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Old 17th Apr 2020, 07:43
  #64 (permalink)  
Ecce Homo! Loquitur...
Join Date: Jul 2000
Location: Peripatetic
Posts: 10,521
Year of the Metal Rat


Xi fears Japan-led manufacturing exodus from China

TOKYO -- Amid the coronavirus pandemic, Japanese Prime Minister Shinzo Abe has proposed building an economy that is less dependent on one country, China, so that the nation can better avoid supply chain disruptions.

The call touched off a heated debate in the Chinese political world.

In Zhongnanhai, the area in central Beijing where leaders of the Chinese Communist Party and the state government have their offices, "there are now serious concerns over foreign companies withdrawing from China," a Chinese economic source said. "What has particularly been talked about is the clause in Japan's emergency economic package that encourages (and funds) the re-establishment of supply chains."........

"Due to the coronavirus, fewer products are coming from China to Japan," Abe said. "People are worried about our supply chains." Of the products that rely heavily on a single country for manufacturing, "we should try to relocate high added value items to Japan," the leader said. "And for everything else, we should diversify to countries like those in ASEAN."

Abe's remarks were clear. They came as disruptions hit the procurement of auto parts and other products for which Japan relies on China, seriously impacting corporate Japan's activities. And they asked for something more than the traditional "China plus one" concept, in which companies add a non-China location to diversify production.

Abe was forming a "shift away from China" policy.

With the nation transfixed by coronavirus coverage, the proposal failed to generate big headlines in Japan. But China was watching carefully, perhaps wondering whether it was about to undergo an industrial hollowing-out like Japan once experienced.

Such a trend would shake the foundation of China's long-standing growth model.........

There are talks in the U.S. regarding China dependency.

Larry Kudlow, chairman of the White House's National Economic Council, has expressed his intention to consider shouldering the relocation costs of American companies returning home from China. It fits with President Donald Trump's "America first" agenda.

If the U.S. and Japan, the world's biggest and third-biggest economies respectively, move away from China, it will have a huge impact on the world's second-biggest economy.........

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