For Prime Minister Fumio Kishida, boosting economic security is one of the top items on his agenda, with the U.S.-China trade conflict as well as the coronavirus pandemic disrupting the global supply chains on which Japanese businesses rely.
“I will take measures to ensure we have the strategic technology and supplies, prevent technologies from flowing out of the country and create a self-sustaining economy,” Kishida said in a news conference Monday.
Tasked with the job is Takayuki Kobayashi, 46, a third-term Lower House lawmaker from the ruling Liberal Democratic Party who is well-versed in the topic and has taken on the newly established role of economic security minister.
“The cornerstones of national strategy are an economy that enriches people’s lives and security that protects the nation … (and) they are intermixing more and more nowadays,” Kobayashi said during his first news conference as minister on Tuesday. “The government needs to deal with the economy and security as one and promote this new policy area.”
One of the major tasks for Kobayashi, a Finance Ministry bureaucrat-turned-politician, is to create a new legal framework to facilitate the implementation of economic security policies — a pledge from Kishida’s campaign during the LDP leadership race last month.
Kobayashi said the government will aim to submit necessary bills to the Diet in next year’s ordinary session, which is slated to be convened in January. The new law will be designed to identify, protect and foster sensitive technologies, secure the integrity of fundamental infrastructure and strengthen supply chains, the new minister said.
While there’s no doubt that what has prompted Japan to look at the area of economic security is China’s growing economic influence, Kobayashi nonetheless said the government is not targeting a particular nation.
“The relationship with China is extremely important. Japan and China indeed have various issues, but I think a stable bilateral relationship is the key to prosperity for not only Sino-Japan relations but also for the regional and global communities,” Kobayashi said.
To achieve that, Kobayashi said it is critical that China follow international rules and fulfill its responsibility as the world’s second-biggest economy.
In addition, he said that while working closely with like-minded allies will help improve economic security, designing a structure to support economic self-sustainability is also crucial.
It is rare for a three-term lawmaker — considered a relatively junior politician in Japan — to be appointed to a ministerial post that requires coordinating with multiple ministries. But LDP Secretary-General Akira Amari said in a TV news program on Monday that the economic security minister “needs to be able to give instructions to all ministries” — a quality that Kobayashi is seen to have, given the role he has already held as an executive on the LDP’s committee in charge of economic security policy, which has seen him work on the topic over the past year.
In May, Kobayashi and other members of the LDP committee submitted a proposal to then-Prime Minister Yoshihide Suga suggesting the government create an economic security strategy and draft the legislation necessary to implement related measures.
Economic security has increasingly become a priority for Japan, with Suga dedicating an entire chapter of his growth strategy to the issue.
The strategy states that Japan will focus on reducing the risk of supply chain disruptions for some vital products, such as semiconductors, medical items, batteries and rare earths. It also pledges to prop up the competitiveness of the chip industry and sets out a plan to build more domestic data centers so sensitive information can be stored within the country.
Such disruptions have already had an impact on output by Japanese automakers, with factories in Vietnam and Malaysia faced shutdowns over the summer due to the pandemic.
As for semiconductors, the supply of which has remained severely constrained over the course of the COVID-19 pandemic, building more diverse and resilient supply chains is essential for Japanese manufacturers, said Kobayashi.
Other nations, especially the U.S. and China, are eager to secure chips and are ratcheting up investment. U.S. President Joe Biden has called for $50 billion to be spent subsidizing the U.S. chip industry.
Japan aims to persuade foreign semiconductor foundries, such as Taiwan Semiconductor Manufacturing Co., to create manufacturing bases in Japan by teaming up with domestic chipmakers. In addition, Kobayashi stressed the importance of reviving Japan’s own chip industry, which once dominated the world.
“I think the government needs to convey a specific message to encourage (companies) to revitalize the industry,” he said.
Kobayashi is also the minister in charge of science and technology as well as space policies.
Although the government intends to help facilitate research and development of some key innovations, such as quantum technology and artificial intelligence, that are already the subject of wider research, he suggested that Japan also look for unique areas in which its strengths can bloom by picturing what society could look like over the next five to 10 years.
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