What possible relation, one might ask, can spas, online food delivery services and local supermarkets bear to national security? Indeed, the Finance Ministry’s recent announcement that 2,102 such companies will be subject to security-related governmental regulation was greeted with bewilderment.
The confusion was caused by amendments to the foreign exchange and foreign trade law, which were designed to boost Japan’s national security by introducing economic safeguards around foreign investment. Investigating this series of debates illuminates the challenges faced by Japan in its quest to balance the interests of two apparently separate realms: national security and the economy.
The law in question, amended last November, regulates foreign exchange, trade and other transactions. Under the previous version, all foreign investors obtaining a share of 10 percent or more in companies operating in any of 155 designated sectors of industry had to be pre-approved by the government. The principal aim of the amendment was to enhance national security by ensuring that undesirable foreign investment was kept well away from security-related companies.