China firms blocked from Japan's cybersecurity certification 'JC-STAR'

Japan's new cybersecurity certification system, "JC-STAR," for companies involved in its power grid sector has resulted in the exclusion of major Chinese enterprises, including Huawei, BYD, and CATL. This move has sparked strong criticism from China, which views the certification as a de facto ban on its companies.

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It is actually excluding Chinese companies.

Starting in fiscal year 2027, all equipment connected to Japan's national power grid will be required to obtain the JC-STAR certification. This system, developed by Japan's Ministry of Economy, Trade and Industry, aims to safeguard critical information and prevent cyberattacks targeting power grids and renewable energy facilities. While approximately 30 companies from Japan, South Korea, the United States, and Germany have successfully obtained the certification, no Chinese firms have been approved.

Chinese companies argue that Japan is leveraging its National Intelligence Law, enacted in 2017, to justify the exclusion. This law mandates that organizations and citizens support and cooperate with national intelligence efforts, leading Japan to potentially believe that Chinese firms could be compelled to share sensitive information obtained from Japan's critical infrastructure.

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The decision was made based on a comprehensive judgment of the data submitted by companies and information held by the Japanese government.

The situation is escalating into a diplomatic and economic issue, with China having previously retaliated against Japan for comments regarding Taiwan. Japanese media reports suggest that while Chinese products are cost-effective for energy storage and solar power installations, the JC-STAR certification could lead to further economic pressure from China. The ongoing conflict highlights the tension between economic security and cost considerations.

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The struggle between economic security and cost will continue.