Japanese apparel retailers and suppliers of sports products are accelerating the implementation of the "China+1" business policy, which denotes setting up another manufacturing base besides China, according to a report by the Chinese edition of Japanese daily newspaper The Nikkei.

The main reason behind the move is that by decentralizing their production bases, Japanese companies can lower their risk of China's increasing labor costs, and guarantee their stable supply of goods particularly in unexpected incidents such as sudden need for increasing their output.

As reported, 95% of functional underwear of Ito Yokado, one of Japan's leading retailers, is being produced in China, but it plans to shift part of its production to Southeast Asian countries such as Thailand, after which its production in China is anticipated to drop to 75%.

Another Japanese retailer, UNY, plans to cut its apparel production in China from 74% to 65% by 2014, while boosting its apparel production in Thailand from 9% to 13%. Besides, Asics and Mizuno, two Japanese sports products manufacturers, will also decrease their production of sports products (such as sports shoes) in China and expand their production scale in Vietnam and Indonesia.

Citing statistics of Japan's Ministry of Finance, The Nikkei report reveals that in 2011, the country's apparel imports from China saw a drop of more than 10% as compared with that in 2007, whereas its apparel imports from ASEAN countries grew for eight years in a row.

However, it is worth noting that the advantage of low labor costs in Southeast Asian countries is limited while there is still growing risk of increasing costs there, the report remarks.