Japan encourages firms to move production lines to South East Asia

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(VOVWORLD) - Japan will launch a subsidy program to encourage domestic manufacturers to transfer their overseas production bases to Southeast Asia, as the coronavirus pandemic has greatly disrupted their supply chains heavily dependent on China.

The 220-million-USD program, incorporated into the government's emergency stimulus package to ease the economic fallout from the pandemic, will help firms diversify their supply chains by financially assisting the construction of production facilities and feasibility studies in ASEAN countries.

The initiative came after many automakers and other manufacturers suffered a shortage of parts produced in China due to the outbreak of the pandemic late last year in the central Chinese city of Wuhan.

In another effort to reinforce supply chains, the Japanese government will spend 2 billion USD to promote domestic output of items that are currently heavily imported from certain areas. Also included in the stimulus, the subsidies will financially support the relocation of Japanese firms' overseas production sites back home.