Japan to Fund Firms to Shift Production Out of China

Coronavirus Reshapes Global Economy: Japan To Fund Companies To Shift Production Out Of China
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Japan Ditches China In Multi-Billion Dollar Coronavirus Shakeout


KEY POINTS
  • Abe has announced a $990 billion stimulus plan to help economy tide over the crisis
  • Japanese companies had for long wanted to scale down dependence on China
  • China's hopes for a business-as-usual scenario after the crisis may be misplaced

Japanese firms that had been planning to cut dependence on China for a long time may be happy with Prime Minister Shinzo Abes’ substantial $2.2 billion worth of allocation for helping them move out production. These companies had wanted to avoid getting caught in the increasingly acrimonious U.S.-China trade war.
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Abe announced a stimulus package of nearly $990 billion to help the economy tide over the crisis and the outlay can hugely alter the post-pandemic industry scene. Japan reported 4,768 infections and 85 deaths as of Thursday (April 9) from the coronavirus pandemic. The global death toll is nearing 95,800 and infections have topped 1.6 million.

Economic stimulus package
The stimulus package earmarks 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, Bloomberg reports.

China was Japan’s largest trading partner until the coronavirus struck, leading to substantial scaling back of trade. In a setback to the ties, a visit by Chinese President Xi Jinping scheduled for early this month was postponed amid the spread of the virus and no new date has been set, the Bloomberg report said. The allocation for moving plants out of China could further sour ties between the two Asian economic giants despite Abe’s avowed efforts to bring the two traditional rivals closer.

About a thousand Japanese companies began to diversify the purchase of components for their production in February, abandoning Chinese suppliers, the report says quoting Tokyo Shoko Research.
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Read More: https://www.global-gupshup.com/2020/04/earthquake-tremors-felt-in-delhi-ncr-no.html

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