Japan eager to lure manufacturing home

Japan eager to lure manufacturing home

Eager to boost the home economy, Japanese Prime Minister ABE Shinzo has set aside some ¥200 billion to help companies onshore manufacturing. The move should help shore up the finances post-pandemic, as well as play to a narrative of reducing dependence on China.

There’s been little interest, which isn’t surprising. Manufacturing is a complex beast, with “making stuff” sat in a web of supply chains, logistics, contracts and more. Moving a production line can take months and years to plan and implement. Money is tight, and even with promises of support, the funds to make it happen aren’t there. It also means moving away from a market eager to buy. 

Longer term more manufacturing could move back to Japan. The call of the homeland can be a strong one, and with a growing network of trade agreements, an attractive one too. This desire will have to be offset against a shrinking workforce, higher corporate taxes and difficulty achieving sustainability goals. Then there’s the draw of Vietnam, Thailand and Indonesia, all eager to lure former Chinese production lines with promises of tax breaks, investment and support.

The months ahead will be interesting ones to watch.

About Ross A Hall

A business researcher and writer, I help companies find new markets, form strategies and build successful businesses.

Find out more about my work.

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