Government Inspects Supply and Demand of Key Economic Security Items Highly Dependent on Japan

"Utilizing the Supply Chain Stabilization Fund When Necessary"

The government has begun monitoring the supply and demand of key economic security items with high dependence on Japan, in order to assess the domestic impact of China's strengthened export controls on Japan.

Son Ungki, Director General for Economic Supply Chain Policy at the Ministry of Finance and Economy, held a joint inspection meeting with relevant ministries on January 15 for this purpose.

Ministry of Finance and Economy Building. Photo by Yonhap News

This meeting was convened in response to the Chinese Ministry of Commerce's announcement on January 6 regarding the strengthening of export controls on dual-use items to Japan. The Ministry of Trade, Industry and Energy, the Ministry of Environment, the Ministry of Food and Drug Safety, and the Defense Acquisition Program Administration attended the meeting to comprehensively review the supply and demand status of each item and potential supply chain risks.

As a result of the inspection, it was found that for some items, imports can be substituted from countries other than Japan, or they are not directly affected by China's export controls. The government assessed that, as of now, there are no unusual trends.

However, for items where Japan is highly dependent on Chinese raw materials, there is a possibility that prolonged export controls could impact domestic supply chains, making close supply and demand management necessary.

The government plans to continue closely monitoring the supply and demand trends of these items in cooperation with relevant ministries. Efforts to enhance supply chain stability, such as diversifying import sources and expanding domestic production, will also continue.

Director General Son stated, "If necessary, we will actively utilize the Supply Chain Stabilization Fund to provide policy finance at the maximum level of government bond interest rates," adding, "Within this year, we will establish an early warning system for supply chains to detect and respond to signs of supply and demand disruptions in advance."