Industrial policy shift: China's new logic to counter Japan's dumping

This time, China did not wait for Japan to act first; instead, it proactively changed the game rules. The Ministry of Commerce announced on January 7th that anti-dumping investigations have been initiated against imported dichlorosilane (DCS) from Japan. This seemingly brief notice actually represents a new approach to industry response—no longer passively defending, but actively controlling key nodes in the supply chain.

The “Blood” of Chip Manufacturing Used as a Weapon

Dichlorosilane sounds unfamiliar, but its importance in the chip industry is irreplaceable. Whether it’s logic chips or memory chips, thin film deposition processes rely heavily on it. Because of this, companies like Shin-Etsu Chemical and Mitsubishi Chemical in Japan have maintained control over this market for years, attempting to restrict China’s chip industry development through technological and supply advantages.

Data submitted by the applicant, Tangshan Sanfu Electronic Materials, reveals the truth: from 2022 to 2024, Japanese companies have simultaneously expanded exports to China while frantically lowering prices, with a cumulative decline of up to 31%. This is not normal market competition but a typical dumping behavior—using low prices to crush emerging domestic substitute companies, and after driving Chinese manufacturers out, raising prices again.

Activation of Bidirectional Supply Chain Checks

The vulnerability of the industry chain lies in mutual dependence. Japan once took pride in high-end materials like photoresists, believing they held the lifeline of China’s chip industry. But they overlooked a reality: Japan is also highly dependent on China for raw materials, rare earths, and other critical resources.

A recent report from Nomura Research Institute confirmed this. If China were to ban exports of strategic raw materials like rare earths to Japan, the Japanese economy could evaporate approximately 660 billion yen (about 30 billion RMB) in just three months. This figure is only a short-term impact; the long-term costs would be incalculable.

The timing and intensity of this anti-dumping investigation are carefully planned. The first step was policy adjustments regarding export controls on dual-use items to Japan, followed immediately by initiating an investigation into dichlorosilane. This coordinated approach clearly shows that China has recognized that balancing the supply chain is far more effective in protecting its industry than passive defense.

Industry Games Under Compliance Measures

Some worry that this approach is not “rational” enough, but in fact, it is the most rational choice. The anti-dumping investigation is conducted strictly according to WTO rules, with every step supported by legal and economic grounds. This is not reckless action but a precise use of policy tools within the framework of international rules to combat unfair trade practices.

Domestic industry already has substitution capabilities; it was just suppressed previously by Japan’s low-price strategy. Now, government intervention not only protects national industries but also defends the bottom line of international commerce. From the periphery to the center, China’s chip industry is shifting from passive waiting for rescue to actively controlling the rhythm.

Future Battles and Reshaping Industry Patterns

The upcoming developments will inevitably be complex. Japanese companies will continue to exert pressure, and Japan’s political circles may unite with other countries to generate public opinion, but these cannot change one fact: the ultimate decision in industry competition lies in whose hands.

This countermeasure is not only about chips but also sends a clear signal to the world—that technological monopoly and dumping strategies are no longer feasible in China. With domestic capacity support and strategic resource reserves, China’s supply chain fate will no longer be decided unilaterally. The game rules have been rewritten; whoever recognizes this first will gain the upper hand in industry competition.