ChinaTalk Podcast Summary

Episode: Japanese Economic Security Policy with A REAL LIFE METI OFFICIAL

Date: January 2, 2026
Host: Jordan Schneider
Guest: Ishikawa Kazumi, Principal Director for Economic Security Policy, Ministry of Economy, Trade and Industry (METI), Japan

Episode Overview

This episode features a detailed conversation between Jordan Schneider and Ishikawa Kazumi of Japan's Ministry of Economy, Trade and Industry (METI), exploring how Japan conceptualizes and enacts economic security policy in the 21st century. The discussion covers METI’s historical role, the shift towards economic security as national security, strategies for supply chain resilience, coordination with global partners (especially the U.S.), and METI's approach to public-private cooperation.

Key Discussion Points and Insights

1. The Legacy and Evolution of METI

• Historical Reflection:

  • METI (and its predecessor MITI) is often revered globally for its central role in Japan's postwar economic miracle.
  • Kazumi’s Perspective: Today’s METI is “doing a little bit different things compared to the traditional industrial policy” (00:55). Emphasis is now on economic security rather than just industrial growth.

• Quote:

  • “The traditional image of the Japanese ink is totally different from what we are doing right now.” — Ishikawa Kazumi [00:55]

2. Defining Economic Security

• Changing Meanings Over Time:

  • Economic security historically meant securing daily life (FDR), then free trade (Clinton era), and now equates to national power and supply chain resilience due to rising global uncertainties (03:42).
  • Focus has shifted to “strengthen our economic power to survive [an] destabilizing world” (04:52).

• Modern Japanese Approach:

  • Japan’s framework is closely aligned with U.S., Korea, EU, and China, seeking to fortify economic and technological foundations.

3. Frameworks: Indispensability and Autonomy

• Key Concepts:

  • Indispensability: Japan’s unique technological edge in strategic sectors.
  • Autonomy: Ability to maintain supply chains and critical functions even in crisis.
  • “The two concepts, indispensability and autonomy, is our...goal as economic security.” — Ishikawa Kazumi [09:25]

• Sector Categorization (Three Buckets):

  • Green: Autonomy lost or depended on one source (e.g., critical minerals, some pharmaceuticals, legacy semiconductors).
  • Blue: Sectors with existing Japanese technological indispensability (e.g., advanced semiconductor equipment).
  • Red: Emerging areas requiring proactive investment for future indispensability (e.g., quantum, AI, biotech, fusion).
  • [10:55] for detailed breakdown

4. Case Study: Rare Earth Diversification

• Lessons Learned:

  • Importance of rare earths realized in 2010s after supply shocks.
  • Sectors vital for both civilian and military use; “tiny critical minerals impact huge supply chain.”
  • Emphasis on public-private partnerships and continuous, painstaking supply diversification.
  • “Sometimes some event happened, then the business react but the event finished, the business forget...We have to maintain the continuous efforts.” — Ishikawa Kazumi [15:04–17:45]

• Methods:

  • Ongoing education (business school case studies), combining top-down CEO engagement with grassroot awareness. [19:32]

5. Policy Tools: Regulation and Incentives

• Balancing ‘Carrots and Sticks’:

  • METI does not focus solely on regulation—innovation and business expansion in strategic areas is incentivized.
  • Combination of “protective measures like export control or IT control and promotional things like R&D support...is very key to ignite the heart of the business person as well as researchers.” [22:39–24:53]

• Business Engagement:

  • Japanese businesses increasingly aware of geopolitical risk, especially in global sectors like semiconductors.
  • Need to spread awareness to regional/local firms less exposed to international volatility. [25:47]

6. Semiconductors & Export Controls

• Sensitive Sector:

  • The semiconductor industry exemplifies the importance and vulnerability of supply chains.
  • Japan’s export control philosophy is country-agnostic and focused on end-use, aligned with global norms (Wassenaar Arrangement).
  • Civilian applications are permitted with scrutiny; controls aim to prevent military misuse.
  • “It is global norms to control the cutting edge semiconductor...Japan is doing such things.” [30:29]

• Global Cooperation Required:

  • “No one country can achieve the semiconductor things.” Export controls are balanced with proactive subsidization of emerging technologies (“run faster” strategy). [33:50]

7. U.S.–Japan Economic Security Coordination

• Recent Agreements:
  • Recap of recent leadership summits and their focus: joint R&D, AI, quantum, critical minerals, and semiconductors.
  • Japanese growth strategies (“17 strategic sectors”) align with U.S. efforts; global collaboration (e.g., TSMC in Kyushu, AI/quantum research) is portrayed as essential. [34:22]

8. Ambiguity and Limitations of Economic Security

• Realism About Vulnerabilities:
  • Even with best efforts, complete insulation from economic coercion is impossible given China’s economic weight.
  • Japan’s approach: bolster self-reliance, but not at the expense of attacking others or weaponizing choke points.
  • “We don’t want to be doing some kind of economic statecraft to reduce the others power. We don’t want to do such kind of things. We would like to strengthen our side power so that [we can] maintain the good relationships.” — Ishikawa Kazumi [39:41–41:45]
  • “Peace through economic strength.” — Jordan Schneider [41:45]

9. Building an ‘Economic Security Community’

• Bridging Hard and Economic Security Networks:

  • Traditional security (defense, military) communities exist, but not for economic security.
  • METI’s goal: build robust networks across government, business, and academia domestically and internationally.
  • “To create economic security communities between the public, private and globally...this is what I am calling economic security communities.” — Ishikawa Kazumi [42:46]

• Global Forum:

  • Japan to host the Economic Security Global Forum in December to kickstart ongoing multilateral engagement. [42:46–45:26]

10. Communication and ‘Mafia’ Networks

• Internal Communications:
  • Japanese government uses secure tools like Microsoft Teams, emphasizes face-to-face for sensitive discussions. Less reliance on texting or encrypted apps common in U.S. politics.
  • “Face to face meeting is of course very important. Especially the practitioner level as well as top level, C suite level.” — Ishikawa Kazumi [46:15]

Notable Quotes & Memorable Moments

• “I use the word of the mafia this much. However I have to use the community rather than the mafia. It is politically correct.” — Ishikawa Kazumi, on building networks [42:46]
• “Sometimes some event happened, then the business react but the event finished the business forget...We have to maintain the continuous efforts.” [17:45]
• “No one country can achieve the semiconductor things.” [30:29]
• “Peace through economic strength.” — Jordan Schneider [41:45]

Timestamps for Key Segments

• METI’s Legacy & Modern Role: 00:00–03:42
• Defining Economic Security (Historic to Present): 03:42–06:39
• Indispensability & Autonomy; Sector Buckets: 09:25–14:26
• Rare Earths Case Study: 14:26–19:32
• Business Engagement: Carrots, Sticks, Communication: 19:32–22:39
• Public–Private Cooperation & Regulation: 22:39–25:47
• Semiconductor Focus, Export Controls: 29:13–33:50
• Global Partnerships & U.S.–Japan Coordination: 33:50–38:08
• Limits of Economic Security, Relations with China: 38:08–41:51
• Economic Security ‘Community’ and Global Forum: 41:58–45:26
• Secure Communication Practices: 45:26–48:03

Conclusion

This conversation provides a nuanced look into how Japan is reframing economic policy for a turbulent world—grounded in historical strengths but reoriented toward resilience and global cooperation. METI’s approach is pragmatic: sectors are carefully prioritized, public-private ties are emphasized, and there’s recognition of both the limits and necessity of economic security measures in an interdependent world. Kazumi’s candid, sometimes self-deprecating insights provide a rare look at Japanese policymaking, blending caution, optimism, and a dose of diplomatic humor.