It was a wish of the Japanese government to initiate a transition that would allow Japanese companies to reduce their reliance on Chinese factories. According to a recent Kyodo News study published by the South China Morning Post, 42% of Japanese tech companies have started this transition today and are planning or having their products manufactured outside of China.
The awakening of Japan?
A large number of these companies are recognized by the government as “sensitive to security-related technologies”. 40% of these Japanese tech companies have already moved their manufacturing facilities and parts supply sources outside of China. A policy initiated by the Japanese government with a grant of 470 million euros released in summer 2020.
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This decision was motivated for several reasons. While Japanese tech companies seem to have the idea of reducing their dependence on China, the aim is also to mitigate security risks and face growing competition between the United States. and China to avoid total supremacy. The Japanese government is also drawing conclusions from the coronavirus crisis and wants to avoid a shortage of medical equipment.
In reality, this idea is not new to Japan. In March, Prime Minister Shinzo Abe said: “Japan must do everything it can to bring production facilities home or, in the worst case, diversify its production in other countries so as not to be dependent on China alone.” In 2019, Nintendo confirmed its desire to relocate the production of its products to Vietnam.
42% of Japanese tech companies have started a transition
According to the Kyodo News poll of 96 Japanese tech companies, 42% said they have already left or are about to leave China. Large Japanese companies want to diversify their supply chains by setting up in India or in some Southeast Asian countries like Vietnam or Indonesia. Among the companies surveyed, we find Canon, Toyota, NEC and even Mitsubishi.
In addition to this major logistical change, 59% of the companies surveyed stated that they had introduced strict rules to ensure respect for human rights in their factories. This has not always been the case in China … Now, new standards determine whether or not a product is made under forced labor conditions. An important decision, especially as we know that multinational companies have signed agreements with Chinese factories suspected of imposing forced labor on the Uyghurs. One of Apple’s main suppliers in China would be affected.