China’s access to Japan’s coveted industrial-use goods – especially a critical chipmaking ingredient – may face hurdles if Tokyo imposes export restrictions in the event of a prolonged political dispute, though trade is holding steady for now, analysts and a trade organisation said.
Beijing’s response to Japanese Prime Minister Sanae Takaichi’s November 7 remarks about Taiwan has prompted some analysts to ask what cards Tokyo might play should the relationship deteriorate further.
Beijing’s latest move came on Wednesday, when it announced an anti-dumping investigation into a crucial chipmaking material from Japan. It had already banned seafood imports and restricted exports of dual-use commercial and military goods to recipients with links to the Japanese military.
Analysts highlighted Japan’s dominance in certain chemicals – especially photoresist, a light-sensitive material used to engrave chips – as a potential source of leverage against Beijing.
“Japan can stop exporting important goods such as semiconductor manufacturing equipment,” said Minoru Nogimori, senior economist for Asia at the Japan Research Institute. “Semiconductor manufacturing equipment and chemicals should be important cards.”
Four Japanese companies – JSR, Tokyo Ohka Kogyo, Shin-Etsu Chemical and Fujifilm Electronic Materials – controlled 72.5 per cent of the global photoresist market in 2021, ResearchInChina found. Chinese domestic substitution, meanwhile, is estimated at below 5 per cent, according to market research firm TrendForce.
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