Japan puts up $2.2 billion to help its companies move out manufacturing from China

As part of its record economic stimulus package of $993 billion, the Shinzo Abe government in Japan has set aside $2.2 billion to help their manufacturers shift production out of China. A majority – $2 billion – will be used to aid companies that wish to move production back to Japan while the remaining amount will be used for companies that seek to move to different countries.

In normal circumstances, China is Japan’s biggest trading partner but the over-reliance of Japanese manufacturers on China for necessary components meant that production dropped sharply February onwards. There is now growing talk of Japanese firms reducing their dependency on China for manufacturing as a government panel discussed the need for manufacture of high value products to be shifted back to Japan, and for other goods to be distributed across Southeast Asia.


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