Japan Offers Its Companies $2.2 Billion To Pack Up And Leave China
8An economist prediction
An economist of the Japanese Research Institute, Shinichi Seki had made an earlier prediction that there would be a shift in the coming days since talks were on of Japanese firms decreasing their dependency on China as a manufacturing base. “Having this in the budget will definitely provide an impetus,” he said. Car making companies and the like which manufacture for China’s domestic market will remain put.
9Materials to be sourced elsewhere
Last month there was a discussion among the Japanese Government’s panel of future investment that spoke about the need for those manufacturers who deal in high-value products to return back to Japan. The discussion suggested that production of other goods could be shifted to other countries across Southeast Asia. Now almost 37% of 2600 companies said in February that they were also diversifying the sourcing of materials to places other than China taking in account the coronavirus pandemic.
10China’s president was scheduled for a state visit but has been cancelled
Japan’s new policy could well strain ties with China that were actually on the mend. This could also negatively impact Prime Minister Shinzo Abe’s efforts over the years to renew relations with China. The Chinese Premier Xi Jinping was also scheduled for a state visit to Japan this month which would have turned out to be the first one in a decade but was postponed last month due to the virus.