Toshiba to shift 30-year-old manufacturing unit out of China's Dalian amid reduced profit

Japanese tech giant, Toshiba will relocate its 30-year-old production plant from China's rth-eastern city Dalian to Vietnam or Japan, amid country's ongoing dispute with Beijing. plant, Toshiba's first in China, employs approximately 650 people and produces industrial motors. However, due to a sharp reduction in production, unit was put on chopping block, and company chose to close it down by end of month, according to Nikkei Asia.

operators have stated that liquidation of this industrial operation will begin as early as October, with capacity being relocated to Vietnam and Japan. action occurred amid a recent struggle between Beijing and Tokyo over China's expanding clout in both South China Sea and East China Sea, partially in response to Beijing's fears over growing US military presence in region as a result of worsening China-US tensions.

Chinese Communist Party has warned Tokyo of nuclear retaliation

Meanwhile, Beijing claims control over practically entire South China Sea, with Brunei, Malaysia, Philippines, Vietnam, and Taiwan having conflicting territorial claims. Chinese Communist Party (CCP) had previously released a video in which it warned Tokyo of nuclear retaliation and 'full-scale war' if it interfered with China's administration of Taiwan.

According to South China Morning Post, Toshiba's impending departure comes as a number of countries, including US, seek to reduce ir reliance on China, according to Liu Zhibiao, a professor of industrial ecomics at Nanjing University in Jiangsu province. Furrmore, electronic items from businesses like Toshiba are w up against stiff competition from Chinese brands, reducing demand for foreign brands.

Japanese government anunced an initiative last year aimed at 'boosting investment in Japan to enhance supply chains,' with 220 billion yen set out in country's supplementary budget for year, according to South China Morning Post. Approved enterprises will receive financial assistance to relocate to Souast Asia or develop new domestic operations as part of programme, with goal of manufacturing more key products and materials for Japan.

More than 60% of Japanese companies in China remained profitable

A poll conducted in March by Japan External Trade Organization revealed that business confidence among Japanese companies working in China has deteriorated in 2020. However, it was also claimed that, despite fact that ratio of enterprises retaining profitability, had declined across all countries and regions, more than 60% of Japanese companies in China remained profitable, according to South China Morning Post.

(Inputs from ANI)

(Im: Unsplash)