This is the latest in a slew of announcements that Japan has been making of late to encourage Japanese companies to diversify their risk of China dependence. Here is how.
· Japanese manufacturers will get subsidies for shifting production out of China and into either India or Bangladesh. Japan is keen to rapidly diversify its supply chains.
· Japan wants to create a more de-risked and stable supply chain for medical materials and electronic components even in the midst of an emergency like COVID.
· There is a massive allocation of $221 billion that has been made to incentivize manufacturers for this purpose and these subsidies will be paid up-front.
· The supply chain of Japanese companies, like in the case of many global economies, is currently too reliant on China and they cannot risk supplies being cut off.
· In Round 1, Japan has approved 30 manufacturing projects, including Hoya's electronic components project in Vietnam and Laos, with a subsidy of ¥10 billion.
This is seen as a novel method of incentivizing business to reduce their dependence on China for input sourcing.
This is the latest in a slew of announcements that Japan has been making of late to encourage Japanese companies to diversify their risk of China dependence. Here is how.
· Japanese manufacturers will get subsidies for shifting production out of China and into either India or Bangladesh. Japan is keen to rapidly diversify its supply chains.
· Japan wants to create a more de-risked and stable supply chain for medical materials and electronic components even in the midst of an emergency like COVID.
· There is a massive allocation of $221 billion that has been made to incentivize manufacturers for this purpose and these subsidies will be paid up-front.
· The supply chain of Japanese companies, like in the case of many global economies, is currently too reliant on China and they cannot risk supplies being cut off.
· In Round 1, Japan has approved 30 manufacturing projects, including Hoya's electronic components project in Vietnam and Laos, with a subsidy of ¥10 billion.
This is seen as a novel method of incentivizing business to reduce their dependence on China for input sourcing.