Nippon Steel & Sumitomo Metal Corporation, headquartered in Tokyo, was formed by merger in 2012 and that instant became the world’s second largest steel producer. Its Nippon Steel & Sumikin Galvanizing plant in Rayong Province, Thailand, began production in late 2013. In August, the company opened a steel plant in Mexico. More plants are being built in India and China to supply automakers. It already has a crankshaft plant in the US. The plant in Thailand is run by the company’s steelworks in Nagoya, Japan, which has fewer engineers today than it had 20 years ago.
This is the same song that has been playing all across Japan. The data has confirmed that investment in Japan by Japanese corporations has been lagging, while they’ve plowed enormous amounts of money into building production facilities overseas – money that the Bank of Japandemonium has been printing and handing out for free. It’s all part of Prime Minister Shinzo Abe’s glorious economic religion, lovingly named after him, that he has been trying to shove down people’s throats. Abenomics was supposed to perform some sort of top-down economic miracle. But the opposite has been happening.
Abenomics apologists have pointed out that these investment decisions had been made before the hapless Japanese had to take the leap of faith with Abenomics. OK, but now these executives are talking about their plans for the future: turns out, they’re scrambling to pour money into Southeast Asia and other parts of the world. And to heck with investing in Japan!
It wasn’t even close. Of these executives, 48% said they’re planning to increase capital investments overseas in fiscal 2014, but only a minuscule 14.8% said they’d do so in Japan.
Alas, for the economy to expand as promised by Abenomics and as predicted by soothsayers, companies would have to invest in Japan and produce in Japan, both for domestic demand and for export. That was the stated purpose of demolishing the yen and reducing the tax burden on Japan Inc.
Read the rest of this post at Testosterone Pit. View original post.