business

Japanese firms weigh production shift out of China as virus wreaks havoc

32 Comments
By Junko Horiuchi

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32 Comments
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Doing the right thing for the wrong reason. Western countries should de-couple themselves from the Chinese dictatorship, and not only because of a virus.

21 ( +26 / -5 )

Long-term, shifting production to a stable, peaceful, Japan-loving nation like Vietnam - where wages and costs are cheaper than PRC - is a smart move. Far too many risks having so much production in Communist PRC.

9 ( +17 / -8 )

Long-term, shifting production to a stable, peaceful, Japan-loving nation like Vietnam - where wages and costs are cheaper than PRC - is a smart move

Yay to slave wages and zero upward mobility. Yay!!

6 ( +15 / -9 )

*Reallocating production outside of China means *a temporary surge in costs

This is the underlying 'hard pill to swallow' isn't it. I guess companies will have to reduce this year's profit margins down from 10 billion to 8 billion...

10 ( +12 / -2 )

There has always been a 'risk' in basing parts of your supply chain out of China, not least because of political risk. Managers have just been blind to it, just ask Honda, or South Korea's Lotte.

When the Taiwanese are moving out of China, you know things are on the move. The Taiwanese were the original offshore pioneer, it was their money and technical skills that started Chinese manufacturing.

Time to price that risk!

7 ( +10 / -3 )

Those companies shouldn’t have set up plants in China in the first place. They were all blinded by prospects of tapping into the world’s largest market of 1 billion people and moved production to China. Now they are reaping what they sowed.

12 ( +15 / -3 )

Great long long overdue.

8 ( +10 / -2 )

Meiyouwenti, if this happened in your country, the companies will never recover from the disruption. Only China can absorb the hit and recover quickly.

-13 ( +0 / -13 )

China is a country that weighs faith highly. This is a chance Japanese businesses acquire their trust and friendship by remaining in Chinand show support and trust. The epidemic comes to end when it gets warmer.

-10 ( +1 / -11 )

rgcivilian1, can you bet your head on what you said ?

-11 ( +0 / -11 )

Yay to slave wages and zero upward mobility. Yay!!

Relevance? That this why the companies are in China as well, lower wages and manufacturing costs. Why would mobility be important to people who have been trained to accept a life is based on a hierarchy?

0 ( +2 / -2 )

China is the only 100% industrialized country on the planet of earth, Moon and Sun. Fact never fake itself.

-18 ( +0 / -18 )

vanityofvanitiesToday  08:51 am JST

China is a country that weighs faith highly. 

No I don't think so. China and Japan signed the Sino-Japanese Treaty of Friendship in 1972, and China even reaffirmed it again in 1978. Yet in 2010 we were watching massive anti-Japan riots in China. China is a country that does whatever it wants to when it's convenient for them. When they make demands they resort to International forums and rules. When the same is done against them, they denounce them and refuse to recognize them. China does not weigh faith heavily, it only weighs subservience heavily.

2 ( +4 / -2 )

If you're allowed yourself to be dependent on China and in the future you'll be screwed by China, you have yourself to blame.

6 ( +8 / -2 )

Japanese people and Japanese govt will fight together with Chinese people and Chinese govt against this virus, 100%. That is the promise by LDP leadership. Innfact, the whole Asians are with China on this.

-10 ( +1 / -11 )

Japanese people and Japanese govt will fight together with Chinese people and Chinese govt against this virus, 100%. That is the promise by LDP leadership. Innfact, the whole Asians are with China on this.

Are you sure? The CCP has got form when it comes to self preservation above all else. Remember whilst the KMT was busy fighting foreign invaders, the CCP was sniping KMT forces, helping foreign invaders take over China.

So, is China going to snipe Japan whilst it fights this virus? Despite China being first to replicate the virus, it refused to share it with the WHO. It was Australian researchers (2nd team to replicate the virus) that shared it with the WHO. Sigh....fight together.

3 ( +3 / -0 )

Bringing production back to Japan could be good for the economy as it's an efficient sector and well paid in comparison to the rest of the jobs available... Minimum wage elevator button pusher, anyone?

3 ( +4 / -1 )

Just look no further than Taiwan.

Thanks for raising Taiwan. As you know it paints China in a very bad light when it refuse to accept Taiwan having representation on the WHO. It says China puts politics before Chinese lives.

This leads to further questions. Why China still has not approved WHO experts to enter China to help fight the virus 'TOGETHER'.

It has been more than two weeks since Tedros visited China...still no expert team on the ground.

In other cases, it's a matter of days...why?

4 ( +4 / -0 )

Long-term, shifting production to a stable, peaceful, Japan-loving nation like Vietnam - where wages and costs are cheaper than PRC - is a smart move. Far too many risks having so much production in Communist PRC.

Last time I checked, Vietnam is still a communist country. No such risk?

1 ( +1 / -0 )

"Far too many risks having so much production in Communist PRC." Because the Vietnamese government isn't communist, and has the same level of respect for human rights and personal liberties as the Chinese?

1 ( +1 / -0 )

@akie: rgcivilian1, can you bet your head on what you said ?

Always have and always will, you want to get facts behind your statement to prove your point as to why its not a great long long overdue. China speaks peace but all it has brought the world is cheap junk that works once or twice or easily breaks if in clothes wear. Why does China have to steal other countries technology if it is that great to include stealing technology even among its own allies. One more point among many, why was China even experimenting with the coronavirus when the rest of the world knew enough to just leave things alone. The lab didn't even have proper protocols in place. Typically that has been proven in many lab releases is lax safety protocols in place. No don't get me wrong I am not against the Chinese people at all but their Government as most Chinese who could would agree as AI even did the CCP is the problem. No human rights or end up locked away forever if dare talk about he CCP. Hence why I will never go to China even if my own life depended on it. If that isn't betting my head on it , then speak your mind.

Now to my other bone to pick on why is Akimoto from the Diet so intent to sell Japan to China. This guy needs to be voted out. Japan is not nor ever will be for sale.

0 ( +1 / -1 )

I try to buy made in Japan only.

But then again, I have not bought anything I do not need. My closets are relatively empty.

I do plan on getting a new iPhone in May however, and I think they are still made there.

Why do people buy things they do not need?

1 ( +1 / -0 )

In an aside, I was shoes shopping on Amazon and kept running across quality control problems when manufacturing moved from wherever to Vietnam.

0 ( +0 / -0 )

Thailand seems like a more stable base for shifting manufacturing to.

Vietnam is still low cost, but communist regimes come with their risks as we saw with China.

An incompetent , dictatorial regime should not be rewarded for their failures and its high time the world realized it.

China is the only 100% industrialized country on the planet of earth, Moon and Sun. 

Sounds like a lie right out of Mao's little red book!!

1 ( +2 / -1 )

They should have left years ago, only now as profits are threatened do they even consider moving. Pretty sad moral compass

2 ( +2 / -0 )

Step One: Only make something in a democracy

Step Two: Only sell in a democracy

Step Three: Consider Value over Price

1 ( +1 / -0 )

Freshmeat:

Last time I checked, Vietnam is still a communist country. No such risk?

Without the imperialistic ambitions aggressions of China though, so much more palatable. I can not think of a country that is currently occupied by Vietnam or that Vietnam lays claim to, can you?

That said, I think Western nations should in principle re-think the relocation of production to cheap labour countries, unless it is made sure that the labour and environmental standards of the source nations are observed. (Take a look at your smartphones while you ponder that).

1 ( +1 / -0 )

Wages in Japan are so low, why don't they move production back here?!!!

4 ( +4 / -0 )

Wages in Japan are so low, why don't they move production back here?!!!

Exactly! The only way to keep your manufacturing secrets to yourself (and not transfer value elsewhere) is to keep it in house, domestically. China knows this.

3 ( +3 / -0 )

Without the imperialistic ambitions aggressions of China though, so much more palatable. I can not think of a country that is currently occupied by Vietnam or that Vietnam lays claim to, can you?

If you ask local Vietnamese, some would say communist Vietnam is no different to communist China. They are all authoritarian, central controlled regime. AND, you can be a democracy but still be centrally controlled by a dynastic emperor like Singapore.

The only reason why Vietnam seems more palatable currently (and I've worked with communist controlled conglomerates in Vietnam), is because unlike China, North Korea, Cambodia, Laos, where it's a dynastic based rule, Vietnam follows the Euro communist model with regular changes to leader via voting by senior members (note, China was also until Xi made himself paramount leader for life).

0 ( +0 / -0 )

Maybe these tough questions would not need to be asked if the warnings of one doctor were not met with threats of arrest.

His name was Li Wenliang. I wonder what the situation would be now and I wonder why China is trying to erase his memory

https://www.vice.com/en_us/article/akwkbz/china-is-erasing-tributes-to-coronavirus-whistleblower-doctor-li-wenliang

This is what should be asked

0 ( +0 / -0 )

@SH1MON M4SADA

The game is fixed in Vietnam exactly the same as China....no different..

0 ( +1 / -1 )

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