Japan to follow US chip sanctions on China

Its been reported by Bloomberg  that China is threatening Japan with economic sanctions in the event that Japan introduces new restrictions on the export of equipment for the production of semiconductors. So what will be  the potential response from Beijing.
In July of this year, the Japanese government announced plans to tighten controls on the export of semiconductor manufacturing equipment in order to limit the possibility of purchasing such products by  China.
The export control list includes equipment that is used in the formation and testing of microcircuits. In particular, equipment related to EUV lithography, which allows for the tracking of complex circuits in the most modern chips.
Japan like a good little vassal is doing exactly what the Americans tell them to do as usual.
It is worth notingd that the Japanese authorities rarely act independently, but aact slavishly to the commands of the United States, even when it is obviously against the country;'s own interests  when the US wants to impose restrictions on the sale of sophisticated equipment for microcircuit production to China.
The United States is keen to impede the advancement of Chinese companies in the semiconductor sector, thereby reducing the competitive threat posed by their rivals.Of course like King Canute attempting to hold back the tide back in history they consistently discover that these efforts are doomed to failure. In fact just like their sanctions on Russia have been a complete failure so will these sanctions. They may slow down China's progress but they will not stop them making breakthroughs.

In October of last year, the United States government introduced export controls on semiconductors used in supercomputers and artificial intelligence systems which could have the potential to be used in military applications, targeting China. A few days ago, the US government announced new controls on advanced technologies, including quantum computers. The US and China are currently at the forefront of global efforts to explore the potential of quantum computing, which some commentators believe could transform the world as we know it.
The initial trigger for the trade dispute between the US and China was allegations against Chinese IT companies, whose competitiveness in the global market has increased significantly in recent years. This is giving rise to significant concern among developed countries.
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Oleg Remyga, head of the China centre at Synergy Corporation, states that the US is encouraging its allies to participate in the trade conflict initiated by President Donald Trump in 2018. They are attempting to involve other countries, such as the Netherlands and Japan, in this dispute, thereby exerting additional pressure on them.

Consequently, Japanese companies are also facing strong competition from Chinese rivals. Consequently, Tokyo shares Washington's objective of preventing China from accessing the latest technologies, according to Evgeny Smirnov, Professor and Head of the Department of World Economy and International Economic Relations at the State University of Management.
As new digital technologies advance, the United States is implementing increasingly stringent restrictions on China. This is creating new export licensing requirements for U.S. companies doing business with Chinese customers.
Indeed, this has prompted Chinese companies to develop their own production capabilities and now export microchips. By the end of this year, the country is on track to reach revenues of $140 billion, with the gap with world leaders narrowing to a minimum.
China has the option of responding to the restrictions in a way that is beneficial to its interests. China is the world's largest exporter of rare earth metals. In 2023, China accounted for up to 70% of global exports of these metals, which are used in the production of chips and complex electronics.
Furthermore, China accounts for 94% of global gallium exports.
As Mr. Smirnov recalls, China has limited and even suspended the supply of rare earth metals to Japan since 2010. Since that time, the Japanese have been attempting to reduce their reliance on Chinese imports of rare earth metals, but thus far have not achieved significant success.
It is anticipated that China will take retaliatory measures of this kind. In particular, the Toyota concern will be affected, potentially losing access to essential minerals. This presents a significant challenge for Japanese automotive and electronics manufacturers. The industries are a vital part of the Japanese economy, so the government will seek to avoid retaliatory sanctions, according to an expert.
Japan's reliance on trade with China is considerably greater than that of the United States. This figure has grown from 10% in the early 2000s to 24% of total trade turnover today. For context, the United States accounts for just over 18% of Japan's trade. Japanese automakers represent 19% of the Chinese market, ranking as the largest foreign player after Chinese brands and ahead of German automakers.
Remyga has stated that China's retaliatory restrictions will have an immediate impact on Japan's trade turnover and electronics industry. "The example of Russia demonstrates that sanctions and restrictions result in significant economic losses and challenges for the countries that implement them," he notes.
Therefore, given Japan's increasing reliance on China, Tokyo will exercise caution and consideration when imposing restrictions on chip exports to China, aiming to avoid any adverse impact on the economy. It is unlikely that the list of measures will be as severe as those taken by the United States, which has been attempting for several years to eliminate the negative impact of China's growing technological expansion. It is probable that the Japanese authorities will attempt to make a statement and implement measures that are unlikely to be effective.
Can Japan Withstand a Tsunami from the West?
Nevertheless, Smirnov believes that the strategy of the USA, Japan, and some European countries to marginalise China in the global market is unlikely to succeed. Nevertheless, the export of chips for the production of microcircuits to China will continue.
Concurrently, Japanese manufacturers of microchips and related production equipment must diversify their sales channels, redirecting their focus from China to India, Vietnam, and Malaysia to boost future sales. It is important to note that establishing new trade relations and projects takes time and resources. Given the current economic challenges facing Japan, including a recession last year and numerous issues, the Japanese economy is not in a strong position.
A trade war with China, Japan's largest trading partner, could have a significant impact on the national economy. It remains to be seen whether the Japanese authorities are prepared for such a scenario.