Japan Must Tread Carefully in Lining Up With U.S. and Taiwan
The following is an excerpt from Asia Society Policy Institute's Center for China Analysis Johanna Costigan and Intern (Summer 2023) Lery Hiciano's article originally published in Nikkei Asia.
Japan in recent years has focused attention on building stronger ties with Taiwan and showing support for the U.S. in its holistic competition with China.
Tokyo has been in talks with the U.S. and the Netherlands about further restricting the export of advanced chipmaking equipment to China. Its readiness to join Washington's initiative shows Japan's buy-in to the conclusion of President Joe Biden's interim National Security Strategy that "in today's world, economic security is national security."
Both countries' focus on Taiwan, and parallel efforts to punish China, represent a securitization of foreign and economic policy. Given China's vast market, countering perceived economic security threats posed by Beijing will come with real economic costs.
Japanese companies such as Tokyo Electron and Nikon produce chipmaking equipment in high demand from downstream manufacturers in the semiconductor supply chain. China-based purchasers accounted for just over a quarter of Tokyo Electron's revenues during its last fiscal year. China is the overall top customer for Japanese chip equipment makers, taking a third of their output.
Even Sony, which has not been directly impacted by the chip-equipment restrictions, has transferred production out of China for some devices in anticipation of complications. Japanese officials are bracing for potential retaliatory tariffs once the government formally tightens its export control regime.