China’s commerce minister on Monday urged Japan to halt semiconductor export controls, calling it a “wrongdoing” that “seriously violates” international economic and trade rules. Wang Wentao spoke during a meeting with Japanese Trade Minister Yasutoshi Nishimura at the Detroit Asia-Pacific Economic Cooperation (APEC) conference.
According to a ministry statement, the two ministers agreed to promote practical cooperation in critical areas. They discussed the need to strengthen the US International Development Finance Corp to compete with Beijing’s China International Development Bank and expressed support for reforming the World Trade Organization.
Both countries are under pressure from the Trump administration to take steps to curb Chinese technology investment, as well as its unfair trade practices, such as stealing patents and imposing technology transfers. In addition, the United States and other countries have filed several lawsuits against the Chinese government, accusing it of violating the World Trade Organization’s anti-dumping law. At the same time, the European Union has launched an investigation into Beijing’s alleged violations of EU antitrust rules.
Washington has imposed new restrictions on chip exports to China to slow Beijing’s technological rise and deter Xi Jinping’s ambitions for an economy built on state-owned companies. These unprecedented export limits could affect a wide range of technology industries. The restrictions have angered some American companies, including chipmakers who warned investors they may miss out on billions in China revenue.
In response to the US measures, Japan and the Netherlands, which produce much of the advanced equipment used in the production of chips, announced that they would limit exports of some of their machines to China. In addition, Tokyo Electron, Europe’s biggest maker of chipmaking machinery, has said it would stop servicing Chinese customers. Furthermore, ASML Holding, which produces more advanced tools such as extreme ultraviolet lithography machines, is planning to cease operations in the country.
While the Netherlands and Japan’s moves will likely not impact Beijing as dramatically as the new US restrictions, they signal that the escalating battle over the country’s tech industry has spread to other major suppliers of critical technologies. If all countries follow suit, Beijing will face a significant loss of access to the most sophisticated kinds of chips.
A spokesperson for the Chinese Foreign Ministry slammed what she called US “economic coercion and bullying.” She said that the country would continue to fight against such tactics with the help of other nations to protect its core interests, maintain the stability of global industrial and supply chains, and promote free trade. “China will continue to promote cooperation with its ally, Japan, based on mutual respect and equality,” she added. A spokesperson for the US Commerce Department, pushing its allies to join the chip curbs against China, declined to comment. Instead, the spokesperson referred questions about the US policy to the department’s deputy assistant secretary for East Asian and Pacific affairs, Mark Feierstein. He did not respond to requests for comment from Reuters.
