JAPAN TO FUND FIRMS TO SHIFT PRODUCTION OUT OF CHINA
                     JAPAN TO FUND FIRMS TO SHIFT 
PRODUCTION OUT OF CHINA
INTRODUCTION
• Japanese manufacturers will now be eligible for 
subsidies if they shift production out of China to 
India or Bangladesh.
• This is an expansion of a government program 
aimed at diversifying the country's supply chains.
Source: Asian Review
AIM OF THE PROGRAM 
• By expanding the scope of the subsidy program, 
Japan aims to reduce its dependence on a 
particular region.
• Japan also aims to build a system which can 
provide a stable supply of medical materials and 
electronic components even in an emergency.
Source: mainichi.jp
FUND ALLOCATION
• The government has allocated 23.5 billion yen 
($221 million) in 2020 supplemental budget for the 
subsidy.
• This is to encourage companies to disperse their 
manufacturing sites across ASEAN region.
Source: SME Magazine
SUBSIDIES
• In the first round of application the Japanese 
government approved 30 manufacturing projects.
•  This includes Hoya's manufacturing of electronic 
components project in Vietnam and Laos and 
provided subsidies of 10 billion yen.
Source: Asian Review
ASEAN-JAPAN SUPPLY CHAIN
• Projects will contribute to the resilience of the 
ASEAN-Japan supply chain were added to the list, 
assuming relocation plans to India and Bangladesh.
Source: Oracle Blogs
SCOPE OF IMPROVEMENT
• The application targets feasibility studies on 
– Decentralizing manufacturing sites
– The experimental introduction of facilities
– Implementation of model projects
Source: The Wall Street Journal
COVID-19 IMPACT
• The supply chain of Japanese companies currently 
heavily relies on China. 
• During the COVID-19 pandemic, the supplies were 
cut off.
• Hence the Japanese government has decided to 
initiate diversified supply chain.
Source: Pharmaceutical Technology
BUDGET
• The Japanese government's supplementary budget 
for FY20 reserved 23.5 billion yen for the 
businesses that want to move their production to 
Southeast Asian nations. 
Source: The Economic Times
IT TIE-UPS IN INDIA
• In extending a subsidy package , 10 Japanese firms 
are going to invest in IT tie-ups in India, Tokyo has 
made India and Bangladesh part of a larger subsidy 
programme.
Source: Five Hundo
JAPANESE BUSINESS IN CHINA
• There are over 31,000 Japanese business 
establishments in China compared with just about 
5,100 in India. 
• Several Japanese companies in China are keen to 
relocate due to the growing economic uncertainty 
in that country post Covid-19 pandemic.
Source: CNBC.com
THANK YOU