“It is hoped that Japan can clearly see the situation, make rational decisions, work together with China to … maintain open and smooth production and supply chains,” he added.

Wu’s speech comes at a time of widening geopolitical rifts between the two Asian neighbours, as concerns over China’s rising military power make Tokyo lean closer to Washington, and Beijing tries to break a US-led multinational squeeze on its access to chip know-how amid an intensifying tech rivalry.

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‘Don’t help a villain’: China urges Japan not to follow US’ lead on tech isolation

‘Don’t help a villain’: China urges Japan not to follow US’ lead on tech isolation

The restrictions, due to take effect on July 23, are seen to be in tune with US technology curbs on China that Washington says are motivated by national security concerns amid Beijing’s “military-civil fusion” policy aimed at the swift modernisation of its armed forces.

While Japan has said the measure is not aimed at any specific country, it has been viewed as aimed at China, and Wu argued that the target was “quite clear”.

Japanese companies could be faced with substantial losses if Tokyo persisted in applying the export controls, according to Chen Zilei, director of the Research Centre for Japanese Economics at the Shanghai University of International Business and Economics.

“It is believed that the majority of Japanese businesses would not be happy with such an outcome,” he said.

Japan and the Netherlands reportedly reached an agreement with the US in January to limit the export of some semiconductor technology to China.

This was viewed as aimed at hindering China’s ambitions to boost semiconductor manufacturing, following Washington’s sweeping export control updates in October to restrict Beijing’s access to high-end US chip technology, equipment and talent.

Japan, along with Taiwan and South Korea, is also part of the US-led “Chip 4” alliance of top semiconductor producers aimed at building a secure and resilient chip supply network.

“The US factor has become the largest external challenge for the stable development of China-Japan relations,” Wu told the JAPIT event on Friday, adding that bilateral ties were now “severe and complex”.

“Economic and trade cooperation between China and Japan should be fair, open, and comprehensive, rather than selective or unilateral profit-making, still less should it be up to other countries to decide what can and cannot be done in China-Japanese cooperation,” he said, in comments made public by the Chinese embassy on Sunday.

But such efforts face the hurdle of broader tensions with Japan, as its foreign policy under Prime Minister Fumio Kishida becomes increasingly tilted towards the US.

Hitting out at Tokyo over its labelling of Beijing as “an unprecedented and the greatest strategic challenge”, Wu also slammed host Japan’s backing for the US-led censure of China at last month’s Group of 7 summit, arguing that such a “negative tendency” had begun to poison economic and trade ties.

“China has never regarded Japan as a risk, nor has it encouraged businesses to leave Japan,” he told around the 60 Japanese business representatives attending the event, including Yohei Kono, JAPIT president and a former speaker of the Japanese lower house.

Kono will lead a JAPIT delegation to China next month.

Wu also called on Japanese and Chinese business communities to increase mutual visits and exchanges so as to build a better bilateral relationship.

“We see that the vast majority of Japanese businesses maintain a cool mind and clear eyes,” Wu said. “[But] trade between Japan and China is showing signs of slowing down … that trend should be reversed.”

G7 leaders meeting in Hiroshima last month had said they were only looking to “de-risk” but not decouple with China.

But Wu said the rhetoric was still a de facto attempt to reduce or even cut off economic links with China, calling it a push for “de-sinicisation”.