China has immense control in the technology world given that it is a necessary piece in the puzzle when it comes to supply chain and manufacturing. With the COVID-19 pandemic, several companies have taken action to diversify production from China to other countries.
Now, it seems to be the time for diversifying the supply chain. As per the report, over 40 percent of Japanese tech companies are shifting their manufacturing base and source of parts supplies from China in an effort to diversify.
The companies include those that the government has recognized as processing sensitive technology linked to security. The move also aims at mitigating security risks associated with the on-going US-China trade war.
The report reveals that in a survey conducted, 42 companies out of 96 that responded have diversified or are considering diversifying their supply chains by moving to India and Southeast Asian countries.
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Additionally, three companies said that they will have to downsize operations or withdraw from China. Eight companies have said that they are thinking about what to do. 26 companies said that they placed restrictions on joint research with partners that could leak technology while six companies have not taken any action.
The report adds that the businesses started taking such action after it was found that many multinational companies made deals with Chinese factories that have been suspected of imposing forced labor on Uyghurs and other ethnic minorities in China.
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