Japan to pay firms to leave China, relocate production elsewhere as part of coronavirus stimulus
- More than US$2 billion of the country’s record economic stimulus package will be used to help companies move production away from China
- The move coincides with what should have been a celebration of friendlier ties between the two countries, before the pandemic struck
The move coincides with what should have been a celebration of friendlier ties between the two countries.
China is Japan’s biggest trading partner under normal circumstances, but imports from China slumped by almost half in February as the disease closed factories, in turn starving Japanese manufacturers of necessary components.
“There will be something of a shift,” said Shinichi Seki, an economist at the Japan Research Institute, adding that some Japanese companies manufacturing goods in China for export were already considering moving out. “Having this in the budget will definitely provide an impetus.”
Companies, such as car makers, that are manufacturing for the Chinese domestic market, are likely to stay put, he said.
Japan exports a far larger share of parts and partially finished goods to China than other major industrial nations, according to data compiled for the panel.
“We are doing our best to resume economic development,” Foreign Ministry spokesman Zhao Lijian told a briefing on Wednesday in Beijing, when asked about the move.
“In this process, we hope other countries will act like China and take proper measures to ensure the world economy will be impacted as little as possible and to ensure that supply chains are impacted as little as possible.”
Yet many in Japan are inclined to blame China for mishandling the early stages of the outbreak and Abe for not blocking visitors from China sooner.
Meanwhile, other issues that have deeply divided the neighbours – including a territorial dispute over East China Sea islands that brought them close to a military clash in 2012-13 – are no nearer resolution.
Chinese government ships have continued their patrols around the Japanese-administered islands throughout the crisis, with Japan saying four Chinese ships on Wednesday entered what it sees as its territorial waters.
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