Japanese Companies in China Drop to 10,118 Record Low — SkimNews
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- Teikoku Databank reported Japanese companies operating in China fell to a historic low of 10,118 as of June — down 22% from June 2024 and roughly 30% below the 2012 peak, the lowest since tracking began in 2010.
- Japanese firms withdrew from China in record numbers over the past two years — 4,137 fully exited while only 1,221 entered, the lowest new-entry figure on record outside of Covid-19.
- Prime Minister Sanae Takaichi told parliament in November that Japan could get militarily involved in a Chinese invasion of Taiwan, prompting Beijing to curb critical mineral exports to Japanese companies and urge citizens to avoid travel to Japan.
- Topix-listed companies saw their share of profits derived from China drop to under 15% so far this year, down from 23% in 2020, while U.S.-derived profits rose to 35% from 25%, per Monex Group expert director Jesper Koll.
- Chinese Vice Premier He Lifeng told a delegation from the Japanese Association for the Promotion of International Trade that China "always welcomes" Japanese enterprises and urged them to "keep to the right course on historical issues."
- Several Japanese nationals, including executives at top Japanese firms, were reportedly detained in Beijing in August over alleged dual-use goods export restrictions, intensifying what Eurasia Group's Jeremy Chan called a sense of being "unwelcome and unsafe."
- Automakers, parts suppliers, and export-oriented manufacturers are most likely to scale back in China, while localized medical and precision equipment makers are more likely to stay, according to Nanyang Technological University professor Kei Koga.
Why it matters: The exodus marks a structural reorientation: Topix-listed firms now derive more than twice the share of profits from the U.S. (35%) than from China (under 15%), a near-complete inversion from five years ago. Automakers and parts suppliers — sectors central to bilateral trade — are most exposed, while Japanese executives face detention risks that the article says are actively deterring business travel to China.
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