Japanese lawmakers rush to bolster economic security Japanese lawmakers rush to bolster economic security
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Japanese lawmakers rush to bolster economic security

    NHK Senior Economic Commentator /
    NHK World Special Affairs Commentator
    Japanese lawmakers are pursuing an economic security bill with a new sense of urgency. It was created to address longer-term geopolitical risks stemming from the US-China rivalry, but is now also seen as a response to much more imminent supply chain threats amid Russia's invasion of Ukraine.

    The bill, submitted in February, was passed into law last week. It consists of four pillars to safeguard Japan's infrastructure, supply chains, patents and technology, and is set to take effect in phases.

    To protect the country's infrastructure from cyberattacks, companies in 14 industries – including energy, water supply, finance, and transportation – will be required to notify the government ahead of any equipment procurement or software updates.

    Japanese lawmakers passed legislation aimed at strengthening the country's economic security on May 11th.

    Secret patents

    A new system will allow for secret patents that cannot be shared outside Japan. The aim is to ensure that technological breakthroughs are not used overseas for military purposes.

    Subsidies are going to be offered to firms that can help strengthen essential supply chains. That includes semiconductors and pharmaceuticals. The government will also investigate sectors that rely too heavily on foreign products.

    The coronavirus pandemic has disrupted the supply of products essential to industry. The shortage of semiconductors was particularly severe, causing the suspension of automobile production.

    The law also allows the Japanese government to share information with, and offer financial support to, firms involved in the research and development of cutting-edge technology.

    Business heads wary

    Despite growing geopolitical risks, corporate Japan is wary of the changes that are set to be implemented over the next two years. Keidanren, or the Japan Business Federation, released a statement that welcomes strengthening economic security, but urges the government to keep interference to a minimum. The group is also calling for transparency.

    Lawmakers and government officials maintain that further measures, including a security clearance system, are needed to safeguard Japan. They claim that will help to select and certify individuals eligible to access classified materials concerning national and economic security.

    Biden to tout new framework

    Supply chain issues will be on the agenda when United States President Joe Biden visits Japan in the coming days for talks with Prime Minister Kishida Fumio. The leaders are expected to agree on deepening cooperation.

    US President Joe Biden is scheduled to have a summit meeting with Japanese Prime Minister Kishida Fumio in Tokyo on May 23rd. It will be Biden's first visit to Japan as President.

    They are also set to announce that the two countries will work together to protect cutting-edge technology, and ensure semiconductor stocks are available in an emergency.

    Regional economic security will be a top talking point at the US-Japan summit. Biden is promoting an initiative called the Indo-Pacific Economic Framework that covers a wide-reaching set of issues facing the region, including trade, supply chains, infrastructure, the environment, tax and governance.