Future World Order: Industrial Policies / As China Hunts For High-Tech Secrets, Lack of Security Clearance

The Yomiuri Shimbun

7:00 JST, November 6, 2023

This is the fifth and final installment of a series that reports on security-focused, public-private industrial policies.

Advanced and highly sensitive technologies possessed by Japanese companies are being eyed like a tiger’s prey by China and other countries with the aim of converting them to military use.

Several years ago, a Japanese company engaged in the lithium-ion battery business in China was going through administrative procedures for its local subsidiary when it was forced by Chinese regulators to disclose sensitive data related to component manufacturing “for the purpose of an antimonopoly law screening.”

Such a request should have been unnecessary per se, and the company defied it. But after repeated demands from the authorities, the company ended up providing the information in order to continue its business.

Lithium-ion batteries used in personal computers and other products can be converted to military use. “China likely targeted Japan because of its technological superiority,” a Japanese government source said.

Japanese technology makes it way overseas over various routes. It can be via Chinese exchange students, or perhaps Japanese researchers being recruited by China.

The Japan Counter Intelligence Association investigates many cases regarding industrial secrets, both private and governmental. Last summer, representative director Yu Inamura was consulted by a defense contractor that said it suspected a former employee who left the company of taking corporate information with them.

The association’s investigation found that the employee had given blueprints of defense equipment to a Japanese acquaintance who, through a Chinese acquaintance, had a connection with an influential member of the Chinese Communist Party. It is possible that the blueprints ended up in the hands of the CCP.

In line with remarkable innovation in sensitive technologies, it is essential to be vigilant against data leaks, and joint development with reliable domestic and foreign companies is increasingly vital. A “security clearance system” would ensure such trust in terms of economic security, but the lack of such a structure in Japan has put Japanese companies at a great disadvantage.

Under a clearance system, the government grants civil servants and employees of private companies access to information designated as important. It is regarded as a “ticket to participate in joint development overseas” that has been adopted by the Group of Seven industrialized countries excluding Japan.

Many overseas academic conferences on dual-use technology restrict participation to those with security clearances, which leaves Japanese researchers without access to the latest technology.

One major Japanese manufacturer spent about four years negotiating a joint development project with European and U.S. companies, but the talks broke down. Because of the lack of a clearance system in Japan, the Japanese company was not authorized to obtain sensitive data from its counterparts and could not share information on an equal footing.

“Japanese companies will lose many business opportunities if a system is not established soon,” a company executive said, sounding the alarm.

China Likely Using Japan Tech to Develop Hypersonic Weapons

China has been developing a strategy to bolster its military capabilities through the use of nonmilitary human resources. As part of its plans, Beijing routinely recalls Japan-based Chinese research scientists.

The relocation of Chinese scientists involved with hypersonic weapons has recently attracted the attention of the Japanese government, which views such moves as a possible example of Japanese technologies being used overseas to develop cutting-edge arms.

Hypersonic weapons, which travel at speeds of Mach 5 or faster, are said to be difficult for the missile defense networks of the Self-Defense Forces and the U.S. military to intercept. Such armaments have the potential to fundamentally change Japan’s security situation.

In May 2021, the Public Security Intelligence Agency submitted a report to relevant government ministers regarding Chinese scientists who had studied at Japanese universities and were active in the field of hypersonic technologies.

The PSIA investigated the movements of Chinese scientists involved with space- and aeronautics-related tech, including such individuals as an associate professor at a Japanese national university and a scientist at a national research and development agency.

According to a source close to the PSIA, the agency investigated nine Chinese scientists who had conducted research potentially applicable to hypersonic weapons, including scramjet engines and combustion technology. One such person had served as an associate professor at Tohoku University in 1994 and had ties to a research institute affiliated with a Chinese arms company.

The scientist, who received grants from Japan’s Grants-in-Aid for Scientific Research program, visited a facility affiliated with the Japan Aerospace Exploration Agency in Miyagi Prefecture. After returning to China in around 2000, the scientist joined a research institute of the Chinese Academy of Sciences that partners with such organizations as a military research institute and opened a hypersonic experimental facility in 2017 that bears a strong resemblance to a facility of the Japan Aerospace Exploration Agency (JAXA).

According to some media reports, China has already deployed its Dongfeng medium-range ballistic missiles, which are capable of carrying hypersonic gliders. It also has been pointed out that China leads the United States in terms of utilizing technologies that were originally developed by Japan.

The PSIA report additionally noted that China has been developing human resources in the field of sensitive technologies based on a long-term perspective. For more than two decades, Beijing has been dispatching hypersonic weapon-savvy students and scientists to Japanese national universities, building up a network of alumni in the field.

Such moves may have served as model for China’s “Thousand Talents Program,” which launched in 2008 in an effort to attract top scientists from abroad.

According to the report, an expert in experimental technology at a Japanese national university was asked by a leading figure in the Chinese hypersonic weapon sphere to return to the country in the 1990s. The two people subsequently worked together in the field.

Colleagues and subordinates of the scientist in question later came to Japan to study propulsion systems and combustion technology at national universities. One such individual belonged to a Japanese university for more than 20 years and helped facilitate the acceptance of many Chinese students after becoming a naturalized Japanese citizen.

It has also been confirmed that some Chinese scientists who attended Japanese research institutes were affiliated with China’s so-called Seven Sons of National Defense — seven universities that have close ties to that country’s military weapon-development programs, raising suspicions that Japanese technologies were being employed to develop and improve Chinese weapons.

With an eye on preventing dubious use of Japan-spawned military and civilian technologies, an increasing number of officials of the government and ruling parties have been calling for stricter identification checks — echoing the United States — and the regulation of joint research projects involving officials affiliated with the Seven Sons of National Defense.