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Japanese lawmakers passed an economic security bill Wednesday aimed at protecting the country’s supply chains and critical infrastructure from theft and cyberattacks amid growing tensions with China, Reuters reported.

The legislation would allow the government to closely monitor Japanese companies working in sensitive sectors, including transport, energy and information technology. The provisions would also order firms to notify authorities of software updates.

At the same time, the government will provide subsidies for companies to strengthen supply chains against disruptions, such as shortages of electronic components. The bill also promises government funds for research and development into key technologies considered essential for economic security.

The new measures are set to take effect in stages starting next year.

Observers said the law is primarily addressing worries over China and the current Russia-Ukraine conflict, which has disrupted supply chains. It also comes after the US tightened limits on technology imports, including semiconductors, amid rising tensions with China.

Meanwhile, some businesses have expressed concern about the ambiguities in the legislation regarding government interference and monitoring.

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