The EU-Japan Summit Was More About China

US-aligned allies are growing concerned about Beijing's ability to wield its geo-economic advantage to extract geopolitical concessions.

The EU-Japan Summit on July 13 ended with both parties signing several memoranda on strengthening multilateral efforts ranging from submarine cable connectivity to reinforcing cooperation on supply chains for critical raw materials.

The latter is of particular importance and the area of most interest: semiconductors. Ursula von der Leyen stated at the Summit:

“One of our objectives is to reduce overreliance for products that are vital for our economies, like critical raw materials and semiconductors on a handful of suppliers – many of them based in China”.

China already produces roughly 70% of the world’s rare earth minerals and has a near-monopoly on processing them. Lax environmental regulations made them a central player in this supply chain, and in turn, has given Beijing significant geo-economic leverage.

The EU’s efforts to “de-risk” from China - which just means decouple - is in response to the growing tension between the Asian giant and the West. Europe’s reliance on Russia’s petroleum and the latter’s use of it to extract geopolitical concessions is but an all-too familiar dynamic Brussels does not want to relive with China.

Choosing Japan for this is no accident. The country has been a key player in global technological development for over 40 years and an important node in the Indo-Pacific supply chain for semiconductors.