Japanese Companies Assess Cost of Decoupling From China’s Supply Chain
More Japanese companies are considering weaning themselves from Chinese supply chains after more than 2,000 of them have withdrawn from China since COVID-19.
Some 26 percent of Japan’s total imports came from China in 2020, and while Japan may still have close economic ties with China, tensions between Washington and Beijing amid international tensions have forced Japanese companies to start considering the risks involved.
Japanese auto giant Honda this summer began a major supply chain restructuring project to explore the possibility of manufacturing passenger cars and motorcycles with as few Chinese-made parts as possible, Nikkei Asia reported.
The company is estimating sourcing costs from other regions, such as Southeast Asia. According to the report, Honda is currently not advocating decoupling from China, but it is drawing up emergency plans for associated risks for example in the case of military conflict over Taiwan….