Japan Supports Companies Leaving China... "Dozens Receive 640 Billion Won in Aid"
Support Production in Japan or Southeast Asia After Decoupling from China
Strategy to Reduce Dependence on China
[Asia Economy Reporter Park Sun-mi] The Japanese government is providing financial support to companies relocating their production plants from China to Japan or Southeast Asia.
On the 20th, Bloomberg News reported, citing an announcement from Japan's Ministry of Economy, Trade and Industry, that the government plans to provide subsidies to companies moving their production plants out of China to Japan or Southeast Asian countries in order to reduce corporate dependence on China.
Fifty-seven companies, including Sharp, will be able to receive 57.4 billion yen (approximately 643.5 billion KRW) in funding from the Japanese government under the pretext of investment for domestic production in Japan. Additionally, 30 companies will receive separate support funds to invest in Southeast Asian countries such as Vietnam, Myanmar, and Thailand. However, the Japanese government has not disclosed how much funding will be provided to these 30 companies.
The Ministry of Economy, Trade and Industry of Japan stated in a press release that it did not explicitly limit funding only to companies that have exited China. However, since Prime Minister Shinzo Abe said last March that production should be done domestically in Japan or shifted to other Asian countries to reduce dependence on any single country such as China, the prevailing perception is that this support is effectively aimed at companies leaving China.
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The news agency reported that this plan is being implemented using part of the 243.5 billion yen budget allocated by the Japanese government in April to reduce dependence on China. It also explained that Japan's plan is quite similar to Taiwan's 2019 policy to support companies leaving China. The background for Japan's active support of corporate de-China efforts is that although China remains Japan's largest trading partner, anti-China sentiment within Japan has increased since COVID-19, and economic ties between the two countries have deteriorated.
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