COVID-19 Impact: Japan And US Companies Are Shifting Their Production Out Of China
Reports in March revealed major US tech giants who have their manufacturing facilities in China -- companies like Apple, Microsoft, Google are looking at moving their manufacturing facilities out of there to other potential countries that would offer skilled workforce for cheap. And now even Japan is joining the bandwagon.
The COVID-19 coronavirus that started in a small market in Wuhan has drastically affected our world today.
It has affected and continuous to impact our way of life in ways we can't even imagine, beyond our current lockdown existence.
Reuters
Economies have lost billions of dollars, companies across the globe are incurring losses -- people aren¡¯t happy with China. So much so, that companies are working on moving out of China.
An exodus out of China?
Reports in March revealed major US tech giants who have their manufacturing facilities in China -- companies like Apple, Microsoft, Google are looking at moving their manufacturing facilities out of there to other potential countries that would offer skilled workforce for cheap.
And now, recent reports have revealed Japan is joining this bandwagon. Reported first by The Japan Times, the Japanese government has announced that they¡¯re ready to spend over $2 billion to help its country's firms move production out of China.
Various Japanese giants experienced grave shortages of stocks when the COVID-19 pandemic shut down manufacturing facilities across the country.
Last month, Japanese authorities discussed the idea of shifting the manufacturing of high-added-value products back to Japan, and for production of other goods to be spread across Southeast Asia.
AFP
Where would the production go?
Cheap labour and access to raw materials are few of the reasons why companies across the world prefer China. However, kicking China out of the equation, they can¡¯t go and produce the goods in the US as it¡¯ll be too expensive to produce.
Companies have a handful of countries to look at, for meeting their production needs -- Thailand, Vietnam, India, to name a few. We¡¯ve been seeing Samsung ramp up its production in Vietnam. Even in India, Samsung established its largest smartphone manufacturing facility in Noida.
Brands like Apple have also started manufacturing its iPhone XRs in India that have not only been taking care of local as well as global demands.
