SL luring firms leaving China

Amongst all the things the pandemic has done to make this world crazy, it showed that nations are over- reliant on China for everything from coriander to Chrysler.

While US firms are said to be re-thinking their dependence on the country with some having already left China, the Japanese government is jumping on the bandwagon of a mass exodus from China. Japan gave US $ 2.3 billion to reform supply chains — including money - to aid firms in bringing production back to Japan or moving it to Southeast Asia. More than 690 Japanese companies have investments in China. It is reported that 34 of those, including Sony, Toyota Boshoku, S h a r p and Panasonic, have already shown interest in shifting their factories, according to foreign newspaper reports.

“We have got quite a few inquiries by firms trying to shift base from China,” Sanjaya Mohottala, Director General Board of Investment told the Business Times. Even at the height of the Sino-US trade war ( when US President Donald Trump clamped 15 per cent tariffs on $300 billion in consumer goods imported from China) its appeal as a manufacturing hub for US businesses is still there, he said noting that it’s important to attract those who have taken a decision to shift.

He said the Japanese firms will eye India, Sri Lanka, Thailand and Indonesia.

Apple is considering moving about 20 per cent of its iPhone production capacity to India because of the massive supply chain disruption that has broken the back of the manufacturing ecosystem of China.

South Korean fir ms like Hyundai Steel, Lotte, KIA, and several other companies too are reported to be relocating their manufacturing facilities from China to India. Indonesia reportedly cleared up 4,000 hectares of land in Central Java to accommodate US companies planning to relocate from China. The Bangladesh Economic Zones Authority (Beza) hired Sumitomo Corporation of Japan as a consultant to persuade the Japanese companies in coming to Bangladesh.

After creating the profiles of the companies, the Bangladesh Embassy in Japan will meet those companies and try to motivate them to invest in Bangladesh, it was reported.

For European businesses, COVID19 has been a ‘wake-up call’ of the need to guarantee they can source supplies from multiple countries.

According to Mr. Mohottala, Sri Lanka ranks on top as a sourcing destination. "There's a big push we're giving in terms of the fabric parks we're constructing in this regard." (DEC)