According to a survey released by a Japanese data provider, as of June 2022, the number of Japanese companies in mainland China was 12,706, the lowest for the past 10 years. The survey points out that the “Zero Covid” policy has added to the risk of doing business in China. It also points to a trend involving the growing exodus of companies from China.
Compared to the last survey conducted in February 2020, there were 940 fewer Japanese companies (about 7 percent less). Among all the previous surveys, the year 2012 saw the highest number (14,394) of Japanese companies in China.
Among all the cities, Shanghai hosts the largest number (6,028) of Japanese companies. However, the number is 272 lower than it was in the previous 2020 survey. Since late March, and for about two months, Shanghai has been under lockdown and has been closed. Factors such as a delayed supply of parts have dealt a huge blow to the operations of Japanese companies.
The data provider, Imperial Database, observes that the extended lockdown under the “Zero Covid” policy has led to work stoppages, production shutdowns, and logistics and supply chain disruptions. There is an ongoing movement of European and American companies leaving China, with Japanese companies also pushing for supply chain adjustments.
Source: Kyodo News, July 23, 2022