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Japanese manufacturers linked to China suffer disruption

Japanese manufacturers linked to China suffer disruption

Export and import activities of
Japanese manufacturing companies that are linked to China have been disrupted
due to the limited production as a result of the novel coronavirus outbreak in
Wuhan, Hubei Province.

Japan External Trade Organisation
Malaysia MD Mai Onozawa said according to the ongoing
survey by Japanese Chamber of Trade and Industry Malaysia (JACTIM), Japanese
companies have been restructuring their production plans to accommodate the
shrinking activities in China.

“Currently, we are collecting
responses from 60 JACTIM members on the virus outbreak in China and 46% of them
foresee some changes in their operations.

“Most Japanese manufacturers in
Malaysia are involved in export or import activities with China. Some companies
purchase parts and materials from China and some are selling their products

“Due to the shrinking manufacturing
activities in China, Japanese firms that are exporting to China have to change
their production plans according to China’s demand, while those who import have
to stop,” she said at a media briefing in Kuala Lumpur yesterday.

Onozawa said tighter regulations at
the customs checkpoints put in place recently to prevent the virus from
spreading have contributed to the disruption of the supply chain.

“Procedures at the customs have been
increased, which translates into tighter procedures for the logistics as well,
and Japanese companies in Malaysia are pessimistic on this because most of them
are involved in the export and import market,” she said.

The flu-like virus, which has
claimed at least 560 lives, is expected to impede global export activities,
particularly the Phase 1 trade deal between the US and China signed in January.

Commenting on the business sentiment
in Malaysia, JACTIM VP Daiji Kojima said the country continues to be an
attractive investment destination for Japanese firms.

“The business environment in
Malaysia has been convenient as it is a developing country and the operating
cost is considered to be in the medium range.

“Geographically, the location is
practical for businesses to grow. However, the incentives in Malaysia are not
attractive compared to other Asean countries as most of them are trying to
reduce corporate tax. In Malaysia, it is a bit higher,” he said.

Source: The Malaysian Reserve 

Posted on : 07 February 2020