China has filed a lawsuit against Japan over its semiconductor export controls, as Chinese representatives at the World Trade Organization (WTO) requested a review of the U.S.-led restrictive agreement with its allies to contain China's semiconductor industry. The latest move demonstrated China's resolve to safeguard its legitimate rights based on international rules, and to maintain the stability of industrial supply chains in the world, experts said. China is highly concerned about Japan's semiconductor export controls and urges it to rectify its actions, a Spokesperson for the Chinese Ministry of Commerce (MOFCOM) said. China has filed the lawsuit with the WTO against Japan over the issue, and will take resolute measures to safeguard its legitimate rights, if the Japanese side insists on disrupting bilateral semiconductor cooperation, the Spokesperson said.
“We hope that Japan will listen to reasonable voices at home, correct its wrong practices in a timely manner, promote the healthy development of economic and trade relations between the two countries, and work with all parties to maintain the stability of the global semiconductor industrial supply chain," the Spokesperson noted. The Japanese government said on March 31 that it planned to restrict exports of 23 types of semiconductor manufacturing equipment, aligning its technology trade controls with the U.S. China is the world's largest semiconductor market and the largest export destination of Japan's semiconductor manufacturing equipment. The two countries used to cooperate in both the upstream and downstream of the industrial chain for a long time, according to MOFCOM. China's representatives asked during a regular WTO meeting whether the widely reported export control agreement between the U.S., Japan and the Netherlands aimed at curbing China's ability to make advanced chips exists. To date, there has been no disclosure of the reported agreement in public. “Relevant players may have realized that the agreement adamantly violates WTO rules, so they deliberately kept the content of the agreement low-profile,” Chinese representatives said, according to CCTV.
China believes that the agreement violates the WTO's principle of openness and transparency, and undermines the authority and effectiveness of WTO rules. China's representatives required the U.S., Japan, and the Netherlands to notify the WTO of the agreement and subsequent measures, and called on the WTO to strengthen scrutiny on those measures. “China is not only defending its own legitimate rights within the WTO framework, but also striving to protect the global semiconductor industrial chain from the menace by the U.S.-led political circle,” Gao Lingyun, Expert at the Chinese Academy of Social Sciences (CASS) in Beijing, told the Global Times.
China initiated a lawsuit against the U.S. at the WTO in December last year over its chip export control measures, requesting the WTO to begin dispute consultations with the U.S. The U.S. Department of Commerce's Bureau of Industry and Security announced an extensive set of regulations in October last year, which restricted chips made using U.S. tools from being exported to China. The Biden administration is also forcing other countries to contribute to its goal of undercutting China's ability to make advanced chips, the Global Times reports.
Data from the International Trade Center of the United Nations showed that nearly 40% of Japan’s chipmaking equipment exports went to the Chinese mainland in 2021, totaling about USD11.8 billion. The numbers for U.S. and Dutch exports to China were USD6.8 billion and USD2.5 billion, respectively, over the same period. The World Semiconductor Trade Statistics organization has forecast that the global semiconductor market will decline by 4.1% this year to USD557 billion, the China Daily adds.
