Over the years greedy Japanese corporations have relocated much of their production to China, but now, thanks to the disruption to supply chains caused by the coronavirus outbreak, the Japanese government is rethinking the country's economic relationship with its giant neighbour.
As part of a recent stimulus package, the Japanese government is now "bribing" Japanese companies to pull out of China and relocate production elsewhere.
As reported by The South China Morning Post:
For a long time, there has been growing tension -- under the surface -- between the two major East Asian economies. As China has continued to expand economically, militarily, and geopolitically, the Japanese have been split between befriending the rising colossus or giving it the cold shoulder.
The election of Trump has also played its part.
On the one hand, the Japanese want to come down on the U.S. side in any trade war between China and America. But, also, the unexpected election of Trump in 2016 reminded Japanese politicians that American behaviour is ultimately unpredictable and unreliable.
This has greatly weakened Japanese faith in the global system overseen by the USA, and pushed them towards considering and promoting a greater degree of economic autarky.
Also published at Trad News
Become a Patron!
As part of a recent stimulus package, the Japanese government is now "bribing" Japanese companies to pull out of China and relocate production elsewhere.
As reported by The South China Morning Post:
Japan has earmarked US$2.2 billion of its record economic stimulus package to help its manufacturers shift production out of China as the coronavirus disrupts supply chains between the major trading partners.This move seems to be more than a mere short-term reaction to economic disruption caused by coronavirus. Instead it has all the hallmarks of a major strategic realignment, with the Japanese government viewing ever closer economic ties with its totalitarian neighbour as politically dangerous.
The extra budget, compiled to try to offset the devastating effects of the pandemic, includes 220 billion yen (US$2 billion) for companies shifting production back to Japan and 23.5 billion yen for those seeking to move production to other countries, according to details of the plan posted online.
The move coincides with what should have been a celebration of friendlier ties between the two countries. Chinese President Xi Jinping was supposed to be on a state visit to Japan early this month. But what would have been the first visit of its sort in a decade was postponed a month ago amid the spread of the virus and no new date has been set.
China is Japan’s biggest trading partner under normal circumstances, but imports from China slumped by almost half in February as the disease closed factories, in turn starving Japanese manufacturers of necessary components.
For a long time, there has been growing tension -- under the surface -- between the two major East Asian economies. As China has continued to expand economically, militarily, and geopolitically, the Japanese have been split between befriending the rising colossus or giving it the cold shoulder.
The election of Trump has also played its part.
On the one hand, the Japanese want to come down on the U.S. side in any trade war between China and America. But, also, the unexpected election of Trump in 2016 reminded Japanese politicians that American behaviour is ultimately unpredictable and unreliable.
This has greatly weakened Japanese faith in the global system overseen by the USA, and pushed them towards considering and promoting a greater degree of economic autarky.
Also published at Trad News
Become a Patron!
