Japan Could Be a Model for America’s Escape from Chinese Dependence

By Ing. Andrej Kaprinay @ Shutterstock.com

America is dependent on China. Everywhere you look there are “Made in China” tags on your products. Under Donald Trump’s presidency, America began a process of moving away from China. The lack of availability of medical supplies at the kickoff of the COVID-19 pandemic shined a stark spotlight on America’s vast dependence on Chinese production. Another country looking to rapidly curb its dependence on China is Japan. Some of the moves Japan is planning could be examples for U.S. policymakers. David E. Adler writes in Foreign Policy:

The country’s new National Security Strategy, its first in nearly 10 years, contains an entire section on “Promoting Economic Security Policies to Achieve Autonomous Economic Prosperity.” It reads, in part:

“Japan will curb excessive dependence on specific countries, … promote capital reinforcement of private enterprises with critical goods and technologies, and strengthen the function of policy-based finance, in pursuit of protecting and nurturing critical goods.”

Note that China is not explicitly mentioned. This is not uncommon in discussions of economic security in Japan. Nonetheless the context is obvious.

Two major factors account for the rise of economic security in Japan, according to Akira Igata, a project lecturer at the University of Tokyo’s Research Center for Advanced Science and Technology: “One is China. The other factor is critical emerging technology like quantum computing or drones that can be used for civilian purposes but also military purposes.”

Igata, who also advises the Inter-Parliamentary Alliance on China on economic security, points out that the Japanese government’s intense focus on the topic has been progressing over the last few years, with implementation now accelerating. “The awakening began under the Abe administration three years ago,” Igata said, and was followed through on by the Suga administration. Yoshihide Suga’s government identified 16 different areas that Japan needed to work on to improve its economic security. These included diversifying supply chains, maintaining technological advantages, and strengthening telecommunications infrastructure. Many of these have been a focus of the current Kishida administration.

While its definition is sometimes nebulous, “economic security” is far more than a buzzword in Japan. It has led to the reorganization of the government, including the creation of a minister of economic security at the cabinet level; an economic division within the National Security Secretariat, which is responsible for planning and coordinating economic security policies; and dedicated economic security divisions in other major agencies or ministries, such as foreign affairs, defense, intelligence, and financial services. These divisions are charged with defensive actions such as tech controls, visa screening, cybersecurity, and more—but also with the enactment of industrial policies to grow critical new industries.

The culmination of Japan’s economic security policies has been the Economic Security Promotion Act (ESPA), which Japan’s parliament passed in May 2022 and will be phased in over the next two years. It has four core themes: securing supply chains of critical materials, nondisclosure of patents for security reasons, promoting the development of advanced technologies, and ensuring the security of infrastructure.

Economic security is clearly critical for Japan’s defense industry. “Economic security is welcomed by the Ministry of Defense,” said Ryo Sahashi, an associate professor at the University of Tokyo who is also a Japan scholar at the Wilson Center. “It will contribute to improving defense capabilities, and it may also help support the production base for defense equipment.”

Economic security also plays a central role in the Kishida government’s plans to revitalize Japan’s economy. Japan has now suffered through many “lost decades” with almost no economic growth. Shihoko Goto, the director for geoeconomics and Indo-Pacific enterprise and deputy director for the Asia Program at the Wilson Center, described Japan’s approach as “two-pronged.” “The bigger issue in economic security is not just about defense,” Goto said. “It’s also about economic growth in the future.”

Goto argues that for the United States, economic security is about technology competition with China, whereas in Japan, though the concept does include semiconductors, it is much wider. “In Japan, it is looking at the domestic economy more broadly. It is an opportunity to think about how to make Japan economically competitive and relevant,” Goto said.