Japan supports companies in relocating production from China
The Japanese government has pledged 2.2 billion US dollars as part of its economic stimulus package to companies relocating their production from China. Since the outbreak of the coronavirus and the associated restrictions and bottlenecks, there have been massive disruptions in the supply chains between the two major trading partners. The additional funds are intended to compensate for the economic consequences of the pandemic and consist of subsidies of USD 2 billion for companies that relocate their production back to Japan and a further USD 200 million for relocation to other countries.
Under normal circumstances, China is Japan’s largest trading partner. However, in February, imports from China fell by almost half after factories were forced to close down or cut production sharply due to coronavirus. As a result, Japanese manufacturers had a shortage of key components. For this reason, there was renewed talk among Japanese companies of reconsidering their dependence on China as a production base. A government committee last month recommended that the production of high-quality goods be transferred back to Japan and that other goods be shifted to Southeast Asian countries. “There will definitely be a change,” said Shinichi Seki, an economist with the Japan Research Institute. He added that Japanese companies who are producing goods for export inside China are already thinking about leaving the country. On the other hand, companies such as automakers that produce for the Chinese market will stay.
Japan exports more components and semi-finished goods to China than any other major industrial nation. According to a survey by Tokyo Shoko Research Ltd., 37 percent of 2,600 companies surveyed said they were expanding their sourcing to countries other than China due to the coronavirus crisis. It remains to be seen how this strategy will affect relations between the two countries. Japan’s Prime Minister Shinzo Abe has been trying to improve relations for years. A spokesman for the Chinese Ministry of Foreign Affairs tried to calm the situation down, hoping that other countries will act like China and, given the coronavirus situation, hinder the global economy and trade chains as little as possible. Since 2005, MPR International GmbH has been supporting companies worldwide with certifications for the Asian market. Our focus is on Japan, Korea, China, India and Africa. We offer comprehensive certification support for the most frequently required certifications for Japan. Our experienced international team is happy to answer your questions about Japanese certifications.
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