CHINESE Commerce Minister Wang Wentao urged Japan to halt semiconductor export controls, calling it a “wrongdoing” that “seriously violated” international economic and trade rules, a statement from his ministry said on Monday (May 29).

China’s latest condemnation of the export restrictions was made during Wang’s talks with Japanese Trade Minister Yasutoshi Nishimura on May 26 at the Asia-Pacific Economic Cooperation conference in Detroit.

Japan, along with the Netherlands, in January agreed to match US export controls that will limit the sale of some chip-making tools to China, and has placed restrictions on the export of 23 types of semiconductor manufacturing equipment to its neighbour.

The US imposed the restrictions last year, aiming to slow China’s work on supercomputers that can be used to develop nuclear weapons systems and artificial intelligence systems.

Japan has not singled out China in its statements about the export controls, saying only that it is fulfilling its duty to contribute to international peace and stability.

Monday’s statement from the Chinese commerce ministry also said, however, that China “is willing to work with Japan to promote practical cooperation in key economic and trade areas.”

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On Friday, Nishimura met with US Secretary of Commerce Gina Raimondo. The two agreed to deepen cooperation in the research and development of advanced chips and technologies such as quantum computing and artificial intelligence.

Wang also met Raimondo and US Trade Representative Katherine Tai while at the summit, criticising US economic and trade policies towards China, including the US-led Indo-Pacific Economic Framework that excludes China and aims to provide a US-centred alternative to its influence.

The US, Japan and other members of the Group of Seven (G7) advanced nations this month agreed to “de-risk” but not decouple from China, reducing their exposure to the world’s second-largest economy in everything from chips to minerals.

The de-risking narrative began to take hold in March, when European Union President Ursula von der Leyen gave a speech that, in part, outlined why she planned to travel to Beijing to meet President Xi Jinping.

“I believe it is neither viable, nor in Europe’s interest, to decouple from China,” she said. “We need to focus on de-risk, not decouple.”

That approach was widely seen as an attempt to cool US tensions with China, after an alleged Chinese spy balloon was shot down after crossing US airspace a month earlier. That prompted Secretary of State Antony Blinken to cancel a visit to Beijing, further souring diplomatic ties.

The Biden administration echoed her language soon after, with Treasury Secretary Janet Yellen saying in April that “we do not seek to decouple our economy from China’s.”

National Security Advisor Jake Sullivan argued the next week: “We are for de-risking and diversifying, not decoupling.” 

That rhetorical shift allowed some of the world’s wealthiest democracies to speak in a common voice on countering Chinese economic risks at the latest G7 summit. The leaders pledged in a final statement to achieve economic security by “diversifying and deepening partnerships and de-risking not de-coupling.” 

“What they are trying to realise is the partial decoupling,” said Zhou Xiaoming, a former deputy representative to China’s United Nations mission in Geneva, of the US and its allies’ de-risking strategy. 

“This means decoupling in areas of their choice that they believe are important for their national security,” he added, “as well as important for the effort to contain the rise of China.” REUTERS, BLOOMBERG