00:00So Japan has made a formal protest over China's move to ban exports of items that could have military uses.
00:07It is the latest flare-up in diplomatic tensions between the major Asian economies
00:11over the comments from the Japanese Prime Minister last year on Taiwan.
00:15Let's bring in Min Min Lo, our China correspondent here with us on set,
00:18to help us understand what the Japanese response has been.
00:22Well, Japan is obviously opposed to this. It has asked China to withdraw those measures.
00:26What China does next will be something to watch, but the export control measures is pretty sweeping.
00:32It includes over 800 items, from chemicals to equipments that are used in aviation and shipping.
00:41And so, you know, it could potentially have far-reaching consequences because the language is pretty vague.
00:47It says it's targeted at Japan's military, but also any other end users that help to boost Japan's military.
00:54So a lot is going to depend on how China interprets this and whether it applies it strictly or liberally.
01:01And it could potentially impact everything from automakers to equipment manufacturers.
01:06But in terms of size and scope, you compare this to 2010, when China also placed a limit on the exports of rare earths.
01:13The scope this time is more narrow because the last time they hadn't limited it to just the military users.
01:21What could happen next? Is there a risk that there would be retaliation from Japan?
01:27Yes. Well, you think about, you know, it really depends on whether the two sides come to the table
01:31because we know China wants Japan's prime minister to retract those comments, and she hasn't done so.
01:36But in terms of what Japan can do in its toolbox, we know the two countries are very closely intertwined
01:42because Japan is China's second largest export destination.
01:46It is also its third largest source of imports.
01:49It sells a lot of machineries, equipments to China.
01:52And where Japan really dominates is in the semiconductor industry.
01:55If Japan places its own export controls there, it could cripple China's chips ambitions.
02:01And then you also got to think about the wild card, which is whether or not President Trump will respond to this
02:06because Japan and the US are very close allies if the US also joins the fray that could tilt the power balance towards Japan.
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