Leave China? No thanks, some Japanese firms say to Tokyo’s cash incentives
- Toyota is among the firms who say they have no plans to change their strategy in China, as Tokyo offers subsidies to encourage supply chain diversification
- Analysts say the companies are being careful with their comments. But leaving the world’s second biggest economy isn’t going to be that easy or desirable
All five Japanese companies spoken to by This Week in Asia for this article said they intended to continue to manufacture in China on the grounds that it remains a critically important market and that it would be expensive and unnecessarily disruptive – particularly at the present time – to relocate a large part of their operations elsewhere.
Household fittings and construction materials provider Lixil Corporation released a similar statement saying it had no plans to move production out of China. “We operate a flexible global supply chain with more than 100 manufacturing bases worldwide. This flexible and fully integrated structure has enabled us to absorb some of the impact of Covid-19,” it said.
A third Japanese manufacturer, which did not want to be identified, said it would continue to make its goods in China as it “designs products for China and we sell them in China” and that moving elsewhere would make little business sense.