Japan Is Spending Over $2 Billion To Urge Companies To Leave China

• Japan has announced that they are spending more than $2 billion to urge manufacturing companies to move out of China.
• This initiative comes as part of the country’s plan to combat the economic impact of the coronavirus pandemic.
• Firms from other countries, such as the United States, are also leaving China, although there are no similar incentives from their government.

Japan recently made headlines after declaring that they are spending billions to encourage Japanese companies based in China to move out and bring their businesses back to the country – or anywhere else, for that matter.

Yes, it looks like Japan is serious about abandoning China following the coronavirus pandemic that shook the entire world. As many observers have pointed out, China’s alleged coverup of the disease has led to an alarming health crisis and a global economic problem.

In a report by Bloomberg, we read:

“The extra budget, compiled to try to offset the devastating effects of the pandemic, includes 220 billion yen (US$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.”

With this big announcement, Japan is obviously showing that they want to decrease their reliance on China as a “manufacturing base,” wrote Bloomberg. Now they’re hoping that companies will be attracted by the incentives so that they set plans to return to Japan or establish new bases in other Southeast Asian countries instead.

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China has always been the “biggest trading partner” of Japan but things rapidly changed after “imports from China slumped by almost half in February as the disease closed factories.”

Similarly, several American companies in China are also leaving one by one although there are no official directives from the U.S. government so far. It is expected that other countries will soon follow the same move.

Meanwhile, Beijing’s Foreign Ministry spokesperson Zhao Lijian said:

“We are doing our best to resume economic development. 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.”

It remains to be seen how Japan’s unprecedented move will affect the relations between the two countries.