Japan Firms Exodus China

Sagar Media Inc: 28 August 2018 : Gold accumulation on rise to standoff with dollar in big way cementing economies for China, Russia, Iran, Turkey and thus prices of Gold to shoot in coming days and months in years to come.The price of gold has increased in Pakistan owing to a rise in the international market.The President of the Sarafa (Jewelry) Bazaar Association, surge in Gold the per tola (11.33 grams) had risen by Rs2,000 to Rs58,300. The price for ten grams rose by Rs17,500 to Rs49,983.The per tola price of silver also increased in the country by Rs10 and was now being sold at Rs800. Trade wars may benefit as market economy as shell deal with US help India CNG .US Canada FTA to surge UK face deflation.German France to do well with India China consumptive..Greece back on rail.Turkey in despair with US stifle so is Iran, China Russia.

Chinese totalitarian government has an edge on the democracies with total control of powers within their arms and can squeeze the native, foreign citizen at their whims is also put Chinese companies at logger hood with their counterparts developed state in Europe, Asia and Africa or Latin American continents. Moderate and small nation finding business with China inimical to their trade ethics and business acumen.

China’s mastery on high tech will  throw out multinational big name of US so the US president being an astute businessmen was compelled to adhere such trade wars how far Europe toe the line of China is another major business challenge for splintering Europe on many issue need to consolidate its business, security or defense stance separately, apparently.

China has another advantage to its domestic consumptive market surge in  growth with advent of  China’s burgeoning middle class, Maine Coast enjoyed Chinese demand that rose between 20% and 30% annually. The company had just finished a $1.5 million plant expansion when the good times came to an abrupt halt. China has emerged leader in building artificial island which has been observed by various satellite observatories

Japan firms quietly leaving, China on various factors the law in China not enforceable on IPR, copying rights and quality and international standards. China has achieved high tech edge and is thus likely to suffer less with his business being spread across continents, but the quantum of business shall be on downturn.

With China export decelerating and trade war surge with US is making the Japanese firms which are present in large numbers to the tune of 80Ks are retreating their footprints from China to back home or looking for opportunities elsewhere, Vietnam, India, South Asian countries and some making in roads to US. Triads activities unchecked, the foreigners are finding diminishing hospitality is another cause of concerns to Japanese firms.

China from the humble stance of an investment is  going tough on foreign investment with imposing only 50% of foreign Investment in China is also making Japanese Companies  on to exodus.

Japanese companies are shifting production away from China to defend themselves against higher U.S. tariffs targeting Beijing as the growing trade war begins to have an impact on global supply chains.

Many overseas units for these companies make products and components exported to a third country, like the U.S. But Washington enacted a 25% tariff on $16 billion in Chinese goods Thursday, drawing a reciprocal response from Beijing. The U.S. also is considering a blanket duty on cars and autoparts, forcing companies to rethink their supply chains.

Asahi Kasei relocated production of U.S.-bound plastic material from China to a plant in Japan. The material, used in car gears and other autoparts, was among the products targeted by Thursday’s tariffs.

Japanese companies generate $218 billion in revenue from overseas production sold outside of Japan or that country of origin. China accounts for $26 billion of the total, according to a survey by Japan’s Ministry of Economy, Trade and Industry.

Komatsu will tap facilities in the U.S., Japan and Mexico to produce certain parts for hydraulic excavators assembled in America. These parts currently are made in China.

The planned change will cost Komatsu an extra 4 billion yen ($36 million) a year.

Iris Ohyama plans to move manufacturing of air purifiers, electric fans and other appliances for the American market to a new plant in South Korea slated for completion next year. These products have yet to be included in Washington’s list of enacted or planned tariffs against China, but the company is taking precautions.

Asahi, Komatsu and Iris Ohyama could tap their existing supply chains, but companies are unlikely to plan new investments in response to the trade war given the uncertainties over its duration and severity. For example, a new auto plant requires meticulous planning and costs about 100 billion yen, not including whatever investments its suppliers would need to make.

Some companies are seeking exceptions to the tariffs, arguing they have no alternative. Japan Steel Works is applying for an exemption from duties on steel it uses to make bearings in the U.S. But the screening process is understaffed and faces delays.

Shifting production away from China also entails political risks in that market.”If we announce without first going through the appropriate channels that we expect exports to fall, we can offend local government officials,” said a chief executive of a Japanese company unit there. This manufacturer also has shifted some output to Japan, but has not made the details public.

U.S. imported roughly $500 billion worth of Chinese goods in 2017, China only took in about $130 billion. Even one round of tit-for-tat tariffs will paralyze exports in both directions. The first casualty of that phenomenon is the interruption of U.S. exports to China.

Tom Adams, founder and CEO of Maine Coast, a lobster distributor in the U.S. East Coast state, will never forget the moment when China authorized tariffs on the seafood on June 16. “I was at home, and it was a blow in the first day,” he said

Thanks to China’s burgeoning middle class, Maine Coast enjoyed Chinese demand that rose between 20% and 30% annually. The company had just finished a $1.5 million plant expansion when the good times came to an abrupt halt.

“July 1 was when [Chinese] customers started holding off buying from us. Completely ceased,” said Adams. The company has set lofty sales projections and “a big part of that growth expectation is China,” he added.

Another Victim is the American soybean farmer. China imported roughly 96 million tons of soybeans last year, making it the largest importer of the commodity. China only produces about 15 million tons of soybeans domestically, illustrating its dependence on imports.

The U.S. is China’s second-biggest source of soybeans at 34% of the imports, after Brazil, which ships 53%. The staple is used to make cooking oil and seasoning, and soybean meal is found in pig feed.

China could expand soybean imports from Brazil or Russia, but even those options would not be enough. At the end of the day, the Chinese will have to meet demand with U.S. soybeans with the tariffs in place, and pass the extra costs to consumers.

The price hikes will hurt ordinary citizens — something the one-party state seems to recognize. A state media outlet went as far as to say Chinese will “gladly” accept a temporary setback, which sparked online “flaming” of government officials on China’s highly regulated internet.

After being slapped with a U.S. import ban in April, ZTE was left unable to produce smartphones and telecommunications equipment, which nearly drove it out of business.

The trade war has grim implications for Chinese employees as well, since the country sits in the middle of the global supply chain. Components and intermediates from Japan, South Korea and elsewhere are pieced together at the “world’s factory,” which ships out end products to America.

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