Japan wants manufacturing back, but breaking up supply chains is hard to do

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There are many countries and corporations that have concluded, since the onset of the coronavirus pandemic, that they need to diversify their supply chains, particularly feeling over-reliant on Chinese production. There are, perhaps, few that have felt it so keenly as Japan and its major manufacturers. Prime minister Shinzo Abe has subsequently drawn up a $2bn assistance package to help manufacturers shift production to Japan. But, according to Reuters, it is proving easier said than done, as the Chinese and Japanese markets have become increasingly interwoven over the past two decades: “Japanese firms say shifting output back home is simply impractical and uneconomical. They need to be physically present in China because much of what they are making is ultimately for the Chinese consumer, and to meet the demands of just-in-time production, which prioritises short delivery times for efficient manufacturing.”