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Japanese firms shift focus to Southeast Asia due to U.S.-China dispute: JETRO

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Of course blame it on America. I’m sure it has nothing to do with COVID-19 or the fact that China is building its presence around Japanese islands or the fact that Japanese no longer want to travel to China for business because of the health risks. Nope. America’s fault.

-14 ( +4 / -18 )

I believe the survey mentioned "escalating tensions between Beijing and Washington"; and "an intensified confrontation between the United States and China"

It didn't say it was only America's fault.

12 ( +15 / -3 )

America’s dictate that “you are either us or against us” is destroying economies of all all its friends.

-2 ( +8 / -10 )

Really promising news. Good to hear Japanese companies are following the Abe Cabinets advice to exit Communist China.

Thailand produces a huge number of Japanese vehicles already - Toyota, Isuzu, Nissan, Mitsubishi, Mazda etc, and could produce millions more. Vietnam is attractive since the labor costs are even cheaper. Win-win for Japanese companies, and a huge economic hit to Communist China.

12 ( +14 / -2 )

The poster was probably only acknowledging that the escalating tension was due primarily to America so feels they're the same thing

2 ( +2 / -0 )

since1981Today  06:40 am JST

Of course blame it on America

There is no "blame" on the U.S. The current tensions between the US and China is just one factor among several for all nations to consider shifting away from operating in China.

4 ( +7 / -3 )

Good news.

Shifting and expanding business to Southeast Asia might bring more suitable result in security (Confidential communication).

4 ( +5 / -1 )

The Japanese companies spent much of the 1990s and the early 2000s investing in China, the government sponsored anti-Japanese demonstrations across China gave them the first hint that putting their eggs in the China basket was a mistake.

Thailand and Vietnam offer relatively stable and cost-effective manufacturing bases, the 2020s should see a shift towards these countries.

China's golden age is over and its time to change course.

7 ( +7 / -0 )

Japan is just trying to keep the spotlight OFF Japan(China-US tension etc) somewhat while making the changes, which I AGREE with, rather than saying its becuase of the Senakaku's, imprisoning Japanese in China on ""spying"" charges etc etc

1 ( +1 / -0 )

Disengage from China. That’s becoming a global trend. Any company that’s doing business in the evil empire is evil.

2 ( +3 / -1 )

There’s no ironclad rule that says everything MUST be made in China. If economic and/or political considerations change, business can and look to take their operations to other countries.

(Due to the huge Chinese domestic market, some operations will still no doubt need to be there, but I hope that you get my point.)

3 ( +3 / -0 )

borschtToday  07:39 am JST

I believe the survey mentioned "escalating tensions between Beijing and Washington"; and "an intensified confrontation between the United States and China"

It didn't say it was only America's fault.

Says it clearly in the title; Japanese firms shift focus to Southeast Asia due to U.S.-China dispute

-1 ( +1 / -2 )

It is only America that can do without trading with China.

-3 ( +1 / -4 )

Companies have been placing 'too many eggs in one basket" when it comes to China for too long. It makes a heck of a lot of sense to diversify in light of the events of the last few years,

China's recent bullying of other countries has won it no favours.

3 ( +3 / -0 )

Japanese companies wanted to diversify away from China a long time ago. I have worked with Japanese companies for many years in Japan and I hear the same thing about theft of IP and trade secrets and the dread of traveling to China. However, many companies could not diversify without losing cost competitiveness. In that sense the trade war between the US and China and the coronavirus has given Japanese companies cover to make the necessary changes and I think they are more than happy to do so. Anecdotally I hear Japanese salarymen are happy with transfers to Thailand (for obvious reasons), Vietnam, Malaysia and other such countries except China.

3 ( +3 / -0 )

Instead of shifting production line to southeast Asia, why don't they directly shift to the US? That's what Trump really hope, and the answers are probably what the US really need to sort out. As of those southeastern countries, most of them might be fine, but forget about Vietnam and Indonesia who are not quite safe for investors!

0 ( +0 / -0 )

Instead of shifting production line to southeast Asia, why don't they directly shift to the US? That's what Trump really hope, and the answers are probably what the US really need to sort out. 

Exactly right. You may have seen recent large investments by auto manufacturers in the US such as Alabama. Also, Mexico is becoming a manufacturing hub for products for the NAFTA market. Mexico is gaining a lot and hopefully can reform its government and raise the standard of living of its people. I am optimistic.

0 ( +0 / -0 )

yosunToday  01:16 pm JST

Instead of shifting production line to southeast Asia, why don't they directly shift to the US? That's what Trump really hope, and the answers are probably what the US really need to sort out. As of those southeastern countries, most of them might be fine, but forget about Vietnam and Indonesia who are not quite safe for investors!

It depends on what exactly you are manufacturing. Some high value products with low labor requirements can be moved to the US and developed countries more easily than others.

Products like cellphones (a lot of labour), clothing (low cost high labour), and white ware (big boxes and high shipping costs) are a bit more difficult.

0 ( +0 / -0 )

It is a wise move for Japan since it is tied to the US and has to acquiesce to the US pressure; for example, when Trump bans Tik Tok, Japan would feel it'd be going against its boss if it didn't ban the popular video platform as well. Anything less than "hai, wakarimashita" makes security discussions between Japan and the US more challenging. Abe not visiting Yasukuni is another example. It is only after the US expresses disappointment that he stops visiting. European countries however are not in the same situation.

Germany's major metropolis Frankfurt has officially extended invitation to TikTok to set up the popular video platform's new European headquarters in the city last week. Mayor Peter Feldmann has extended an invitation for talks to TikTok's board of directors. But how can this be? Trump says no to Tik Tok.

Frankfurt boasts large computing capacities, the world's largest internet exchange DE-CIX, a vast pool of trained professionals, the letter said, adding "All of the above makes the city an ideal location for IT companies, especially for TikTok's international headquarters." Aren't the Germans worried about Tik Tok and the CCCP?

Japan needs to look out for its own interests and not that of the US. This means it needs to play both the US and China like a fiddle for the unique angle it holds. Security-Alliance with the US makes Japan respectable with China. Even with the alliance you have Senkakaku encroachment; imagine what it would be like without the US?

Trade with China will send the message that the US is not the only market Japan sends its exports. Trade with China also means better relations and lower defensive needs resulting in fewer contracts with the US defense industry. Being a player may go against the Japanese mindset as part of it is the "loyal samurai" complex or the "subordinate to the US" mindset, but is necessary for Japan to be more independent and a self-respecting nation.

1 ( +1 / -0 )

Japanese firms shift focus to Southeast Asia due to U.S.-China dispute

So why don't US companies move manufacturing to SE Asian countries or India? It depends on what you're making and if you're a small supplier or a large manufacturer but the answer is China is a huge market. In economic terms it is 4 times as large as India. If companies move out, they lose the advantage of being a local business. There are several advantages in being located in China if you are trying to sell to Chinese consumers: Lower logistic costs, lower labor costs, access to manufacturing clusters, and preferential tax structure.

Manufacturing costs in China are much lower and it will be terrible business to start a costly and possibly ruinous move to shift manufacturing and rebuild entire supply chain from scratch in another country. If you're a consumer, well then yes, China's a meanie, let's buy somewhere else. If you are in manufacturing, there is no discussion. Scales matter.

The world's busiest train station (passenger) is Shinjuku station where some 3.5 million people go through each day. Let's move out of China is like saying let's stop using trains and find other means (taxis, cars, bicycles, on foot) of transporting all these people. You can but you'll be far from optimization.

In the end, wherever you may manufacture, you would still want to sell the products you have made unless you've also decided not to sell to the Chinese and give up that market of 800 million and growing middle class for geopolitical reasons. It does not make sense to manufacture in Mexico, US, Vietnam, and Thailand and then to sell and ship your products to China when you are already in China.

The Japanese companies that go to China are going for world dominance like Toyota, Honda, Sony, Panasonic, etc. They must go to China if they are serious International players, and they will fight for market share and never leave unless they cannot win. Multinationals don't want to leave. Tesla goes into China and their share prices climb the Great Wall with investments in Shanghai. General Motors would have gone bankrupt if not for their investments in China.

There will be some Japanese companies moving out of China, but Japan Inc will continue to be in China if it wants to compete globally. With its economy, Japan can't afford not to be in China.

2 ( +2 / -0 )

I did a quick google, Vietnam is still a communist country, Socialist Republic of Vietnam.

why the double standards?

3 ( +3 / -0 )

Really promising news. Good to hear Japanese companies are following the Abe Cabinets advice to exit Communist China.

Vietnam is attractive since the labor costs are even cheaper. Win-win for Japanese companies, and a huge economic hit to Communist China.

to be more coherent, either use communist china and communist vietnam, or just china and vietnam.

 Aren't the Germans worried about Tik Tok and the CCCP?

cccp refers to the former soviet union ?

1 ( +1 / -0 )

Really promising news. Good to hear Japanese companies are following the Abe Cabinets advice to exit Communist China.

Japan has already A LARGE TRANS-FACTORIES foothold here in Southeast Asia.

Automotive vehicle & parts manufacturing, semiconductor, machinery, material...you name it. Of course, many advanced & high tech parts e.g. industrial robot gear parts, sensor are still mostly made in Japan.

0 ( +0 / -0 )

In the end, wherever you may manufacture, you would still want to sell the products you have made unless you've also decided not to sell to the Chinese and give up that market of 800 million and growing middle class for geopolitical reasons. It does not make sense to manufacture in Mexico, US, Vietnam, and Thailand and then to sell and ship your products to China when you are already in China.

That doesn't explain Japanese appliance manufacturers like Panasonic or Sharp moving production of 100 volt products some nowhere else but Japan from Japan to China over the past eight to ten years. It likewise doesn't explain moving manufacturing of products sold only in North America from Mexico to China.

0 ( +0 / -0 )

That should say "100 volt products sold nowhere else but Japan. Apologies for the mistake.

0 ( +0 / -0 )

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