Japanese companies relocating from China to India, Bangladesh to get Japan govt’s subsidy
The Japanese government has said that it will provide subsidies to Japanese companies that shift their manufacturing setup from China to India, Bangladesh and ASEAN Countries. This comes as the world’s supply chain was disrupted after the outbreak of COVID-19 which originated in China. The countries have now started mulling on options to either exit from China or at least reduce their dependence on it with respect to trade or other procurements.
Japan too aims to decentralise its supply chain by reducing its dependence on a particular country for medical and well as electronic components supply. The Japanese government has allocated 23.5 billion yen in the 2020 supplemental budget for the subsidy to encourage companies to disperse their manufacturing sites across the ASEAN region.
Besides the COVID-19 pandemic, China has also been criticised in the international community over its imposition of draconian national security law in Hong Kong, in turn threatening the autonomy of the trade city.
ASEAN countries, Australia, India, Japan and the US have moved against China for its aggression in the South China Sea.