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Do not withdraw from China
SCMP quoted analysts as saying that the Japanese government’s financing policies for the withdrawal of Japanese companies from China are unlikely to create a wave of displacement to or from other Southeast Asian countries. .
The five Japanese companies responded to SCMP saying that they will continue to manufacture in China because this is a particularly important market, not to mention relocating their production facilities to other locations, especially especially at this time: it will be very expensive and cause unnecessary disruption.
“Toyota has no plans to change its strategy in China or Asia. The auto industry needs many suppliers to ensure a large supply chain, and immediate change is impossible. Understanding the government’s point of view [Nhật Bản]but we have no plans to change the production schedule. “
Lixil, a supplier of construction materials and home accessories, gave the same message, saying he had no plans to leave China. “We operate a flexible global supply chain with more than 100 manufacturing facilities worldwide. The fully homogeneous, flexible structure has helped us reduce some of the damage caused by COVID-19.”
The third Japanese company, which offers to remain anonymous, said it will continue to manufacture in China with “products designed for China and sold in the Chinese market,” and thus move elsewhere. There is no commercial meaning.
In the recently announced record support package, the Japanese government said it would provide 220 billion yen (about $ 2 billion) for Japanese companies that want to bring production lines to Japan or provide 23.5 billion yen for companies that They want to bring the line to Southeast Asian countries.
The move comes after Japanese automakers and manufacturers are short of Chinese car assemblies, when the lines are temporarily closed to prevent the virus from spreading. Parts made by Chinese companies or branches of Japanese companies in China are used to assemble motors, electrical systems, furniture accessories and plastic mold parts for industry. Automotive industry. In addition to exporting to Japan, these parts are also used in Japanese factories in China.
Many aspects of the problem.
Scarcity is not the only concern of Japanese companies in China. They are also concerned about the future imposition of more taxes between the trade war between the United States and China.
There are also other issues to worry about, such as rising labor costs or protests against Japan over the Diaoyu / Senkaku Island dispute or concerns about the risk of being eaten. theft of intellectual property.
However, experts say Japanese companies have even more benefits when they stay in China.
“These companies must be very careful about their decision to stay or move elsewhere. They want to maintain a good relationship with the Chinese market.” Ivan Tselichtchev, a professor at the Niigata Administration University, said.
Even with the financial support of the Japanese government, moving the production line to a new facility or a new country will be very expensive, not to mention the cost of compensation for employees and partners. companies in China
According to Tselichtchev, administrative procedures will also be time-consuming and expensive, not to mention the situation in which China can intervene to complicate the country’s withdrawal phase.
“Companies don’t want to talk about sensitive issues because this could theoretically get them into trouble with China.” Jun Okumura, an analyst at the Meiji Institute for International Relations, said.
“At the same time, China remains a market of 1.3 billion people, one of the fastest growing economies when the world is out of the COVID-19 crisis and Japanese companies will want none, which makes them lose their position in this market. “
Okumura said he believes that after the pandemic, there is a high possibility that companies will be more prepared and flexible by building more production facilities in other countries, not just focusing elsewhere.
Japanese companies have been present in 10 ASEAN countries, including Thailand, Indonesia, and Vietnam. In 2017, these companies invested $ 22 billion in the region, double the level of 2012, with the automotive industry concentrated mainly in Thailand and Indonesia, mechanical engineering and the retail industry in Vietnam, Malaysia, and the chemical industry. study, pharmacist, semiconductor manufacturing in the Philippines.
