Coronavirus: Tokyo pays for its businesses to leave China

The incentive is part of the $ 989 billion stimulus launched to avoid a recession. The government is also pushing to move production from China to Southeast Asia. The Japanese aim to reduce dependence on the Chinese market. Problems for future relations between the two countries. The World Trade Organization (WTO) has calculated that world trade will collapse between 13 and 32% in 2020 on the back of the coronavirus epidemic.


Tokyo (AsiaNews / Agencies) - Japan will spend 2.2 billion dollars to bring companies that have their production centers in China home. The measure is part of the massive 989-billion-dollar financial stimulus that the Japanese government announced on April 7 to combat the recessionary effects of the pandemic crisis.

A portion of this sum (220 million dollars) is intended to help Japanese companies to move production from China to other countries, especially in Southeast Asia.

Japanese companies depend heavily on the import of components made in China, from where the coronavirus spread. The Chinese economy is an essential element of the global goods chain, which effectively collapsed after Beijing closed down production to contain the spread of Covid-19.

Like other advanced economies, Japan is likely to end in recession this year. The World Trade Organization (WTO) has calculated that world trade will drop by between 13 and 32% in 2020 due to the pulmonary epidemic. In the worst case scenario, Asian exports will drop by 36%; imports by 31.5%. The WTO estimates that the GDP of Asian countries will drop by 0.7 in the best case, and by 7.1% in the worst case scenario.

Before the outbreak of the pandemic, many Japanese companies were already considering closing their businesses in China. They feared falling victim to the trade war between Washington and Beijing. This trend will now accelerate. According to Tokyo Shoko Research, about a thousand Japanese companies began to diversify the purchase of components for their production in February, abandoning Chinese suppliers.

The flight of Japanese companies from China will not help relations between Tokyo and Beijing, already marred by territorial disputes in the East China Sea. A summit between Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, scheduled for this month, was postponed due to the coronavirus.