Japanese companies operating in China are facing increasingly difficult conditions, according to a survey released Thursday by the China-Japan Chamber of Commerce. Covering the period from January to June 2025, the survey found that 40 percent of respondents reported business conditions had “worsened” or “slightly worsened” – a 10-point increase from the previous survey in late 2024. Only 26 percent said conditions had improved, down slightly from the prior assessment. The chamber has also shifted from quarterly to semi-annual surveys beginning with this round.
Deflationary pressures remain the central challenge, with 60 percent of companies citing falling sales prices as their top concern. Rising labor costs followed at 58 percent, underscoring the squeeze of declining revenues alongside mounting expenses. Chamber Chairman Tetsuro Honma, who is also Vice President of Panasonic Holdings, described the excessive price competition in China as “extremely severe” and a “common concern” across Japanese enterprises.
The survey also touched on safety issues, referencing the July assault on a Japanese woman in Suzhou. Honma emphasized that the chamber continues to press Chinese authorities to guarantee the safety of Japanese nationals. Of roughly 8,000 companies targeted, 1,434 responded, providing a broad snapshot of the growing pressures on Japanese businesses in one of their most important overseas markets.
Source: Kyodo News, August 22, 2025
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