Japan to Pay Companies to Leave China, Relocate Production over Coronavirus

Japanese Prime Minister Shinzo Abe, center, declares a state of emergency during a meeting of the task force against the coronavirus at the his official residence in Tokyo, Tuesday, April 7, 2020. Abe declared a state of emergency for Tokyo and six other prefectures to ramp up defenses against the …
Franck Robichon/Pool Photo via AP

Japan is paying its companies to leave China and relocate production elsewhere as part of a stimulus deal in response to the Chinese coronavirus.

Japan has earmarked more than $2 billion of the nation’s economic stimulus package to assist its companies in moving out of China to relocate production, according to a report on Thursday by the South China Morning Post.

The move appears to be in response to the Chinese coronavirus, which has been plaguing the globe and has killed over 100,000 people around the world at the time of publishing, according to the latest data compiled by Johns Hopkins University.

The report added that Chinese dictator Xi Jinping was supposed to visit Japan early this month, but the visit was postponed last month due to the proliferation of the virus — and no new date has been set.

“There will be something of a shift,” said Shinichi Seki, an economist at the Japan Research Institute, adding that some Japanese companies located in China were already considering leaving.

“Having this in the budget will definitely provide an impetus,” Seki added.

China has been Japan’s biggest trading partner, according to SCMP, but imports from China declined by almost half in February as the novel coronavirus — originating in Wuhan, central China — caused Japanese manufacturers in China to close.

The report added that a February survey by Tokyo Shoko Research found that 37 percent of the more than 2,600 companies that responded to Japan’s stimulus proposal were already looking at locations other than China due to the coronavirus pandemic.

Time will tell how this new stimulus deal will affect Japanese Prime Minister Shinzo Abe’s previous efforts to restore Japan’s relationship with China.

You can follow Alana Mastrangelo on Twitter at @ARmastrangelo, and on Instagram.

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