Japan to establish economic security division in Cabinet Office

The Yomiuri Shimbun

December 12, 2021

The government plans to create a new division within the Cabinet Office to serve as a control tower for economic security, The Yomiuri Shimbun has learned.

The new division is expected to work with relevant ministries to strengthen supply chains, by having companies draw up plans to ensure a stable supply of semiconductors and other goods. The government also plans to give it the authority to screen for vulnerabilities at critical facilities and recommend corrective measures.

According to government and ruling party sources, the economic security division is expected to be staffed by dozens of personnel from the finance, economy, defense and other ministries.

Major countries such as the United States and China are competing to secure important items such as semiconductors and develop new technologies. The government has therefore decided that Japan must strengthen its efforts across various ministries and agencies.

It aims to submit a law on the promotion of economic security to the ordinary Diet session, which will be convened in January, and to establish the division after the bill is passed. The National Security Secretariat (NSS), which has played a central role in the field of economic security, will provide information and advice to the new division.

NSS operations in connection with economic security will be limited to screening acquisitions and investments by foreign companies.

The division will work with relevant ministries and receive plans from companies on how to secure a stable supply of important goods. If the division judges a plan to be effective, it will provide subsidies and other assistance.

Should the division decide that supply may be disrupted if a plan remains unchanged, an alternative plan will be drawn up to diversify stockpiles and supply networks.

The division’s screenings will cover core infrastructure. To preserve the functions of social infrastructure, the division will examine the use of foreign products that could pose a security threat to critical equipment and systems, such as electrical power and telecommunications. The division will also check the suitability of companies’ subcontractors and, if vulnerabilities are found, it will make corrective recommendations to any such company.

The division will also support the research and development of advanced technologies such as artificial intelligence and quantum technology, and be involved in examining whether sensitive patent applications, such as those for weapons development, should be kept confidential to prevent technology from leaving the country.