Micron-Japan Deal Counters China ‘Coercion,’ Rahm Emanuel Says

Micron Technology Inc.’s deal with Japan for financial aid to make next-generation memory chips sets a precedent for countering Chinese “coercion,” according to US Ambassador Rahm Emanuel.

(Bloomberg) — Micron Technology Inc.’s deal with Japan for financial aid to make next-generation memory chips sets a precedent for countering Chinese “coercion,” according to US Ambassador Rahm Emanuel. 

The agreement, which Bloomberg reported would amount to about ¥200 billion ($1.5 billion) in incentives from Japan, has a “component of confronting China’s coercion and saying that America and Japan will act in unison to help us secure our supply chain and help companies that are targeted by China’s coercion,” Emanuel told Bloomberg Television on Friday in Hiroshima, where leaders are gathering for the Group of Seven summit. 

G-7 leaders are set to discuss ways to fight back against Chinese economic measures during the three-day gathering. China has rejected the allegations and accused the US of bullying nations and starting trade wars in its own report on American “coercive diplomacy” released on Thursday. 

In the interview, Emanuel — the US envoy to Japan — cited Chinese investigations into Micron, US consultancy Bain & Company and Mintz Group as examples of Beijing seeking to intimidate companies rather than countries. 

“They are sending a very singular message that they will coerce companies to try to break the Western world when it comes to securing their own not only strategic assets like semiconductors, but also to try to do certain things to force a political change,” Emanuel said. 

China recently announced a cybersecurity probe into imports from Micron, the US’s largest memory-chip maker, citing national security reasons. The company said it was in communication with the Cyberspace Administration of China concerning the inquiry and “cooperating fully.” 

Earlier this month China unveiled a nationwide anti-espionage crackdown on consulting firms, accusing Capvision of leaking state secrets and having ties with foreign intelligence agencies. The company said in response that it would stick to national-security policies and take the lead to guide the healthy development of the consulting industry.

Emanuel said discussions on how to respond to China’s actions will feature in the G-7 communique, with the Japan-Micron deal an example of how governments can push back. 

“We have been successful across the board in confronting China when they dealt with Australia, Japan or Korea or Philippines, but it’s been ad hoc,” Emanuel said. “Now we need a collaboration, a coordinated strategy in a unified way to confront it.”

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