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Politics

Japan expands 'China exit' subsidies for moves to Southeast Asia

Prime Minister Suga to announce plan during ASEAN tour in first official trip

A Vingroup factory outside Hanoi. Japan hopes to encourage manufacturers to add capacity in Southeast Asia without pulling out of China entirely.   © Reuters

TOKYO -- Japan will significantly ramp up a program encouraging businesses to build production sites in Southeast Asia to diversify supply chains that are too dependent on China.

The government will cover up to half the cost of such investments within the Association of Southeast Asian Nations for large companies and as much as two-thirds for smaller businesses. The subsidies apply to products for which manufacturing tends to be concentrated in a specific country.

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