China Criticizes Japan’s Export Controls on Chip-making Equipment

On May 24, 2023, Chinese officials and experts criticized Japan’s export controls on 23 types of chip-making equipment. The move aligns Japan’s trade rules on technology with the push by the United States to curb China’s ability to make advanced chips. These restrictions will undoubtedly hurt the global semiconductor industry and backfire on Japan’s chip sector.

Abuse of Export Control Measures

A spokesperson for the Ministry of Commerce said in a statement that the Japanese move is an abuse of export control measures and a serious departure from free trade and international economic and trade rules. China firmly opposes Japan’s export controls and reserves the right to take measures to resolutely safeguard its legitimate rights and interests.

Reasonable Demands Ignored

While Japan sought public opinion on the export controls in recent months, many Chinese organizations such as the China Semiconductor Industry Association and Japanese industry groups and enterprises submitted comments to the Japanese government. However, the Japanese government did not respond to the reasonable demands of the industry, the spokesperson said. The curbs will seriously harm the interests of Chinese and Japanese enterprises, seriously damage the economic and trade cooperation relationship between China and Japan, and disrupt the global semiconductor industry.

Cooperation on Semiconductors

Zhang Wei, vice-president of the Chinese Academy of International Trade and Economic Cooperation, said that cooperation on semiconductors is one of the most representative examples of mutual benefits from China-Japan economic and trade ties. The Chinese mainland is the largest export destination for Japanese semiconductor equipment manufacturers. In 2022, such exports from Japan to the mainland hit 820 billion yen ($5.9 billion) — exceeding 30 percent of Japan’s total chip-making equipment exports and almost double the amount of US exports in the same sector to the mainland.

Contrary to Market Rules

Zhang Wei added that Japan’s export control measures are contrary to market rules and will cause shocks to industrial development. For major Japanese chip equipment makers, the mainland market contributes to about 20 to 30 percent of their sales revenue. Amid the export control measures, Japanese company Tokyo Electron expected its annual revenue to fall 23 percent year-on-year, the Financial Times reported.

No Reason for National Security Exceptions

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said, “China and Japan have close economic and trade ties, which indicates that there is no state of emergency between the two countries in terms of international relations, and there is no reason for Japan to invoke national security exceptions to defend its export control measures. The chip manufacturing equipment that Japan now exports to China is not in any way related to national security. This is a purely commercial activity as part of global production and trade.”

Sales Constrained by US Government

Wei Shaojun, a professor of integrated circuits at Tsinghua University, said sales in the past year of US semiconductor equipment companies in the Chinese market have been constrained by the US government and suffered heavy losses. “As Japan restricted its exports of advanced semiconductor equipment to the Chinese mainland, Japanese companies are also bound to suffer losses,” Wei said.

Conclusion

In conclusion, China firmly opposes Japan’s export controls on chip-making equipment, stating that it is an abuse of export control measures and a serious departure from free trade and international economic and trade rules. The curbs will seriously harm the interests of Chinese and Japanese enterprises, seriously damage the economic and trade cooperation relationship between China and Japan, and disrupt the global semiconductor industry.

1. Trade War
2. Semiconductor Industry
3. Economic Sanctions
4. Global Supply Chain
5. Technological Innovation

News Source : Asia News Network
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