- Japanese electronics giant Toshiba recently announced its departure from China after 30 years of its continued presence in the country.
- Another Japanese company named Oki Electric Industry Company (OKI) is also prepping for executing its China-exit plans to shift its production to Thailand “as part of efforts to focus on competitive products amid a growing paperless trend.”
- These developments signal a worrisome trend for Beijing’s already-plummeting economy—Another Japan-fuelled exodus of foreign companies from China could be around the corner.
Yoshihide Suga is going to end his year-long stint as Japan’s Prime Minister this month; however, China’s economic sufferings at the hands of Japan are far from over. Instead, Suga’s ouster could mark a new beginning in the era of Japan’s unprecedented assault on China’s economy.
For instance, Japanese electronics giant Toshiba recently announced its departure from China after 30 years of its continued presence in the country. The company will cease production at its Dalian facility by the end of September, and the liquidation process will begin next month. Interestingly, then deputy mayor of Liaoning province’s second-largest city Dalian, Bo Xilai, had brought Toshiba to his country back in 1991. The infamous politician is currently serving life in prison for corruption.
“It was becoming difficult to continue operating the base these days following the termination and transfer of production … due to changes in the business structure of Toshiba Group, such as the sale of the TV and medical equipment businesses,” Toshiba Corporation said in a statement to the Post. As per the media reports, about 650 people will immediately lose their jobs owing to Toshiba’s decision of closing down its business in the country.
The company has said that it will cease producing motors and broadcast transmitters and it has no plans of starting up a new production unit in the country.
Read More: Japan is haunting China by leaving its working-population unemployed and Beijing is rattled
Moreover, another Japanese company named Oki Electric Industry Company (OKI) is also preparing for executing its China-exit plans to shift its production to Thailand “as part of efforts to focus on competitive products amid a growing paperless trend.” The company’s Chinese unit named ‘OKI Electric Industry (Shenzhen) Co. will end printer production in Shenzhen, Guangdong Province, next month and OKI Data Manufacturing (Thailand) Co., its Thai arm, will take over production at its plant in the central province of Ayutthaya.
It is not the first time that OKI has dealt a massive blow to the Chinese economy. In December 2020, OKI had stopped production and sales of automatic teller machines in China “amid growing cashless payments in the country.” It moved the production of ATMs for the Japanese market to Japan and output of those for global markets to Vietnam.
These developments signal a worrisome trend for Beijing’s already-plummeting economy—another Japan-fuelled exodus of foreign companies from China could be around the corner. The hints began surfacing in July this year when a Japan–funded survey revealed that more than half of Japanese companies operating in Hong Kong fear CCP’s national security law imposition will have ramifications for a conducive business environment in the China-annexed territory. The survey reflected growing anxiety among Japanese businesses towards Chinese policies.
Only in April last year, Japan had announced a large subsidy programme worth $2 billion for its companies exiting China and relocating production to Japan. Almost $200 million were also set aside for those seeking to shift production to ASEAN countries. Later, Japan added Bangladesh and India to the list of “relocation destinations” for its companies. As a consequence of Japan’s efforts, 87 of its companies had shifted base out of China. While 57 of such companies moved back to Japan, 30 moved to ASEAN countries like Vietnam, Myanmar and Thailand.
Read More: The remaining Japanese companies in China are going to leave China too
It was former Prime Minister Shinzo Abe’s economic assault on China that rendered the Chinese economy into a state of despair. Suga carried forward his legacy by incessantly encouraging Japanese companies to shift their business operations away from China. And now an exodus 2.0 could be very well set in motion once the new administration ensconces itself in Tokyo as Suga steps down later this month.