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Photo = AP
Among the top companies worldwide, Japanese companies were found to be the most affected by the new coronavirus infection (Corona19). According to Nihon Keizai Shimbun on Day 3, Japanese companies’ first-quarter net income fell 78% from the same period last year. This is in contrast to the United States, which has the highest number of corona19 patients in the world, and Chinese companies, the corona epicenters19, which give 36% and 26% respectively.
◆ Manufacturing bias was poisoned
Japanese companies are unlikely to balance out at Corona 19 in the first quarter. When the Sankei Shimbun asked 28 experts from Japan’s top securities companies and economic research institutes, the net earnings of listed companies in Japan were expected to decrease 64.9% in the second quarter and 33.6% overall this year.
It is somewhat surprising that a Japanese company has been directly hit by Corona 19. This is because Japan was perceived as a country with relatively little damage to Corona 19, except in February, when the group infection of the Diamond Princess cruise ship received worldwide attention.
Starting at 10:00 a.m. out of 4, the number of people infected with Corona 19 in Japan is 1.5791, and the number of deaths is 549, which is much less damage than in the United States or in some European countries, with 1,150,000 and 67,000 deaths respectively. . In particular, in the first quarter, when business performance fell dramatically, the number of infected people in Japan exceeded 2000.
Source = Nihon-Geisai Newspaper
However, the greatest damage to Japanese companies was the vulnerable industrial structure to Corona 19 and the dependence on concentrated production in China. The sectors most affected by Corona 19 were aviation, materials (chemical steel), energy (oil, natural gas), automobiles, retail sales and services. Aviation, materials and energy have turned into deficits, with auto and retail sales and service sector profits plummeting by more than 80% and 30%, respectively.
Unfortunately, most of them are the iconic industries of Japan. Let’s look at the results of the first aggregation of the 2019 Japan Economic Structure Survey, published by the Ministry of Economy, Trade and Industry on March 31.
Wholesale and retail trade and manufacturing industry account for 60% (32.7% and 27.2%, respectively) of Japanese industry. The sectors with strong strength in the United States, such as the financial industry (7.8%) and the information and communications industry (4.2%), exceeded 10%.
◆ 20.5% of car exports
Even if it goes into detail, it is a wholesale business for construction materials, minerals and metals (7.0%), a wholesale business for machinery and equipment (5.4%), a business for the manufacture of transport equipment such as automobiles (5.2%), a wholesale food and beverage business (4.8%), a chemical industry (2.6%), production Industries that have a prominent share in the machine tool manufacturing industry (1.6%), electrical machine manufacturing industry (1.5%) ), electrical industry (1.4%), manufacturing of petroleum products (1.3%), manufacturing of electronic parts and electronic circuits (1.3%) Is a manufacturing company or a wholesale and retail company that is based on a supply chain global logistics. The second highest share of social security, social welfare and nursing companies (5.7%) is the current bitter state of the aging population in Japan.
The involvement of the automobile industry in Japan is also emerging. According to the Japanese Automobile Association, as of 2019, sales by Japanese automakers amounted to 1.8 trillion yen, representing 3.3% of gross domestic product (GDP). It is the largest manufactured item. Japanese automakers employ 5.4 million people, 8.2% of the total workforce. In addition, it sold 21.6 trillion yen abroad, representing 20.5% of Japan’s total exports.
Furthermore, Japan’s dependence on Chinese parts and products reaches 21.1%. It is the highest of the seven main countries (G7). This is the background to Japanese Prime Minister Shinzo Abe’s plans to back two-thirds of the cost for companies moving a Chinese manufacturing plant to Japan in an emergency.
It is for these reasons that Japanese companies suffered much more than US companies when the global logistics system stopped and demand fell sharply with Corona19. It can be said that the globalization of manufacturing industry, which moved production bases abroad in search of a large market and low labor costs, became poisonous.
The end result is that the industrial structure needs to be diversified to face the periodic global economic crisis. Nihon Keizai Shimbun analyzed that the US industry. USA Leading globalization was a company that enjoyed a specialty in corona19, such as indispensable information and communication (IT), healthcare, and healthcare. Korea, which relies heavily on semiconductors, refineries, and chemicals, should also listen.
Tokyo = correspondent Jeong Young-hyo [email protected]