Chinese spies, smuggled drugs fuel Japan PM Takaichi’s security push

Japan is intensifying its economic security measures amid a rise in foreign espionage and illicit activities targeting the nation. Recent incidents, including Chinese spies stealing industrial secrets, smugglers ferrying AI semiconductors, and drug gangs involved in fentanyl trafficking, have exposed significant vulnerabilities.

These cases underscore how foreign actors increasingly view Japan as both an attractive target for espionage and a potential gateway for illegal operations. In response, Prime Minister Sanae Takaichi is spearheading Japan's most ambitious economic-security initiative in years.

Her administration is set to launch an entity modeled after the U.S. Committee on Foreign Investment in the United States (CFIUS). This new body, operational by June 29, will coordinate across government ministries to scrutinize foreign investments for national security risks. This marks a departure from the current system, where reviews are primarily handled by the Finance Ministry and relevant industry regulators.

The new legislation, a revision to the Foreign Exchange and Foreign Trade Act, also expands pre-screening requirements to cover indirect ownership and grants authorities greater power to examine transactions by high-risk investors, such as foreign governments or state-controlled entities, even outside traditionally sensitive sectors. This follows a trend of increased foreign investment filings since a 2019 overhaul that lowered the scrutiny threshold for activist investors.

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Takaichi is pushing forward through the menu of economic security policies that policymakers, bureaucrats, even academia have been advocating over the last few years and actually implementing it