Miscellaneous News

Therefore, this should indeed be seen as a signal of economic decoupling between China and Japan. Japanese components were once a vital part of China's high-end manufacturing supply chain, but Japan will now be excluded from China's supply chain going forward. China, meanwhile, will lose some of its interests in the Japanese market.

Nevermore said:

Therefore, this should indeed be seen as a signal of economic decoupling between China and Japan. Japanese components were once a vital part of China's high-end manufacturing supply chain, but Japan will now be excluded from China's supply chain going forward. China, meanwhile, will lose some of its interests in the Japanese market.

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Japan has already been consumed by economic stagnation for years even with Chinese industrial cooperation and tourism. Without Chinese industrial cooperation and tourism, they are simply going to crash.

The meme is the west thinks Japan is going to build an alternative RE supply chain outside of China for them. But the reality is China is going to build an alternative of the entire Japanese supply chain in China and then delete Japan from the global supply chain.

U.S. Department of Justice admitted that Cartel de los Soles does not exist, it was fabricated to allow Trump to bypass Congress.

Trump: "You're talking to me about the law? LMAO!"

plawolf said:

The meme is the west thinks Japan is going to build an alternative RE supply chain outside of China for them. But the reality is China is going to build an alternative of the entire Japanese supply chain in China and then delete Japan from the global supply chain.

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Just like Zuckerberg, the American hail Mary is to throw east Asians at the problem until it gets solved. Just like with banking on South Korea solving their ship building problem. Unlike Zuckerberg, the Americans don't seem to realize that the Japanese have become the least capable of the east Asians over the last ten years. Ironically in large part due to successful American attempts to neuter them in the 80s onward.

Randomuser said:

@tokenanalyst

Can we double check this?-Photoresist

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jli88 said:

It will be hard to replace them, and lead to atleast a short to medium term disruption:

1. Photoresist
2. Tokyo Electron Lithography machines
3. Precision bearings, specially ones already designed into chinese products
4. MLCC Murata, both low-end and high-end
5. Industrial equipment - robotics, robot components, etc.

I am aware that there are Chinese competitors in all fields, but even if their products were equally performing (which they are not in many fields), even then it will take time.

Apart from that Japan is a big customer for Chinese goods, a big market.


Currently none, both need each other. But if China has alternatives for Japanese suppliers, so does Japan have alternatives for Chinese suppliers.




That's literally what I just wrote, will be very selectively applied to MIC only, and hence not in line with what everyone else is saying.

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-photoresist.
Probably the only thing in this list that Japan retains an edge.

-Tokyo Electron Lithography machines
Tokyo Electron do not make Lithography machines, their main market is Etching machines and Coating machines, AMEC and Naura are gaining a competitive edge in that area and in Coating Machines KingSemi and others are already making competitive tools.
In lithography China has always being more dependent on ASML than Nikon.

-Precision bearings, specially ones already designed into chinese products
Chinese companies have already have an edge in that area and they are moving faster,

-MLCC Murata, both low-end and high-end
Chinese companies are growing double digits in that area, also Murata is not the number one MLCC provider, SK SamSung is.

-Industrial equipment - robotics, robot components, etc.
Nope, China industrial robots are now mostly produced internally and the rest come from Europe.

Dozens of oil tankers from BRICS members Brazil, Russia, China, India, plus Mexico and others are BREAKING THE AMERICAN BLOCKADE and loading Venezuelan oil.

plawolf said:

This is why China’s moves will be phased in slowly to minimise blowback.

However, the fact that the opening move is rare earths is actually very telling about how serious China is on this. This move is meant to convey a clear and unambiguous message about both how seriously China takes this matter, and how strong its resolve is.

Speaking of resolve, as I mentioned before, those moves will not be made in isolation, and you can absolutely bet that China already have a comprehensive list of items that it imports from Japan which need domestic alternatives and that colossal resources will be poured into building up domestic suppliers to catch up both in terms of quality, but also boost production capacity to be able to fully replace Japanese imports in terms of total volume as well.

Indeed, if the list of such products are small enough, China may well be expanding this domestic replacement drive to cover critical components Japan exports to the rest of the world, to use Chinese alternatives as both a carrot to reduce the market and industrial disruption of more forcefully Chinese moves further down the line.

The real kicker is that once a decision of such magnitude and significance has been made, there is basically no going back. This means that while China has set a total countdown of 3 years before it will make a big call on whether or not to actually move against Japan militarily, the time Japan has left to avert an economic tsunami of existential proportions to whole swaths of its remaining industries is actually far far shorter, if not outright past the point of no return. 3 years is when Chinese domestic alternatives are meant to fully replace Japanese imports, but working back, real financial and industrial decisions need to be made now and massive amounts of capital and resources spent soon to achieve those goals.

Once those investment decisions are made, Chinese companies are going to eat their Japanese competitors alive even if the Japanese government later reversed course.

In many respects, the real damage has already been done, and now it’s just a case of waiting to reap the whirlwind.

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Japan already has US induced export controls against China, that include many items that are not even dual use and commercial companies. China export control list is pretty small, most of the items are clearly for dual use and target more military contractors.

jli88 said:

It will be hard to replace them, and lead to atleast a short to medium term disruption:

1. Photoresist
2. Tokyo Electron Lithography machines
3. Precision bearings, specially ones already designed into chinese products
4. MLCC Murata, both low-end and high-end
5. Industrial equipment - robotics, robot components, etc.

I am aware that there are Chinese competitors in all fields, but even if their products were equally performing (which they are not in many fields), even then it will take time.

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1. There are are Chinese competitors. They just need 1-2 years to ramp up production.
2. There is a 3? year stockpile of ASML DUV lithography machines, which are better than the TEL ones. Chinese DUV machines are also in fabs now
3. Give it 1-3 years for precision bearings
4. Another 1-3 years for Chinese competitors to ramp up? Also Samsung is an alternative
5. China accounts for the majority of global robot demand and also production of those robots. So give it 3 years to completely phase out Japanese component imports.

jli88 said:

Apart from that Japan is a big customer for Chinese goods, a big market.


Currently none, both need each other. But if China has alternatives for Japanese suppliers, so does Japan have alternatives for Chinese suppliers.

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No, Japan doesn't have alternatives to many Chinese suppliers. For example, there are heavy rare earths where the only producer in the world is a single plant in China. And if the Japanese automobile industry is cut off from Chinese EV suppliers, in the medium-term, it is going to result in the bankruptcy of the Japanese auto industry.

jli88 said:

That's literally what I just wrote, will be very selectively applied to MIC only, and hence not in line with what everyone else is saying.

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The licensing regime may be applied selectively to the MIC, but the screening process and quotas will drag in every Japanese company that uses the same stuff. Japanese companies won't be able to expand.

Sources: China is considering tightening export license reviews for rare earth exports to Japan

According to China Daily, reliable sources indicate that in light of Japan's recent misconduct, the Chinese government is considering targeted tightening of export license reviews for medium and heavy rare earth items subject to the “April 4, 2025” export control list.
On April 4, 2025, pursuant to the Export Control Law of the People's Republic of China and other relevant laws and regulations, the Ministry of Commerce, in conjunction with the General Administration of Customs, issued an announcement regarding the implementation of export control measures on seven categories of medium-to-heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These measures took effect on the date of issuance.
At a regular press conference on December 4 last year, Ministry of Commerce spokesperson He Yadong stated that Japanese Prime Minister Sanae Takaichi's blatant remarks on Taiwan issues had seriously undermined the political foundation of China-Japan relations, and that the Japanese side bore an unshirkable responsibility for this.
He Yadong stressed that China has repeatedly made clear its solemn position, urging Japan to immediately correct its erroneous words and actions, demonstrate its commitment to China through concrete actions, and create conditions for normal economic and trade cooperation between the two countries. Should Japan persist in its course, China will take necessary measures, and Japan will bear all consequences.
An assessment by Japan's Nomura Research Institute indicates that Japan relies almost entirely on China for supplies of heavy rare earth elements such as dysprosium and terbium, which are used in neodymium magnets for electric vehicle drive motors. Should these supplies be restricted, Japan's economy would face significant disruption.

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Of course, Japan's dependence on Chinese rare earths has already declined to around 60% (considering the relatively small scale of Japan's manufacturing sector). However, imposing a comprehensive rare earth ban on Japan within the next six months would deal a severe blow to the country.
Some of the previous translations were ambiguous, so I made a few minor adjustments.