More Than 40 Percent Of Japanese Companies Want To Shift Their Base Regarding Security Risks

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Image Credit – Economic Times


The US concern of security risks of Chinese technology has spread to North-East Asia. Many Japanese companies have decided to mitigate their reliance on Chine technology by transforming their base to somewhere else. They are also concerned about the security risks that have been imposed on China by the US as well as many European countries.

According to the Kyodo News survey, over 40% of companies from Japan have expressed their distress about the security risk to their sensitive technologies. Thus they have decided to shift their manufacturing units to other places. They are also thinking of changing the sources of parts that are now supplied from China to diversify their supply chains.

After the conflict between the US and China over the current technological supremacy, Japan has also recognized the security threat of the Chinese technologies alleged by the US. As per a report in the South China Morning Post, this move is also said to reduce their dependency on China in the future. It is also aimed at battling the concentration of medical products in China as the country has been facing a shortage of medical supplies due to the widespread of the novel Coronavirus infection.

The 96 respondents or the 42 percent of the companies have disclosed that they have either shifted or thinking about shifting their base and supply chain to the Southeast Asian countries and India, says the surveys.

Kyodo News has conducted a survey with around 150 top Japanese companies. Among them, 96 companies have confirmed their decision of shifting. The companies that responded include Kobe Steel, KDDI, Mitsubishi Heavy Industries, and NEC.

As per the reports of the SCMP, the Japanese government has advised the companies to move back to their native land to avoid any association with China. Among them, only eight companies have replied positively on the matter.

According to the survey, 60 percent have revealed that they are holding in-house training. They are also working on identifying their ‘important technologies’. These technologies deal with both the United States and China. They are prioritizing the information leaks and taking tough measures against them.

The survey also states that 26 of these companies have disclosed that they had constrained joint research with such partners that are likely to leak technology. 6 companies have not taken any kind of preventive measures. One of them revealed that it has a partner that is under regulations of exports from Japan and the US.

SCMP said that 59 percent of the companies have now focused more on human rights in their business with a new system. They are determined to improve the standard of work atmosphere and want to make sure their product was not produced under forced labor.

SCMP reports that this move was introduced after many multi-national companies were found to strike deal with such Chinese factories that used Uygurs and other ethnic minorities in China as forced laborers.