Japan, Australia, India aim to create supply chain to ease dependence on China
Japan, Australia and India will aim to establish a supply chain network for products and parts with the participation of the Association of Southeast Asian Nations (ASEAN), The Yomiuri Shimbun has learned.
The three countries intend to enhance their competitiveness by mutually taking advantage of their strengths: Japan’s technological capability, Australia’s abundant resources, India’s human resources in information technology.
This plan is expected to reduce security risks by calling for Japan, India and Australia as well as ASEAN member states to diversify their production and procurement sources, as they depend on specific countries such as China.
Another aim of the move is to reduce the risk that exports and imports will be suspended when infectious diseases spread.
In the wake of the novel coronavirus outbreak, imports of automobile and electrical parts, mainly from China, were suspended, affecting production activities by Japanese, Australian and Indian companies. As the supply of medical products, including masks, had also been disrupted, establishing a new supply chain has been at issue from the standpoint of measures against the virus.
For Japan, where resources are scarce and labor costs are high, it is essential to have an international supply network for many products.
Japanese, Australian and Indian ministers in charge of economic matters are expected to hold talks soon to compile a joint statement that will include the plan. The three countries intend to urge ASEAN member states to join the initiative and launch discussions to build the supply chain after each participating country sets up a council for this matter by the end of this year.
As a first step, the countries will accelerate efforts that they have already launched, such as projects between Japan and India to develop industrial parks, foster human resources for technological development and reduce logistics costs.
By promoting multinational cooperation also involving companies in other sectors, the three countries and ASEAN will then aim to reinforce their entire supply network.
Japan has advanced technologies in the automobile and electronics fields, but lags behind the United States and China in the area of digitization.
Japan is looking to complement its weaknesses through cooperation with Australia, which boasts natural gas and other natural resources, and India, with its abundant IT human resources.