China starts charging fees on chipmaking chemical from Japan

China has initiated the collection of fees on imports of a crucial chipmaking chemical from Japan, following an investigation that uncovered evidence of dumping activities adversely affecting China's domestic industry. The Commerce Ministry announced an anti-dumping probe into dichlorosilane, a chemical vital for semiconductor manufacturing, imported from Japan in January.

This came amid escalating diplomatic tensions between the two Asian powers after Japanese Prime Minister Sanae Takaichi hinted at potential intervention in the event of a Taiwan attack, a territory claimed by China.

Following the probe, the Chinese Commerce Ministry revealed preliminary evidence indicating that the Japanese imports were indeed involved in dumping, causing significant damage to the domestic dichlorosilane industry. Consequently, the Ministry decided to impose temporary anti-dumping measures, including a security deposit, effective from Tuesday.

Japanese firms are required to pay this extra fee, determined by the assigned deposit collection rate, to China's customs authority. The rate is 99.2% for all Japanese firms, while Tokyo-based Denal Silane is charged at a reduced rate of 80.8%.

Shin-Etsu Chemical, a leading Japanese chemical conglomerate, is currently reviewing the measure but declined to disclose financial details regarding the exported product. However, the company's spokesperson noted that the impact on its overall business should be minimal as the exported product constitutes a small fraction of their business.

Japanese officials have expressed their intention to respond appropriately to China's export control measures. Japan has lodged a strong protest and formally requested the withdrawal of these measures. The duration of the deposit on the imported chemical and the final ruling by the Chinese Commerce Ministry have not been specified.