US and Japan begin economic talks to counter China, Russia

Japanese media reported that an economic “two plus two” ministerial meeting in Washington is expected to agree to joint research on next-generation semiconductors to establish a safe source of key components.

US Secretary of State Anthony Blinken and Commerce Secretary Gina Raimondo and Japanese Foreign Secretary Yoshimasa Hayashi and Commerce Secretary Koichi Hagiuda chaired the meeting.

“As the world’s first and third largest economies, it is critical that we work together to preserve a rules-based economic order in which all countries can participate, compete and thrive,” Blinken said at the opening session.

Blinken said recent world events, including Covid-19 and the war in Ukraine, highlight the fragility of critical supply chains.

“The Chinese people are forced by the Republic of China’s coercive and retaliatory economic practices to make choices that threaten the nation’s security, their intellectual property and their economic freedom,” he said.

Semiconductors

Japan’s Hayashi noted that Russia’s invasion of Ukraine was a serious challenge to the international order – clearly referring to China, although he did not mention that country directly – “to use economic influence in an unfair and opaque manner… to realize strategic interests and change the existing international order”.

“To effectively address this, it is necessary to discuss foreign policy and economic policy as a unit, rather than discussing foreign policy and economic policy separately,” Hayashi said.

Japanese newspaper Nikkei Shimbun reported that a semiconductor development center will be established in Japan by the end of this year to research 2-nanometer semiconductor chips.

It will include a prototype product line and start producing semiconductors by 2025, the report said, adding that the agreement to establish the center will be released after the meeting.

Taiwan now produces semiconductors of less than 10 nanometers used in products such as smart phones, and there are concerns about stability of supply in case of problems with Taiwan and China, which views the island as a traitor. Considers the province involved.

Friday’s meeting comes at a time of heightened tensions over Taiwan.

In a phone call with US President Joe Biden on Thursday, Chinese President Xi Jinping warned against playing with fire over Taiwan, as US House Speaker Nancy Pelosi highlighted Beijing’s concerns over a possible trip to the Chinese-claimed island.

The warning comes after the US House of Representatives passed sweeping legislation on Thursday to subsidize the domestic semiconductor industry in competition with Chinese and other foreign manufacturers.