Japan to fund firms to shift production out of China
In the wake of the economic upheavals caused by the coronavirus pandemic, Japan will spend billions of dollars moving production facilities of its producer out of China.
To this end, the country has set aside $2.2 billion from its stimulus package, some $2 billion will be spent on companies shifting their production back to Japan, while the remaining funds will be spent on those companies seeking to shift production to other countries.
Development is a major decision as China is Japan’s largest trading partner, but the supply chain disruption in China’s coronavirus has dented imports to Japan leaving Japanese manufacturers with no components needed, so the country is now considering reducing its dependence on China.
“There will be something of a shift,” said Shinichi Seki, an economist at the Japan Research Institute, quoted Bloomberg Quint, the economist was of the opinion that Japanese companies that manufactured products for sale in China were already considering pulling out.
“Having this in the budget will definitely provide an impetus,” Seki added.
Meanwhile, China has stressed making ‘concerted efforts’ to safeguard the integrity of global supply chains and return the global economy to its path.
“The wide-spreading COVID-19 has had a major impact on the world economy. China has achieved remarkable results in fighting the virus and resuming normal socio-economic development. We hope other countries can also take measures to avoid further impacts on the world economy and global supply chains,” said China’s Foreign Ministry Spokesperson Zhao Lijian in a presser.
