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Tuesday, July 7, 2020

After the shock of Corona … countries pay companies to move their factories from China

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China Its heyday, which meant that many international companies found themselves without factories to produce their products, such as clothing, electronics and others, which highlighted the world’s dependence on China in the field of manufacturing, and the need to take steps to prevent a recurrence of such a scenario in the future, according to a report by the specialized quartz website.

To make matters worse, when an epidemic struckCovid-19“Various countries of the world, major countries found themselves in great trouble, when they discovered that they are unable to manufacture equipmentMedical masks Domestically, it assigned those operations to China long ago, which is what happened with United State.

To ensure similar pressure does not fall again, some countries have begun offering financial incentives to companies to move manufacturing operations outside of China and build more flexible supply chains.

And in India, The Prime Minister’s Office is working on a plan that will provide capital spending benefits to electronics manufacturersmedical equipments, So that production be moved out of China, either by returning to India, or by following a more diversified manufacturing base, taking place in different locations.

A government official, who was not identified, told the Indian Economic Times: “Many countries are now keen that their sectors diversify the sites of manufacturing operations … There will be a shift.”

It started Indian government Its efforts have already reached out, as it has reached out to more than 100 companies and is looking to expand the offer to include other sectors as well, according to the site “Quartz”.

As for Japan, It allocated 2.2 billion dollars earlier this month to help its companies move Manufacturing processes from China. About $ 2 billion has been allocated to companies that will return production to Japan, and the remainder will be allocated to companies that will move it to another location.

This came after Japanese Prime Minister Shinzo Abe called in March to return “more complex” production operations to Japan and to distribute other production operations in Southeast Asia.

It is slated to become “Iris Ohayama“It is the first FMCG company to receive support when it begins production.” Medical masks, Including the necessary raw materials, in Japan.

In the United States, no similar plans have been announced yet, but Larry Kudlow, a senior economic advisor in the Bush administration Donald TrumpIn a meeting with Fox Business, he announced his support for such a move.

“As far as policies of repatriation companies are concerned, we can do a lot of things,” he said, suggesting that the United States pay the full costs of companies moving factories, equipment and intellectual property from China to the United States.

It is reported that breaking dependence on China in the production sector will not be easy, because reorganizing supply chains will be very expensive, and because China’s industrial infrastructure is very advanced.

But even before an epidemic appeared Sk, Many will Companies Multinationals were transferring their manufacturing operations from China, due to the continuous rise in costs in China.

Also that Trade war Between the United States and China matters are held for those who export from China to the American consumer market.

However, a large-scale shift by companies to move manufacturing operations to their “home” is unlikely. And the “Quartz” website indicated that companies can transfer the production of important products or goods related to health and national security.

But for other products, companies may move them to other less expensive locations in Asia or countries close to their main markets.

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Last February, orders to close were in China Its heyday, which meant that many international companies found themselves without factories to produce their products, such as clothing, electronics and others, which highlighted the world’s dependence on China in the field of manufacturing, and the need to take steps to prevent a recurrence of such a scenario in the future, according to a report by the specialized quartz website.

To make matters worse, when an epidemic struckCovid-19“Various countries of the world, major countries found themselves in great trouble, when they discovered that they are unable to manufacture equipmentMedical masks Domestically, it assigned those operations to China long ago, which is what happened with United State.

To ensure similar pressure does not fall again, some countries have begun offering financial incentives to companies to move manufacturing operations outside of China and build more flexible supply chains.

And in India, The Prime Minister’s Office is working on a plan that will provide capital spending benefits to electronics manufacturersmedical equipments, So that production be moved out of China, either by returning to India, or by following a more diversified manufacturing base, taking place in different locations.

A government official, who was not identified, told the Indian Economic Times: “Many countries are now keen that their sectors diversify the sites of manufacturing operations … There will be a shift.”

It started Indian government Its efforts have already reached out, as it has reached out to more than 100 companies and is looking to expand the offer to include other sectors as well, according to the site “Quartz”.

As for Japan, It allocated 2.2 billion dollars earlier this month to help its companies move Manufacturing processes from China. About $ 2 billion has been allocated to companies that will return production to Japan, and the remainder will be allocated to companies that will move it to another location.

This came after Japanese Prime Minister Shinzo Abe called in March to return “more complex” production operations to Japan and to distribute other production operations in Southeast Asia.

It is slated to become “Iris Ohayama“It is the first FMCG company to receive support when it begins production.” Medical masks, Including the necessary raw materials, in Japan.

In the United States, no similar plans have been announced yet, but Larry Kudlow, a senior economic advisor in the Bush administration Donald TrumpIn a meeting with Fox Business, he announced his support for such a move.

“As far as policies of repatriation companies are concerned, we can do a lot of things,” he said, suggesting that the United States pay the full costs of companies moving factories, equipment and intellectual property from China to the United States.

It is reported that breaking dependence on China in the production sector will not be easy, because reorganizing supply chains will be very expensive, and because China’s industrial infrastructure is very advanced.

But even before an epidemic appeared Sk, Many will Companies Multinationals were transferring their manufacturing operations from China, due to the continuous rise in costs in China.

Also that Trade war Between the United States and China matters are held for those who export from China to the American consumer market.

However, a large-scale shift by companies to move manufacturing operations to their “home” is unlikely. And the “Quartz” website indicated that companies can transfer the production of important products or goods related to health and national security.

But for other products, companies may move them to other less expensive locations in Asia or countries close to their main markets.

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