A report by the Financial Times titled “Can Japan Protect Its Indispensable Companies?” explores Japan’s challenge in balancing foreign investment openness, including hostile takeovers, with safeguarding its technological edge and economic security amid rising geopolitical competition, particularly with China. The report highlights increasing hostile takeover attempts on Japanese firms specializing in sensitive technologies by foreign companies, such as Taiwan’s Yageo’s bid for Shibaura. This comes as part of a broader trend of foreign entities targeting Japan’s small and medium-sized tech firms. Concerns over sensitive technology leakage, especially to China, threaten Japan’s position in global supply chains. The Japanese government is introducing new regulatory frameworks, like pre-sharing technology review mechanisms, to protect its technological superiority. The report also discusses fears that excessive openness could lead to losing control of specialized market leaders, which play a crucial role in global technologies. Economist Joe Yerq from Cedra Markets notes Japan’s delicate policies to maintain its tech edge while regulating foreign investment, particularly in national security-related sectors. He emphasizes the need for clear foreign investor controls to prevent majority foreign ownership of vital firms while encouraging domestic investment and legal protection for strategic sectors. The government also supports local mergers and acquisitions to enhance competitiveness. Concerns about monopolistic practices in AI integration by tech giants like Google, Apple, and Microsoft are highlighted in a report by Japan’s Fair Trade Commission. The report warns that embedding proprietary generative AI into existing products could violate anti-monopoly laws if aimed at hindering competitors. Expert Mohamed Saeed suggests Japan adopt a multi-faceted strategy involving public-private partnerships, flexible foreign investment legislation, and innovation support through government investments in advanced research areas like quantum computing and space technology.
— new from سكاي نيوز عربية
