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ECONOMY

Editorial: Strengthen economic security through effective administration of new law

  • May 12, 2022
  • , Sankei , p. 2
  • JMH Translation

The House of Councillors passed a bill on promoting economic security, the highest priority bill in the current Diet session, during a plenary session on May 11.

 

The new law will increase the government’s involvement in the private sector in order to stably procure critical materials connected to the safety and security of people’s lives and to nurture and maintain cutting-edge technologies.

 

The perspective of considering economic activities and security in an integrated manner is essential given the increasingly severe security environment. Japan urgently needs to work on economic security in particular on account of its deep economic ties with China, which pursues hegemony.

 

We welcome the enactment of the law as a strategic move as part of Japan’s efforts to ensure economic security.

 

What is important is the administration of the law when it goes into effect next spring. Cabinet and ministerial orders will be issued to specify the items subject to the law. This will require the government to make appropriate decisions to effectively address economic security risks.

 

The law focuses on strengthening supply chains for semiconductors and other specified important materials, introducing a safety pre-screening system for key infrastructure systems, and facilitating the development of cutting-edge technologies through public-private cooperation. The law also sets penalties for [patent] information leaks.

 

When the Diet enacted the bill, it adopted a supplementary resolution calling for respect for the independence of business activities out of concern that the government’s involvement would increase unnecessarily because detailed regulations are determined by cabinet and ministerial orders that do not require Diet deliberations.

 

It goes without saying that economic freedom should not be excessively restricted. But priority should not be given solely to economic rationality while turning a blind eye to the risk of entrusting critical materials to specific nations and the possibility of advanced technologies being abused overseas.

 

Failure to implement necessary regulations due to excessive consideration for corporate independence would do more harm than good. It is hoped that the government will have the flexibility to effectively strengthen regulations based on the international situation.

 

A security clearance system for handling classified information and some other necessary measures were not included in the new legislation.

 

The government should take these remaining issues into consideration when it further examines the systems for enhancing economic security.

 

Japan generally has had a tendency to lag behind Western nations in taking economic security measures. The latest legislation may be meant to keep pace with the West, but in actuality Japan should be independently drawing up economic security measures that are appropriate for the nation.

 

Russia’s invasion of Ukraine has clarified that the stable procurement of energy and food are intrinsically linked to the security environment. The government of Prime Minister Kishida Fumio is responsible for systematically executing the strategies Japan needs to adopt.

 

 

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