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Business

Japan to pump billions into its firms to shift production out of China

The country has set aside $2.2 billion out of its stimulus package for this purpose. $2bn will be spent on fir
09 Apr 2020
  • The country has set aside $2.2 billion out of its stimulus package for this purpose.
  • $2bn will be spent on firms shifting their production back to Japan.

Japan will be spending billions of dollars to shift its manufacturer’s production facilities out of China, in wake of economic upheavals caused by the coronavirus pandemic.

The country has set aside $2.2 billion out of its stimulus package for this purpose, some $2bn will be spent on firms shifting their production back to Japan whereas the remaining funds will be utilized for those companies seeking to move production in other countries.

The development is a major decision as China is Japan’s largest trading partner, however, the supply chain disruption amid the coronavirus in China has dented imports to Japan leaving the Japanese manufacturers without needed components, thus the country is now thinking to reduce its reliance 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 view that Japanese companies that were manufacturing goods in China for export were already considering moving out.

“Having this in the budget will definitely provide an impetus,” Seki added.

Meanwhile, China has stressed on making ‘concerted efforts’ to safeguard the stability of global supply chains and bring the global economy back on track.

“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.