On January 15, Director General for Economic Supply Chain Bureau at the Ministry of Economy and Finance, Woong-Ki SOHN, convened a joint interagency meeting to review the potential domestic impact of China’s tightened export controls on Japan, with a focus on economic security items* highly dependent on Japan.
* “Items that are highly dependent on imports from certain foreign countries or have a significant impact on the domestic economy.” (Article 2 of the Framework Act on Supply Chain Stabilization for Economic Security)
Held in response to China’s January 6 announcement of tightened export controls on dual-use items to Japan, the meeting brought together the Ministry of Trade, Industry and Resources, the Ministry of Climate, Energy and Environment, the Ministry of Food and Drug Safety, and the Defense Acquisition Program Administration to collectively review item-specific supply conditions and potential supply chain risks.
The review found no notable developments to date, as some items can be sourced from countries other than Japan or are not directly impacted by China’s export controls.
However, items for which Japan is highly dependent on Chinese raw materials were assessed to pose potential risks to domestic supply chains if export controls are prolonged, underscoring the need for close monitoring and careful supply management.
Accordingly, close coordination with relevant ministries will be maintained to continuously monitor supply and demand conditions for the relevant items, while efforts to enhance supply chain stability – including the diversification of import sources and the expansion of domestic production – will be sustained.
Director General SOHN noted that supply chains are not always readily apparent under normal circumstances but can have far-reaching impacts across industries once disruptions occur, highlighting the importance of advance checks and preparedness. He added that, building on this review, the government will proactively manage potential risks and establish a robust and comprehensive response system in close coordination with relevant ministries.
He further emphasized that, if necessary, the Supply Chain Resilience Fund will be actively utilized to provide policy financing at interest rates capped at the level of government bond yields, and that an Integrated Supply Chain Early Warning System will be launched within the year to enable the early detection of supply-demand disruptions and timely responses.
Please refer to the attached files.
