JAPANESE COMPANIES ARE LEAVING CHINA IN RECORD NUMBERS

JAPANESE COMPANIES ARE LEAVING CHINA IN RECORD NUMBERS

The number of Japanese companies operating in China down 22% since 2024 to its lowest level since Teikoku Databank started tracking in 2010.

4,137 Japanese companies completely withdrew from China between 2024 and 2026, while only 1,221 new ones went in.

Teikoku says Japanese business in China has shifted from an expansion phase to a restructuring phase, and expects the exit to continue.

Three main reasons:

1. US tariffs have hit revenue for 60% of Japanese manufacturers in China.

2. China's slowing economy, collapsing property prices and rising labour costs.

3. A year-long diplomatic freeze over Taiwan has led China to restrict critical mineral exports to Japan.

For the first time, Guangzhou's major travel expo ahead of China's National Day had no Japanese exhibitors.

Japan isn't completely abandoning China. It's reducing its dependence on China and shifting supply chains toward India, Thailand and Southeast Asia.