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Japan Shifts Production From China

The Japanese government is seeking to move its manufactures supply chains out of People's Republic of China. According to the Ministry of Finance, nearly $2.2 billion of the governments economic stimulus package is intended to help firms move production out of China to Japan, and 23.5 trillion yen is intended to help those relocating to stronger allies of Japan. Usually, China is Japan's largest trading partner, but due to COVID-19, imports fell by nearly 50%. With factories and producers closed as a result of the virus, Japanese firms were unable to continue production of vital products.

The provision supporting movement away from China in the economic stimulus package is the result of the growing realization in Japan of their reliance on China. In March, a government panel on future development highlighted the need for manufacturing of high-value products to be shifted back to Japan, and for production of other goods to be diversified across Southeast Asia.

Although tensions between China and Japan have warmed recently, some fear hostilities could flare between the two nations as a result of this action. In 2012, Japan and China nearly plunged into conflict over conflicting claims on the Senkaku Islands in the East China Sea. In response to the move by the Japanese government, the Chinese government sent four naval ships through what Japan sees as its territorial waters on April 8, 2020, sparking a sharp rebuke from Tokyo.

Senkaku Islands; East China Sea

The views expressed are those of the author and do not reflect the official policy or position of the United States Army, Department of Defense, or the United States Government.


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