Japanese electronics could become more expensive if local manufacturers cut ties with China

At present, Japan is economically very dependent on China. In 2020, China accounted for 26% of all goods imported into Japan, overtaking the US at 19% and Germany at 11%. Experts believe that if Japanese electronics manufacturers refuse to cooperate with China, the cost of their products may increase by ten percent. Moreover, Japanese companies are obliged to consider such scenarios due to the instability of the geopolitical situation.

Image source: Honda Motor

According to Japanese researchers, if the volume of imports from China to Japan is reduced five times in two months, the country will lose 360 ​​billion US dollars in products, including cars, appliances, clothes, food and other types of polymers. . In general, Japan would lose up to 10% of its GDP in this case in two months.

Honda Motor Company, as Nikkei Asian Review explains, is already experimenting to reduce its dependence on the Chinese economy. More than 30% of the automaker’s revenue comes from the Chinese market. As an alternative, the possibility of supplying components necessary for the production of Honda cars from Southeast Asian countries is being considered, but the cars assembled in China will be equipped with locally produced components.

The search for alternative ways to supply the necessary components, according to the source, will increase the cost of computers sold in Japan by 50%, and in the case of smartphones, the retail price should be increased by 20%. It is clear that while the local economy is simply not ready for a sharp severance of relations with China, companies and the government are studying these scenarios in order to be prepared for even a sudden deterioration in the geopolitical situation. .

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