Posted on 04/09/2020 2:42:48 PM PDT by BlackFemaleArmyColonel
Japan is willing to fund its companies to shift manufacturing operations out of China, Bloomberg has reported as the disruptions caused to production by the coronavirus pandemic has forced a rethink of supply chains between the major trading partners.
As part of its economic stimulus package, Japan has earmarked $2.2 billion to help its manufacturers shift production out of China. Of this amount, 220 billion yen ($2 billion)is for companies shifting production back to Japan and 23.5 billion yen for those seeking to move production to other countries.
China is Japan’s biggest trading partner under normal circumstances, but imports from China have slumped by almost half in February due to lockdowns to curb the spread of the virus hitting manufacturing and the supply chain.
Shinichi Seki, an economist at the Japan Research Institute, predicted that there would be a shift in the coming days as there already was renewed talk of Japanese firms reducing their reliance on China as a manufacturing base. “Having this in the budget will definitely provide an impetus,” he told Bloomberg.
Companies, such as car makers, which are manufacturing for the Chinese domestic market, will likely stay put, he said.
The Japanese government’s panel on future investment had last month discussed the need for manufacturing of high-added value products to be shifted back to Japan, and for production of other goods to be diversified across Southeast Asia.
More than 37 per cent of the 2,600 companies surveyed by Tokyo Shoko Research Ltd. in February had also said they were diversifying procurement to places other than China amid the coronavirus crisis.
The policy, however, could strain ties that had been on the mend lately and affect Prime Minister Shinzo Abe’s years-long effort to restore relations with China.
(Excerpt) Read more at news18.com ...
The beginning of the end for Chinaah!
WIN-WIN Tokyo style
Why aren’t we doing the same? No more outsourcing!
Most of them are already moving to Indonesia, Malaysia, and Thailand.
We should be doing the same (tax credits, tariffs)
Other countries will follow Japan’s lead. Xi better worrying about China’s economy taking a hit.
USA should do this too ...
We should as well, but fine and sanction those that do not.
Excellent news! All of the world’s advanced,industrial countries (US,Europe,Japan,South Korea) should pull their factories.
YEA!!!
China’s next industry would be the export of viruses in vials to rogue regimes.
This is the end of China’s meteoric rise as the world’s factory.
That title will no longer exist - manufacturing will become more distributed.
I don’t see this as the “end for China” as they’ve already triggered their internal market.
It is the end of MUCH of their export-driven economy, but not the end of China
Outsourcing and offshoring are different things - they sometimes happen together but not always.
If a retailer in Texas gets another company to provide cleaning services and Microsoft Azure to provide server computing services, then it is outsourcing.
If it hires call center staff in Manila rather than Houston, then it is offshoring.
If it hires a Filipino company to provide the call center work, then it is outsourcing AND offshoring.
As to your “No more outsourcing” — that’s not going to happen for the above reason.
If you mean to say “No more offshoring” - that will remain, but offshoring may happen in different countries other than China
Companies will move factories that supply the home country. However factories that supply the Chinese market will remain - so Toyota, Sanyo etc. factories supplying products to the Chinese will remain
Super - China’s gonna have some serious setbacks - can’t wait until the time is right for Trump to settle up with them...gonna make the trade deals look like they were winning.
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