I’ve been speculating on how international trade will change in the wake of the Covid-19 pandemic and international shutdown, and WaPo provides some more information, this time from Japan, on how they are beginning to adapt to the newly recognized realities of supply chains sometimes being a step too long:
Indeed, alarm bells started ringing in Japanese boardrooms as soon as the novel coronavirus emerged in the Chinese city of Wuhan, a major hub of the auto parts industry.
Of course, Japan must also be aware of China’s more aggressive posture, assumed since Xi Jinping took over, also endangers those chains supplied by China; in essence, those chains become levers of power for Jinping. To the extent that they can be supplanted by other sourcing, such as local, Jinping’s influence is mitigated.
But Japan, being a small, island country of few natural resources, has to be part of the international trading system. Don’t look for them to withdraw much.
