and a Legal Preparedness Office for Economic Security was established in the Cabinet to advance the relevant legislation. The adoption of the Economic Security Promotion Act provides legal safeguards for policies relating to economic security and avoids any radical change in policy as a result of changes in government. In addition, the Government has actively promoted the establishment of institutions for economic security by local governments and business groups in order to ensure the smooth functioning of policy interfaces and implementations between the people, the people and the State, to enable the adoption and coordination of economic security-related policies and to raise public awareness and acceptance of the sensitivity of economic security issues and to create a socio-economic security system. In January 2022, Aichi County set up the Economic Security Response Team to share information on industrial espionage with local businesses in order to prevent the disclosure of cutting-edge technical and confidential information. In April 2022, Japan's Electricity (NEC) established a director responsible for economic security and set up an “economic safety and security room.” The Japan Production Institute also plans to set up a department to carry out a more rigorous and precise “pre-trial review” of operations in areas related to economic security. The Japan Police Department, for its part, works with the government to raise awareness about business, including counter-intelligence, information disclosure, and protection. At the same time, the Japanese government plans to set up a special think tank on economic security in 2023, bringing together relevant personnel from the economy and academia, collecting and analysing information on developments in key cutting-edge technology research and development, and providing academic support for economic security decision-making. (ii) Increased economic, scientific and technological capacity to ensure the security of infrastructure equipment and services The technical and industrial policies of Japan's economic security strategy are divided into two levels: on the one hand, to continue to strengthen cutting-edge technologies, to establish an irreplaceable and absolute advantage at the stake of life and death in other countries, and to ensure “strategic indispensability” as an offensive ability to apply “coercive means” to other countries for political ends; and, on the other hand, to promote the diversification of supply chains abroad while strengthening the back-up of domestic industrial chains, to provide the foundation for the application of offensive capabilities and to reduce losses that may arise in the event of counter-insurgency. In December 2021, Japan’s Diet adopted the largest budget to date proposed by the Ashida government, and set up $774 billion in earmarked funds to support indigenous production in sophisticated semiconductor enterprises. At the same time, Congress adopted “Amendments to the Links Act in support of new sophisticated semiconductor plants”, which provide the Government with financial support for sophisticated semiconductor plants in areas such as new data centres, automation, etc. In Japan, “the law establishing State subsidies for the construction of semiconductor plants is the first to be enacted.” The new subsidiary, JASM, in Kumamoto County, was the first project to be supported by the Government of Japan. Japan has also stepped up its support for talent development to enhance long-term competitiveness, and has stated that “the expansion of bachelor's, master's and doctoral programmes, among others, will be reorganized to promote talent development in the field of science and technology. In order to form the world’s leading research universities, a university fund of 100,000 billion yen will be set up this year.” To ensure its advantages, Japan will also increase its protection of civil-military-related patents, while conducting more restrictive reviews of the qualifications, fields of study, and even the direction of employment of students studying abroad, in order to prevent the skills drain. Japan has made efforts to reduce the external dependence of important industries, expand the back-up of domestic production capacity, raise the level of localization of the industrial chain and ensure the maintenance of social stability in times of emergency. To this end, Japan has introduced a “domestic investment promotion subsidy as a supply chain policy” that supports the diversification of supply chain layouts for products that are highly concentrated in a single country or region and are vital to the healthy life of the nation, and reduces the risk of supply disruptions. Under the policy guidance of the Government, Japanese enterprises, including Murada Productions, Mitsubishi Electrics, TDK Cutters, etc., have significantly increased the Japanese conversion of core parts and components, actively adapting the supply chain to a Japanese-centred mode of operation. In addition, Japan has intensified its security review of infrastructure equipment. In order to prevent important information leaks due to cyberattacks, the Economic Security Promotion Act provides for periodic review of the security of equipment of major infrastructure enterprises in 14 areas, such as information communications, transport, energy, finance, medical care, and the identification of sources for the procurement of equipment, such as servers that store personal information and management systems of power stations, and regular disclosure of relevant information on maintenance service providers. (iii) Building key technology and industry alliances Japan has joined forces with Western countries to build exclusive, internal-cycle-based key technological and industrial alliances. The Japan-United States Alliance is an important pillar of Japan’s economic security strategy. In January 2022, the new “Economy 2+2” in Japan and the United States attempted to advance the high-level and wide-ranging discussions between Japan and the United States in the context of “the diminishing boundaries of economic policy and foreign policy” to create a multiplier effect between them and the existing framework in order to strengthen the core partnership between Japan and the United States in areas including climate change. In April, Japan and the United States began to coordinate a draft “Indian-Pacific economic framework” aimed, inter alia, at ensuring stable supply of strategic goods, with a focus on semiconductor supply chain cooperation, with plans to pre-create a Quadripartite Federation of Chips, including Korea and Taiwan, China. In May, at the first Ministerial Conference on Business-Industrial Partnerships, Japan and the United States reached a fundamental consensus on cooperation in the development of sophisticated semiconductors, including through a complementary approach. Japan is an active participant in the value-oriented, value-sensitive and critical supply chain ecosystem-building process led by the Group of Seven (G7). Japan is a member of the British initiative, the “D10 Club,” which aims to invest in science and technology companies in member countries, creating an alternative pool of suppliers of 5G equipment and other technologies, and moving away from China’s dependence on science and technology. Some high-tech companies in Japan have also joined the Next Generation Alliance (Next G Alliance) initiative, launched by the United States Telecommunications Industry Solutions Alliance (ATS). In March 2022, the Next Generation Coalition launched a 6G development road map focusing on standard-setting in areas such as the new “green generation” network and data storage, materials, equipment and hardware manufacturing, and the next generation of mobile networks, with sustainable development at its core. In addition, Japan is actively participating in the “International Climate Action Network” of the Artemis Agreement, led by Western countries, which essentially constructs and covers digital space (fundamental elements such as 5G/6G, artificial intelligence, quantum and semiconductors), outer space (satellite Internet, Moon, deep space), ecological space (focusing on climate governance, clean energy, environmental protection, etc.), the whole area of space development (infrastructure), the fine-tuning of key technologies and the ecological system of industrial alliances. (iv) Promotion of supply chain diversification Japan actively promotes the process of diversifying supply chains and strengthening supply-chain resilience, including R & D, design, manufacturing, etc. The White Paper on World Economic Trends in Japan’s Economic Environment, published by the Cabinet Office in February 2022, shows that China’s share of over 50% of Japan’s approximately 5,000 import categories (in total terms) is 1,133 (23.0%). The White Paper stressed that “if the trend towards dependence on specific countries for the origin of imports continues to intensify, the difficulty of responding to supply chain crises will increase significantly and measures will need to be taken to prepare for the strengthening of vulnerable supply chains. Japan has been accelerating the process of diversifying the supply chain since the outbreak of Covid-19 Pandemic, supported by greater adjustment through financial means. Japan implemented three supply chain adjustment support projects in July, November and December 2020, providing subsidies to relevant enterprises, diversifying the production base within the Asian industry network and directing the relocation of the production base of relevant enterprises to countries in South-East Asia in a policy-oriented manner, attempting to establish it as a focus area for overseas manufacturing delivery centres for Japanese enterprises, and taking advantage of opportunities to strengthen productive cooperation with relevant countries to enhance supply chain resilience. Viet Nam, Thailand and Malaysia, among others, have become the main host countries for the industrial chain transfer of Japanese enterprises, and Viet Nam has gradually become a core country, even from the marginal countries that absorb Japan's transfer. According to statistics published in December 2021 by the Japan Agency for Trade Renewal (JETRO) Overseas Survey of Japanese Capital Enterprises: Asia, Oceania, the proportion of enterprises in Viet Nam that plan to expand their operations in the next 1-2 years is expected to reach 55.3 per cent, which is well above the average of 40.9 per cent in China and even below 43.6 per cent in China. Other South-East Asian countries, such as Cambodia (48.9 per cent), Indonesia (45.3 per cent), Malaysia (43.2 per cent) and Singapore (41.3 per cent), have also had a higher share of interest in expanding their operations than China, indicating that future Chinese-owned enterprises may continue to be downsized. India, as an emerging economy, has also become an important target country for the Japanese government to encourage the transfer of productive capacity and the restructuring of supply chains. At the bilateral level, Japan actively develops good political relations with India, providing political guarantees for enhanced economic, scientific, and technological cooperation. In March 2022, Kishida visited India on the occasion of the 70th anniversary of the Japan-India border, proposing the formation of the “Japan-India Special Global Strategic Partnership”, in which “building strong global supply chains in the post-epidemiological era” would serve as an important material basis for the day-print relationship. In its joint statement entitled " Day-India Partnership for Peace, Stability and Prosperity in the Post-Epidemic Age ", both sides planned the overall direction of Japan-India cooperation, and Japan offered 31,258 million yen in assistance for India's construction in the areas of health, infrastructure, climate change, agriculture, etc., which, while contributing to India's economic recovery and improving the living environment of society, would also provide a more mature, refined and stable foundation for the diversification of Japan's supply chain. In addition, Japan has strengthened its supply chain cooperation with India through multilateral mechanisms such as the Japan-India Trilateral Framework and the US-Japan-India-India Quadrilateral Framework, working in partnership with civil society. Under the policy direction of the Japanese government, Japanese firms in India have indicated that they will increase their share of investment operations over the next 1-2 years to the top of the countries surveyed in Asia (70.1%), well above the average of 43.6%. II. Drivers of Japan's economic security strategy Japan's economic security strategy is ostensibly a response to the US-China strategic competition that has been provoked by the United States, with science and technology competition at its core, with the underlying goal of seeking a favourable position in the new economic and technological order. In the context of Japan's relevant policy practice, it is implicit in the logic that: Alleviating Japan's back-to-back dependence on security and the economy, seeking the status of a major power in international change, and preserving the “international order” on which Japan relies for national positioning will deter China from rising. (i) Mitigating security and economic reverse dependence In the aftermath of World War II, Japan's allied hegemonies sought the status of a major Power by economic means, but the reality of the “single-pulmonary nation” limited Japan's ability to achieve the goals of the political Powers. In 2010, when China’s economy was reversed, Japan was caught in a general national panic and strategic anxiety about its status. Former Prime Minister Abe took advantage of this panic and anxiety to push ahead with the building of defence forces and the reform of the defence system. During Abe’s long term in office, the Self-Defence Forces were equipped to become a modern military force with a strong operational capability. The Abe government can be said to have officially launched a substantial process of pursuing political and military powers, with visible progress. The Kishida government has consolidated and continues to enrich the status of the major powers with an economic security strategy. Kishida has inherited Japan’s historical genes and political preferences for the status of the major powers, with “leading the international community” as one of its diplomatic objectives. Motivated by the pursuit of the goal of the status of the major Powers, Ashida, on the one hand, insisted on strengthening its defence and reforming and perfecting its defence system, declaring that in the process of revising the National Security Strategy (established in 2013), the defence plan outline (revised in 2018) and the medium-term defence force rehabilitation plan (revised in 2018), “it would not exclude all options such as the ability to attack enemy bases”. On the other hand, Akita has changed fields and rules, using the modus operandi of creating new strategic domains to enhance Japan’s voice. The economic security strategy is to consolidate and reconfigure existing practices on the basis of succession and integration of existing policies, upgrading them to an important part of the national security strategy. One of the internal objectives of this move is to use it as a tool to create political performance, while using economic strength to achieve geopolitical goals and re-establish the status of a major power. Japan’s high-level national strategy to launch systematic economic security-related initiatives will have a chain of reactions in the international community, giving Japan pre-eminence and corresponding voice in the formation of “international rules” in the area of economic security, and increasing its sense of existence and influence. Through the construction of a security strategy in the economic sphere, Japan will establish a strategic national security ecosystem covering all areas of diplomacy, economy and defence, break down security rhetorical barriers between the various fields, construct a system of cross-border linkages for national security and address the dilemma of security and economic reverse dependence, which could serve as a model for future national security construction. An economic security strategy will ensure Japan’s dominant position in the re-engineering of supply chains within a small United States-led multilateral system. In the international community, the major powers actively pursue relative economic advantages, typically by using the wealth of resources available for that purpose for political security purposes. The sudden crisis characteristics of Covid-19 Pandemic and its global spread, as well as its long-term development, have impacted on the economic functioning of global supply chains and raised concerns about supply chain security in countries that high reliance on foreign suppliers may seriously undermine economic and social security in emergency situations, a perception that prompts countries to begin to secure supply chains. Japan's economic security strategy seeks to use the slotting period of United States supply chain policy adjustments to refine and strengthen the Japanese industrial chain, enhance its capacity to respond to sudden-onset emergencies, foster cutting-edge industries with “strategic indispensability”, enhance the resilience and resilience of the entire industrial chain, and re-establish the material base of a large country. Follow-up to the United States is also one of Japan's complementary initiatives towards the goals of the major Powers. In the context of the US scientific and technological siege of China, Japan firmly supports and follows the US in order to preserve its top position in the U.S. key technology and industrial union architecture, preserve its shared prerogatives in the global supply chain of key industries, gain greater access to U.S. technology, and partially resolve the back-to-back dilemma between security and the economy, thereby maximizing Japan's national interests. Following the establishment of a supply chain between Japanese and Chinese enterprises, the United States has imposed sanctions on Chinese enterprises, and Japanese enterprises may be listed, thereby being excluded from the supply chain by key United States-led technological and industrial alliances, so that Japan needs to support and follow United States sanctions against China. (ii) Enriching and strengthening the Japan-United States alliance to preserve the “international order” on which Japan relies to highlight its “optimity” Japan has integrated the coordination and cooperation of economic, scientific and technological policies of the United States of America into the functioning of the Japan-United States Alliance and has expanded its membership in order to adapt it to the trend of international political and economic globalization and the politicization of the world economy. The Japan-United States Alliance is the cornerstone of Japan's diplomacy and security, and the economic security strategy, as an important component of the national security strategy, must also have as its basic objective the preservation and strengthening of the Japan-United States Alliance. Kishida vowed “to raise to a higher level the Japan-United States alliance, which is the foundation of the Indo-Pacific region and of world peace and prosperity”. In January 2022, both the Japan-United States “2+2” talks and the summit video meeting “reaffirmed their commitment to a rules-based international order and fundamental values and principles” and “committed themselves to joint investments to accelerate innovation and ensure that the Alliance maintains its technological advantages in key and emerging areas, including artificial intelligence, machine learning, targeted energy and quantum computing”. By deepening cooperation in new and emerging areas, Japan and the United States could join forces to strengthen their strengths in cutting-edge technology, give new impetus to alliance relations, increase the convergence of bilateral relations and accelerate the process of modernization of the alliance. The preservation and consolidation of the United States-led “international order.” Since the global eruption, Covid-19 Pandemic has seen an accelerated shift in international power. Japan believes that “the world is now confronted with the serious problem of the destabilization of a rules-based, free international order” and that “the powerful States have intensified their challenge to the United States-led international order, which has long been the basis for the peace and prosperity of the international community”. “The rule-based international order is a matter of life and death for the survival and prosperity of Japan”, and Japan should work to ensure “the dominance of free democratic forces centred on Japan and the United States in the future international order”. In Cabinet resolutions and in the Speech from the Throne, Akita placed “the determination to uphold the universal values of freedom, democracy, human rights and the rule of law” at the top of the “three resolves” of diplomacy and security. Following that line of words, the economic security strategy is to consolidate the United States-led international order by weakening the capabilities of “value-differentiated” countries in the cutting-edge fields of science and technology and upholding the monopoly of “shared values” countries. In essence, the preservation of the international order is also an important means of ensuring its vested interests and expanding its dominance in cutting-edge scientific and technological fields for Japan, which is positioned as a Western nation in terms of values and national psychology. (iii) Delaying the emergence of China and reducing the quality of development in China The strategic objective of Japan’s economic security strategy is subordinate to the overall goal of the national security strategy. Starting with Abe’s government, one of the key objectives of Japan’s national security strategy is to deter China from rising and ensure and expand Japan’s shared rights and interests in the United States-led “international order.” Kishida is both a foreign face of Abe's Government in issuing its first post-war National Security Strategy and an important participant and implementer of the strategy. Although Kishida may differ from Abe's policy choices, it can be judged from his campaign speeches, post-election governance speeches and specific initiatives, and from his (telephone) meetings with other heads of government, that Kishida's government will continue to aim to deter China from rising. “My country, in partnership with nations that share universal values, will insist on China's insistence on what should be done and strongly calls on China to act responsibly. In practice, Japan, from the standpoint of identity politics, has transformed China into a country that does not respect or even seeks to undermine the international order, and, through the politicization of media opinion, has tarnished China's international image, compressed the Chinese speaking space, and will delay or even deter China's rise with concrete measures such as economic security, while keeping its economy at the lower end of growth and non-development. The Chinese orientation of Japan’s economic and security strategy, which is largely dominated by China’s conservatism, is also a clear reflection of that strategy. In the context of US sanctions against China, Ghanlimin has repeatedly promoted distrust of China to the political, business, and public opinion circles. In a situation where the United States-led West is intensifying its trade war with China, according to Ghanlimin, Japan may be ostracized by Western markets if it moves backwards and strengthens economic cooperation with China, so that Japan needs to build a “firewall” against China in parallel with the West. Although Ghanlimin resigned as Chief of Staff as a result of the failure of the elections in the small constituencies in October 2021, his aggressive economic security vision was elevated to a national strategy. Japan’s economic and security strategy is also clearly oriented toward China’s important goal. In recent years, in Japan’s domestic political context, security concerns in the economy have been directed to China. In October 2021, Japan's main task of adding an “economic security phase” was to “ensure the supply of vital economic goods such as semiconductors and prevent the outflow of related technology”, “relieving Japan's overdependence on China and stabilizing national life and economic activity in the event of a radical change in relations between China and Japan”. The supply chain, science and technology industrial policies covered by the Economic Safety and Security Promotion Act, such as strengthening the construction of domestic supply chains to escape asymmetric dependence on a given country; safeguarding the security and reliability of key infrastructure; promoting public cooperation in the development of cutting-edge technology to ensure Japan's scientific and technological advantages during the industry's 4.0 era; maintaining confidentiality of specific proprietary technologies common to the civilian and military, and preventing the outflow of key technologies, are seen to some extent as a positive response by Japan to the strategic Chinese-American competition provoked by the United States, and the science and technology policy will serve as a point of strength for Japan's policies to ensure China's absolute dominance. III. IMPACT ON CHINA AND ITS LIMITS Some of the initiatives of Japan's economic security strategy will have a significant negative impact on China, but in the course of policy implementation, Japan will also be constrained by multiple forces that will make it difficult to fully meet the strategic expectations. (i) Impact of Japan's economic security strategy on China In the short term, Japan, using its “indispensability” vis-à-vis China at the bilateral level, has taken comprehensive initiatives, including direct deterrence, to promote “precision decoupling” of Sino-Japanese scientific and technological exchanges, relying on technological advantages, weaponize the non-symmetrical dependence of China’s supply chain, and use non-market instruments in economic activities to pursue political objectives. Japanese firms maintain a strong competitive advantage in areas such as robotic technology, mechanical equipment, parts of electronics, biopharmaceuticals, basic chemical materials and related technologies, and have a leading role in high-value-added products and services such as the design, R & D of related products and the manufacture of high-end parts and components. In the semiconductor industry, for example, where a total of 19 materials are required for semiconductor manufacturing, Japan accounts for more than 50 per cent of 14 materials, controlling 52 per cent of the global market, particularly in the areas of silicon crystal rounding, luminous emulsions, key couplings, emulators and fuse frameworks, and has a monopoly advantage, which determines that “precision decoupling” must slow the pace of technological innovation and progress in China and hinder the proper functioning of the supply chain. This is evidenced by a delay in the sale of high-end mobile phones affected by the “break core”. At the multilateral level, the joint efforts of the United States and European countries to adopt unilateralist measures, such as market exclusion, technological blockades and rule-barriers, and the joint blocking and siege of China's related enterprises will further exacerbate the difficult situation of China's key technological and industrial progress, affect market layout and the scale of space development, undermine the efforts of Chinese enterprises to upgrade their structural position in global value chains, and weaken China's science, technology and material base for building innovative countries. The most prominent case is the “non-acquisition of equipment that could be implanted into malicious functions such as theft, information disruption and the possible paralysis of information systems” under the pretext of “national security”. Although no policy target has been identified, Chinese and Chinese products have been excluded from the procurement lists of the Japanese Government and the Self-Defence Forces, and the electronic communications and network operators of Japan, Soft and Silver, the Japanese Telegraph and Telephone Corporation, the “Telecom Communications Unlimited” and the Xianxing Club, among others, have gradually dismantled Chinese products related to Chinese companies, which undoubtedly has significantly reduced the space for Chinese enterprises to develop. Secondly, China has limited its voice in rule-making in the emerging fields of science and technology in the world economy. With its own standards as a basic reference, Japan has consistently unilaterally dropped rules to pre-empt rules in emerging areas, supported by a voice-right advantage in international media opinion, which has magnified the “universality” of its rules, thus creating an aggressive tool to crush Chinese speech rights; and has joined forces with “shared values” countries to develop new rule-based policy instruments reflecting their preferences, in a seemingly legitimate mix of instruments to deter China at all levels and to maintain a “centre-outside” division of labour. In the area of infrastructure development, Japan has launched a “good-quality infrastructure partnership strategy” to develop international standards for new types of infrastructure, using “quality narratives” to squeeze China's voice on new types of infrastructure in countries along the “one-way” route. In the area of digital economic governance, Japan has adopted high quality and high standards, emphasizing the “triple possibility” of digital economic governance, i.e., the principles of liberalization, openness, non-discrimination and trustability, and the construction of an institutional highlands in the digital economy, stifling the potential for emerging market and developing countries, including China, to rise to the global digital economy structure. In the area of communications, Japan has been actively pursuing an intergenerational development strategy that, while going beyond 5G to direct 6G technology development research, has been accompanied by the forward introduction of some of the 6G series standards, pre-empting rule-making powers in related areas. Third, increasing the security dimension of world economic relations is hampering the depth of regional economic integration. After the cold war, economic relations in the international community showed a trend toward “weak security” – that is, a relative decline in the share of ideological or safety posts in the economic relations of major powers. However, Japan's economic security strategy, which brings security “cross-border” into the economic sphere, seeks to build economic and security linkages and, at the operational level, makes economic and trade agreements, scientific and technological exchanges, investment, etc. an instrument for political purposes, may have a negative impact on the regional economic integration already initiated under the Regional Comprehensive Economic Partnership Agreement (RECP), the institutionalization process and the future upgrading of relevant rules. Moreover, during the RCEP negotiations, Japan's political stance following India's withdrawal from the negotiating process reflected Japan's political intentions to attempt to balance and control China in the name of the economy. The Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), an alternative to the Trans-Pacific Partnership Agreement (TPP), has become a policy tool used by Japan to respond to the rise of China. Japan did not show a clear and positive attitude after China formally applied to join the CPTP, while Japan took a positive stance after the Taiwan region released the signal that it would join the CPTPP, which amply demonstrates Japan's politicization of economic and trade issues. Japan’s attempts to exploit Korea’s dependence on some of its materials to force South Korea to compromise in the context of the dispute between Japan and Korea, and Japan’s policy attempts to use economic means to pursue political objectives, have further exacerbated Korean-Japanese relations, which were already in the low valley, and the Chinese-Japanese-Korean leaders’ summit has again stalled, seriously hampering the process of cooperation between China and Korea. To be sure, Japan’s moves toward China’s “precision decoupling” and so forth will also have a positive effect. It will break the asymmetric dependence and inertia of some Chinese firms on external supply chains, activate the fundamental potential of innovation for change, and drive China to accelerate the construction of a fully autonomous science, technology, and innovation system with faster speed, greater determination, and stronger perseverance, providing a strong support for achieving a high-quality rise. (ii) Constraints to Japan's economic security strategy First, America’s policy toward China will be an important external factor affecting the progress and depth of Japan’s economic security strategy. In recent years, the US has taken a series of irresponsible initiatives that unilaterally undermine the basic dynamics of US-China relations. Following Biden’s assumption of office, US policy towards China has gradually shifted towards pragmatism, and while maintaining strategic restraint in China, it has also returned to some of its policy initiatives based on its domestic economic development needs: restarting high-level contacts and dialogue between the US and China; and delineating areas and hierarchies for China’s competitive posture and identifying areas for possible cooperation. More importantly, the United States business community has not generally supported a policy move to “de-link” China. According to US-China trade and trade data, the United States remained our third largest trading partner after ASEAN and the European Union in 2021, with bilateral trade totalling $7,556.6 billion, an increase of 28.7 per cent. In March 2022, the US Trade Representative’s office stated that it had restored 352 of the 549 pre-determinate products from the “301” tariff imposed on China. In April, the US trade representative, Daki, publicly declared that he would not seek to “separate” from China’s economy. A return to US economic and trade policy in China would constrain Japan’s economic and security strategy from being more focused on China’s goals. Second, China-Japan’s political and economic relations will hold the pace and depth of Japan’s economic and security strategy. China-Japan’s political relations have stagnated since 2017, and have been stagnating or even falling off track since 2020, but the overall situation has not been fundamentally undermined. Kishida also stated that “building stable relations with China is of the utmost importance to both countries, as well as to the region and the international community”, and that the current “strict movement of people due to the Covid-19 epidemic cannot be cut off from China-Japan business exchanges”. Relevant scholars have also suggested that “cooperative strategies are needed in order to succeed in a competitive strategy.” Chinese customs data show that in 2021 Japan maintained the position of the fourth largest trading partner of China, excluding ASEAN, the European Union as an international organization, and Japan as the second largest trading partner of China, after the United States. At the regional level, the entry into force of RCEP at the beginning of 2022, with zero-tariff coverage from China and China going from 8 per cent to 86 per cent, will actually strengthen the trade links between the two countries, increase the scale of trade in goods and could affect the layout of the industrial chains and supply chains of the two countries. Third, there is a tension between strategic and capital interests. The profit-making nature of business will be the political colour of Japan’s economic security strategy, will weaken its political function, and will even slow down and change its process. One of the core elements of Japan’s economic security strategy is supply-chain security, which promotes the localization of vital goods’ industrial chains and diversification of supply chains. The localization of industrial chains requires cross-border capital, while the production layout of multinational enterprises is the result of a combination of market forces, policy costs, and security risks, and the pursuit of maximization of profits. One of Japan’s supply-chain diversification initiatives is funding firms to transfer production lines to “shared values” countries such as India and ASEAN. But there are problems in these countries, such as immature skilled workers, poor infrastructure, poor worker regulatory awareness, and low market growth. By contrast, Japan’s rich profits in China, and the large capacity of the Chinese market, among other factors, will constrain the pace of supply chain transfers. In January 2022, the Economy and Finance News conducted a questionnaire survey of 118 Japanese firms, which revealed that none of the firms “intended to withdraw from the (China) market.” According to the survey conducted by the Cabinet Office, nearly 70% of Japanese manufacturing companies still do not consider adjusting their supply networks. As a result, it is difficult for Japan’s economic security initiatives to achieve the expected results, at least in the short term. Moreover, in the short term, political forces and corresponding instruments may create artificial barriers to the development and diffusion of science and technology, but in the long run efforts to prevent the spread of technology, whether in the economic or military spheres, will fail. In the best of circumstances, countries can only slow the spread of technology, but they cannot stop it. Japan’s policy attempt to slow down or even disrupt China’s rise by blocking technology transfers and spillovers is bound to be in trouble. IV. CONCLUSION Japan's economic security strategy, which enjoys a high degree of government-wide recognition for the security narrative's political modus operandi, will be built into one of the strong pillars of a “new-era realism diplomacy” that brings together Japan's resources and national strength. From the point of view of strategic positioning and target design, the supply chain implications of Japan's current and future economic security go far beyond the economic dimension and seek to engage economically in value-bound geopolitical issues, promote cross-border linkages between the economy and security, bring values into supply chain security with global public goods attributes, take advantage of the turbulent turn of the century, actively mobilize existing strategic resources, use hybrid policy instruments and maximize the pursuit of security and geopolitical objectives. The fact that Japan has added an “economic version 2+2” consultative mechanism shows that Japan is trying to “value” the economy by “securitizing” it, tying it to the strategic operating trajectory of the United States, expanding its shared privileges in the hegemonistic system of the United States, alleviating Japan's positional anxiety and dependency, increasing its bargaining power in the United States global strategy and expanding its strategic autonomy. But Japan's self-inflicted policy design does not help to alleviate its real dilemma in terms of security and economic reverse dependence. It will also trap Japan, which is both “psychological” and “geographic” in a deeper sense of positioning anxiety and will not serve its goal of pursuing the status of a large country. As a target country for Japan's economic security strategy, China, while following up on Japan's policy initiatives, has maintained strategic determination within the country and enhanced its “blood-building” capability; continues to stabilize the fundamentals of China-Japan relations at the bilateral level, creating new opportunities for cooperation and holding its “decoupling” initiative, using Asaka as an entry point; and establishing a new multi-layered, 3-dimensional economic, scientific and technological partnership at the multilateral level, with negative effects on the “decoupling” of Japan from China to China. Economy of Japan Foreign Affairs of Japan China-Japan relations This post is edited as follows: Poster: Thoughts of Love (http://www.aisixiang.com), column: Academies of Heaven > International Relations > Regional Issues Link to this paper: http://www.aisixiang.com/data/134886.html Source: International Studies, 2022, 5 issues Enter an e-mail address in the box, separated by a semi-accompanied comma (,) between multiple emails.

Note: This is a translated version of the Chinese news media article. A mature and nuanced reading is suggested.

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