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Opinion | How the coronavirus pandemic could cool China-Japan ties as the US takes a hardline stance
- Japan’s announcement of funding for companies that shift production lines back home marks a step away from its earlier strategy of trying to improve relations with China
- Instead, Japanese Prime Minister Shinzo Abe seems to be anticipating a world in which Japan’s biggest ally, the US, will come down hard on China
Reading Time:3 minutes
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As part of a record economic stimulus of 108 trillion yen (US$989 billion), unveiled in the wake of the coronavirus pandemic, Japan has earmarked 220 billion yen for companies that shift production away from China back to the country and 23.5 billion yen for those seeking to move production lines to other countries.
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This comes even as a nationwide state of emergency has been declared, bringing into sharp focus the growing number of coronavirus cases. Earlier, the government had declared a state of emergency in Tokyo and six other prefectures, but that failed to stem the rising tide.
In January, Japan’s exports to China fell 6.4 per cent year on year, as demand for chemicals, car parts and electronic components originating in Japan declined sharply. In addition, Japanese firms in China have been hit by the US-China trade war, after Washington imposed tariffs on Chinese imports.
Why is the earmarking of 220 billion yen for Japanese companies significant?
It marks a change in the Abe government’s strategy, which until earlier this year had been trying to improve ties with China, with Chinese President Xi Jinping expected to visit Japan in April. It may also jeopardise the China-led Regional Comprehensive Economic Partnership, which Japan has been aggressively promoting.
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