Japan Announced 87 ‘China Exit’ Subsidies

Japan’s Ministry of Economy, Trade and Industry on Friday July 17th released a list of the first group of Japanese companies to be subsidized by the government to move production from China to other Southeast Asian countries or Japan.

The first 87 companies or industry groups will receive a total of ¥70 billion ($653 million) to relocate production lines to reduce Japan’s economic dependence on its large neighbor and build sustainable, China-independent supply chains.

Thirty companies will relocate production to Southeast Asia, including hard drive manufacturer Hoya Corporation, which is moving its factories simultaneously to Vietnam and Laos.

Sumitomo Rubber Industries will now manufacture nitrile rubber gloves in Malaysia, and Shin-Etsu Chemical will relocate rare earth magnet production to Vietnam.

The remaining 57 enterprises from the ministerial list will be transferred directly to Japan.

For example, household goods maker Iris Ohyama currently buys nonwovens from Chinese companies and makes face masks from them at Chinese factories in the port city of Dalian in Liaoning province and in the Suzhou city district west of Shanghai.

Thanks to the subsidies, the company will begin manufacturing face masks at its plant in Kakuda at its home base in Miyagi Prefecture in northern Japan. All necessary materials will be produced on the spot, regardless of foreign suppliers.

Hygiene products manufacturer Saraya, whose product range now includes highly sought-after alcohol-based disinfectants, also received the same subsidy.