Japan Establishes Inter-Ministerial Review Body to Guard Against Foreign Infiltration and National Security Risks

TOKYO (AP) -- Japan's government today established an inter-ministerial organization to coordinate the review of national security risks posed by foreign investment, similar to the U.S. Committee on Foreign Investment in the United States (CFIUS), to strengthen scrutiny of overseas capital's investments in Japanese companies.

Bloomberg reported that in the past, Japan's method of reviewing foreign investment risks was basically handled only by the Ministry of Finance and the ministries responsible for related industries.

The Japanese government established the Committee on Foreign Investments in Japan based on the recently revised Foreign Exchange and Foreign Trade Act (FEFTA). The new law requires pre-screening for specific indirect acquisition cases.

For high-risk investors such as foreign governments or state-owned enterprises, Japan's review authority will also be expanded to cover sectors that previously did not require review.

The report pointed out that the U.S. Committee on Foreign Investment in the United States primarily focuses on threats from China, and Japan may adopt similar measures.

In her 2024 book "Japan's Economic Security: Golden Rules for Protecting the Nation and Its People," Sanae Takaichi wrote, "When seeking to strengthen supply chain resilience and information security, we must never forget the existence of China."

She pointed out that China is Japan's largest source of imports, has significant influence on global supply chains, and sends a large number of researchers and students overseas. She also mentioned China's "National Intelligence Law" and stated that the law can compel Chinese citizens to assist the state in intelligence gathering.

The report also pointed out that a series of recent incidents in Japan have exposed economic security vulnerabilities in its industries. For example, Chinese spies stole Japanese commercial secrets in board meetings; a chip smuggling group used Japan as a transit point to smuggle NVIDIA's advanced artificial intelligence (AI) chips; and a drug cartel used Japan as a relay station to secretly import the synthetic drug "fentanyl" into the United States.

These cases show that foreign forces have targeted Japan for espionage and other illegal activities, and in certain circumstances, even as a convenient smuggling hub.

A series of recent events have also confirmed Takaichi's concerns. Within the past week, it was reported that Japan's Self-Defense Forces used USB drives infected with Chinese viruses; last month, Bloomberg reported that Taiwanese prosecutors are investigating three suspects suspected of successfully smuggling at least one batch of NVIDIA AI chips to China after exporting them to Japan.

However, these problems are not limited to China. As shown by data from the National Police Agency of Japan, these threats are spreading globally through digital channels. Japan has detected suspicious cyber activities from around the world, including the United States and Russia. However, the National Police Agency report pointed out that because IP addresses can now be faked or impersonated, it is extremely difficult to trace and pinpoint the actual source of the attack. (Compiled by Li Jing / Reviewed by Liu Shuqin) 1150629

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