TOKYO (Bernama) – More and more Japanese firms are expanding business in Southeast Asia and scaling down operations in China due to its escalating tensions with the United States (US), reported Vietnam News Agency (VNA) according to the Japan External Trade Organisation (JETRO).
The organisation’s new trade and investment report quoted its survey conducted late last year as saying that 41 per cent of Japanese companies are considering expanding operations in Vietnam in the next three years or so, up 5.5 percentage points from a year earlier, and 36.3 per cent of respondents had given a similar answer for Thailand, up 1.5 percentage points.
Meanwhile, 48.1 per cent said they would boost business in China, down 7.3 percentage points.
Since 2018, an intensified confrontation between the US and China has pushed up Japanese companies’ investment in the Association of Southeast Asian Nations (ASEAN), added the report.
The gap between the amount of Japanese investment into ASEAN and China increased to JPY20.4 billion (USD191 million) in 2019 from JPY10.2 billion in 2017.
The COVID-19 pandemic has significantly reduced Japanese investment in the Asian market, as well.
In the first five months of 2020, Japanese investment in ASEAN dropped by 35.5 per cent.