By Mayumi Negishi
bloomberg

Feb 1, 2025

Japan expanded its export controls to include cutting-edge chips and quantum computer-related technology, a move China warned could have a negative impact on trade between the two countries.

The central government is expanding its list of export-controlled items to include advanced chips, lithography equipment and cryocoolers needed for the manufacture of quantum computers, according to draft revisions to the foreign exchange law.

Companies will need licenses to export the items to prevent their use in weapons or their development, economy ministry officials have said. Advanced chips could be diverted to increase the computational capabilities of precision-guided weapons, while quantum computers could be used to break encryption.

The new curbs are scheduled to come into effect at the end of May.

The move comes as the U.S. looks to close loopholes to its restrictions on sales of chips used for artificial intelligence applications amid growing alarm in Washington over the possible re-export of Nvidia semiconductors to China.

Separately, Tokyo is also strengthening its exports controls by adding to its entity list. The ministry included 42 new entities worldwide to its list of foreign companies and organizations that would be subject to export oversight on any dual-use items. The additions come into effect on Feb. 5, it said. A total of around 110 Chinese companies, research institutions and other entities are on the list.

China responded to the new controls by saying they could impact the security and stability of supply chains and affect normal commercial exchanges between enterprises. Beijing hopes Japan will make sure the measures don’t hinder the economic and trade development between the two countries, according a statement from the Ministry of Commerce in Beijing.

China has embarked on a diplomatic charm offensive with U.S. allies and partners in recent months. Some foreign policy analysts link the shift to a desire by China for stability considering the change of leadership in the U.S.

Chinese Foreign Minister Wang Yi has informally invited Prime Minister Shigeru Ishiba to attend the opening ceremony of the Asian Winter Games in the northeastern Chinese city of Harbin in early February, Kyodo News reported Friday.

Diplomatic sources cited in the report played down the likelihood of the trip happening, however, pointing out that the Japanese government is trying to organize a meeting between Ishiba and U.S. President Donald Trump at around the same time. Ishiba is expected to meet with Trump on Feb. 7.

Foreign Minister Takeshi Iwaya met Wang and Premier Li Qiang in Beijing late last year. The two sides agreed to introduce more measures to promote tourism between the countries, the Chinese government said in a statement, and also affirmed the importance of deepening communication on security, according to Japan’s statement.

Japanese companies have benefited greatly from the increased demand from China in recent years for machines to make semiconductors, with sales hitting a record last year. It’s unclear how the tighter controls will affect that, but the administration of former U.S. President Joe Biden had been pushing Japan and the Netherlands for years to make it more difficult to sell these high-tech goods to Chinese companies.