Japan will launch a subsidy programme to encourage domestic manufacturers to transfer their overseas production bases to Southeast Asia, as the coronavirus pandemic has greatly disrupted their supply chains heavily dependent on China.



Japanese office workers walk on a street in front of the Bank of Japan headquarters in Tokyo. (Photo: Reuters)

 Japan will launch a subsidy programme to encourage domestic manufacturers to transfer their overseas production bases to Southeast Asia, as the coronavirus pandemic has greatly disrupted their supply chains heavily dependent on China.

The 23.5 billion yen (220 million USD) programme, incorporated into the government's emergency stimulus package to ease the economic fallout from the pandemic, will help firms diversify their supply chains by financially assisting the construction of production facilities as well as feasibility studies in ASEAN countries, Japan’s Kyodo news reported.

The initiative came after many automakers and other manufacturers suffered a shortage of parts produced in China after the new coronavirus outbreak started late last year in the central Chinese city of Wuhan.

In another effort to reinforce supply chains, the Japanese government will spend 220 billion yen to promote domestic output of items that are currently heavily imported from certain areas. Also included in the stimulus, the subsidies will financially support the relocation of Japanese firms' overseas production sites back home.

The programme will also target manufacturers of items essential for Japanese people to "lead a healthy life" amid the outbreak, including face masks and alcohol sanitizers. They can receive subsidies when they newly open factories or boost their existing output capacity in Japan./.


                                  Source: VNA

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