Sony wants to remove its factory of making cameras, projectors, and video game PlayStations from China to another country.
Not only Sony, but also Toyota Boshoku Corporation, a Japanese automaker that manufactures auto parts, and giant companies such as the electronic giant Sharp and Panasonic, the watch manufacturers Seiko and Casio, are interested in moving the factory from China.
Japan has set up a $2.2 billion fund to remove factories from China. Japanese companies that will move their factories from China will be supported by this fund. 34 Japanese companies have already expressed interest in moving their factories from China to other countries. Sony and Toyota are already starting to transfers factory from China.
Since 2008, Japanese brands are alongside China. They were advancing with the aim of selling their products and setting up factories in other countries.
But, of the U.S. and China trade war, when the U.S. market imposed a 25 percent tariff on the Chinese market and in the epidemic caused by the coronavirus, the Japanese aim to reduce their dependence on China for security and strategic reasons. On the other hand, the Trump administration of the United States is also applying a lot of pressure to remove the factory from China.
U.S. pharmaceutical companies are desperate to reduce their dependence on China. The US administration is also active in this regard. On April 25, US President Donald Trump spoke by telephone with Indonesian President Joko Widodo. Since then, Indonesia has been preparing 4,000 hectares of land in Java for setting up factories. Most of US pharmaceutical companies based in China are expected to relocate to Indonesia.
An explanation of why the Japanese want to reduce their dependence on China can be found in an article by Mercy A. Cuero, vice president of Pamir Consulting LLC in the United States. In an article published in Diplomat Magazine on May 5, he noted that many Japanese companies have to rely entirely on China to deliver goods that are important to the world and to Japan in terms of urgency and security. He further writes that coronavirus is explaining to us how much dependence on one country can create a crisis.
Most of analysts say the coronavirus will no longer have factories in China or the rest of the world. The big companies will keep part of the production in China and move the rest to other Asian countries. In that case, the companies will set up their factories in developed countries of Asia like Bangladesh, Thailand, Indonesia, Taiwan, Philippines, India, Malaysia, Vietnam, and Singapore.
The coronavirus outbreak was in China at the time. On March 1, a report in the famous American magazine ‘Forbes’ said that China is no longer cheap. If Trump is elected for a second term, companies will be forced to think about what will happen. if the US trade agreement with China fails.
The Nikkei Asian Review of Japan reported on April 16 that the Chinese Communist Party was concerned about the “exodus” of investors from China led by Japan.
Mazda Motors, a car parts manufacturer, wants to move to Mexico. Honda supplier Kasai Kogio wants to go to North America or Europe. Rico Corporation, a manufacturer of printers and photocopiers, wants to move to Thailand. Sharp wants to go to Vietnam or Taiwan. Seiko and Casio want to go to Thailand or return to Japan. Toyota is keen to take its parts manufacturing plant to Japan or Thailand.