Japan’s cabinet has offered huge sums of money this year to subsidize companies to pull out of China, resulting in applications that far exceed the government’s original budget by 11 times. Kyodo News earlier released the results of a survey in which 42 of 96 major listed companies with sensitive technologies said they have shifted or are considering pulling their supply chains out of China and relocating to India and Southeast Asian countries.
Kyodo News earlier surveyed 150 listed companies identified by The Japanese government as having sensitive technologies, including Toyota Motor, KDDI, NEC, Kobe Steel and Mitsubishi Heavy Industries Ltd, and 96 responded. Of those responding, 44% said they were shifting their manufacturing bases and sources of parts supply from China in order to diversify their supply chains. Three of these companies have or will downsize their operations or exit China, and eight are considering moving their manufacturing bases back to Japan to avoid China-related risks.
Fifty-nine percent of these companies are beginning to determine whether their production in China involves forced labor. Because of the Communist Party’s forced labor of Uighurs and other ethnic minorities, multinational companies can easily become accomplices when working with Chinese factories.
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