Japan’s economic stimulus package will push manufacturers to shift production out of China

An interesting development coming from Japan – apparently, as part of the Japanese stimulus legislation in response to the coronavirus pandemic, the Japanese government is offering financial incentives to Japanese companies to move factories out of China, and back to Japan or other countries. I don’t know enough on that topic in order to form an opinion, but I will quote a few online publications:

Japan to Fund Firms to Shift Production Out of China:

Japan has earmarked $2.2 billion of its record economic stimulus package to help its manufacturers shift production out of China as the coronavirus disrupts supply chains between the major trading partners.

The extra budget, compiled to try to offset the devastating effects of the pandemic, includes 220 billion yen ($2 billion) for companies shifting production back to Japan and 23.5 billion yen for those seeking to move production to other countries, according to details of the plan posted online. (Bloomberg)

‘Pack up and get out of there,’ Japan to spend $2.2 billion to get Japanese companies to exit China:

“The first of the many avalanches has begun for China. The Shinzo Abe government of Japan has approved a stimulus package worth whopping 108.2 trillion yen (US$993 billion) – equal to 20 percent of Japan’s economic output – to cushion the impact of the epidemic on the world’s third-largest economy. Out of the total amount, it has earmarked US $2.2 billion to help its manufacturers shift production out of China.

220 billion yen ($2 billion) is pledged for Japanese companies shifting production back to Japan and the remaining 23.5 billion yen for those seeking to move production to other countries. The disruption in supply chains amidst the growing scare of the Wuhan virus and the damages incurred when the Coronavirus epidemic was at its peak in China has led Japan to take this radical step. China will lose a large number of jobs as a result of this move.” (TFIpost)

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