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

TOKYO (Reuters) – When Japanese firm Iris Ohyama agreed in April to begin producing much-needed face masks in Japan, it marked a win for Prime Minister Shinzo Abe who wants to bring manufacturing back from China.

Preparations for making protective face masks are underway at household equipment maker Iris Ohyama Inc.’s factory in Kakuda, Miyagi Prefecture, northeastern Japan, May 20, 2020, in this photo taken by Kyodo.

Spooked by coronavirus-induced factory shutdowns in China, Abe’s government has earmarked $2 billion to help companies shift production home. The policy, part of a massive stimulus package to cope with the pandemic, has even been termed by some bureaucrats as a matter of national security.

“We have become dependent on China,” Economy Minister Yasutoshi Nishimura told reporters last week. “We need to make supply chains more robust and diverse, broadening our supply sources and increasing domestic production.”