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NHK Chinese: Less Than 30 Percent of Japanese Companies Plan to Expand Operations in China

NHK Chinese recently reported on a routine survey by the Japan External Trade Organization (JETRO). The survey showed that the number of Japanese companies that believe their business in China will expand in the future has further decreased, falling below 30 percent for the first time since the survey’s inception.

The JETRO annual survey is conducted on Japanese companies investing overseas. The latest result showed that only 27.7 percent of the surveyed companies plan to expand in China within the next one to two years. This figure has fallen rapidly during the past several years — two years ago, 40.9 percent of companies reported plans for expansion in China, and last year the figure was 33.4 percent.

Analysis suggests the following reasons for the decline: China’s economic outlook has become increasingly uncertain; due to the popularity of electric vehicles in China, the market share of Japanese companies that operate in the field of petroleum-fueled vehicles has shrunk.

In this survey, there were a significant increase in the number of Japanese companies that plan to grow their businesses in the Global South, including in India and Brazil. JETRO’s Chairman said that China’s macro economy has slowed down significantly, and that the Chinese market is critical for Japanese companies. Thus, Japanese companies will still need to ensure their presence in the Chinese markets even if they are not optimistic about prospects for business expansion in China.

Source: NHK Chinese, November 21, 2023