Business

Japan aims to break supply chain dependence on China in light of COVID-19

JIJI

A state investment panel said it will consider ways to promote an increase in domestic manufacturing output as part of an effort to protect the economy from the coronavirus outbreak.

The Council on Investment for the Future, chaired by Prime Minister Shinzo Abe, also laid out a plan Thursday to take drastic measures to help the tourism industry recover when the virus crisis settles down.

The panel plans to draw up concrete measures, and the government might compile a supplementary budget for fiscal 2020 to finance them, sources familiar with the matter said.

Supply chain disruptions in China usually punish Japanese manufacturers, such as carmakers, because many are heavily dependent on parts from the country.

The council will consider encouraging manufacturers to source more from Southeast Asia and bring production of highly profitable products, such as critical auto parts, back to Japan.

For the tourism industry, the council affirmed a plan to launch a national campaign that would have both public- and private-sector support to revive demand for travel.

It also agreed to establish a subcommittee to consider a mid- and long-term energy strategy that will take into account challenges from climate change and improvements in energy-efficient technologies.

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