Japanese Prime Minister Sanae Takaichi has led her Liberal Democratic Party (LDP) to a sweeping victory in a snap election over the weekend, securing 316 seats and a two-thirds majority in the Japanese House of Representatives. While major foreign media outlets have rushed to report on the landslide, Chinese state media has remained eerily silent, reflecting the reality of economic sanctions failing to achieve their intended political outcome.
In November last year, Takaichi’s statements on “a Taiwan contingency” elicited a multipronged response from Beijing in which it advised its citizens against traveling to Japan, barred aquatic product imports, deplatformed Japanese artists and weaponized rare earth supply chains. The approach has not only failed to undercut support for Takaichi, but served to highlight the importance of supply chain security for Japanese society as a whole.
According to a Feb. 6 report from Japan’s Kyodo news agency, after China tightened export controls on “dual-use” items with potential military uses at the start of the year, it has now relaxed restrictions for several rare earth exports. However, trade between the two nations continues to experience customs delays. This curious transformation could be interpreted as a gesture of goodwill from Beijing for Takaichi’s government in the run-up to the election, and an attempt to open up room for dialogue. Yet, by keeping supply flowing even as companies are made acutely aware of supply chain precarity, Beijing retains leverage for ongoing pressure.
Japan is far from inexperienced when it comes to these issues. Since China placed restrictions on rare earth exports to Japan following a 2010 boat collision incident near the disputed Diaoyutai Islands (釣魚台) — also known as the Senkaku Islands in Japan — Tokyo has been steadily reorganizing supply chains over the past 15 years. Beyond investing in Australian mines and French refineries, and developing alternative technologies such as amorphous alloys, 2022 saw the implementation of the Act on the Promotion of Ensuring National Security through Integrated Implementation of Economic Measures, together amounting to a multifaceted defense strategy of diversification, technological autonomy and institutional protections.
With the government taking on investment risk through its administration of the Japanese Organization for Metals and Energy Security and the private sector focusing on operational efficiency, reliance on China for metallic rare earths has dropped from 90 to 60 percent. However, challenges persist, with China expanding its rare earth export controls to include gallium, germanium, graphite and hundreds of other key materials late last year. It has further prohibited re-exports via third countries in an assertion of long-arm jurisdiction, presenting a major challenge that Tokyo urgently needs to overcome.
Japan has shown that if businesses and the government can offer alternative solutions and build strategic resilience, vulnerabilities to overreliance in supply chains can be significantly reduced. For Taiwan, there are three key takeaways.
First, supply chain reorganization is a long-term commitment. Requiring upwards of 10 years, it must establish dedicated institutions, and integrate resources from industry, the government and academia for strategic investment.
Second, technological advancements are the key to breaking away from overreliance. Taiwan should accelerate technological development programs for alternative materials, particularly the rare earth compounds and specialty gases required in semiconductor manufacturing.
Finally, regional cooperation is an important component of risk distribution. Working with like-minded emerging supply chain partners for refinement processes should be a priority. Supply chain security must be integrated into broader national strategic thinking; only when there is strategic autonomy can long-term industrial competitiveness and economic security be ensured.
Chiang Tai-chin is the director of the Japan Center at the Chung-Hua Institution for Economic Research.
Translated by Gilda Knox Streader
KMT Chairwoman Cheng Li-wun’s (鄭麗文) recent visit to Beijing and her upcoming visit to Washington will serve as a high-level test of her diplomatic mettle. In Beijing, Cheng was received with symbolic gestures, a warm reception, and high-level access. In Washington, she will receive far less pomp and far sharper questions about the KMT’s vision for the future of Taiwan. Her challenge will be to persuade Washington that the KMT’s engagement with China can coexist with strong deterrence. Cheng’s April 7-12 visit to mainland China coincided with an intense period of conflict in Iran. Despite the strategic significance of Cheng’s trip,
The closure of the Strait of Hormuz has sent the vast Asian chemicals industry into a tailspin. Deprived of the likes of Qatari natural gas and Saudi Arabian oil, the region’s fertilizer and plastics plants are slowing production or even shutting down. Everywhere except China, that is. In petrochemicals, China is unique. As well as a traditional industry that uses oil and gas as feedstock, it has parallel output that relies on its abundant domestic coal. Unsurprisingly, India and other regional powers want to copy and paste the Chinese method. This would not be easy — or climate friendly. The
Indonesian President Prabowo Subianto says he knows how to fix the problems facing Indonesia. Yet his economic mismanagement and authoritarian tendencies are steering the nation toward a familiar mix of currency instability and political chaos. The world’s fourth-most populous nation risks reversing the hard-won democratic and business reforms that came after the Asian Financial Crisis in 1997. At that time, the rupiah collapsed and the political upheaval that followed forced former president Haji Mohamed Suharto from power. Prabowo’s administration is ignoring similar warning signs. That disconnect was apparent in a national address on Wednesday, when Prabowo projected the swagger that has
“Of course you can choose not to be Taiwanese, just do not stay here,” chairwoman of Taipei 101 operator Taipei Financial Center Corp Janet Chia (賈永婕) said in an online interview with local entertainer Tai Chih-yuan (邰智源), triggering intense discussion on social media, with politicians across party lines weighing in. In the interview, which was aired on May 14, Chia and Tai’s discussion over a meal in Taipei 101 covered Chia’s career change from entertainer to chairwoman and US climber Alex Honnold’s free solo climb up the Taipei 101 building. During the interview, Chia said, “Being on this land, we
RSS