Nikkei: 1,600 fewer Japanese companies in China in a decade

International Business News  (Shang Hai) – According to Japanese media Nikkei, the proportion of Japanese companies entering China through local corporations and other means will be 0.87% in 2022, a decrease of 0.14 percentage points from the record high in 2012.

Teikoku Databank conducted seven surveys on the presence of Japanese companies in China from 2010 to 2022, and calculated the number and proportion of Japanese companies in China by prefectures through the establishment of local subsidiaries or offices and contributions to related companies. As of June 2022, there were 12,706 Japanese companies in China. This is more than 1,600 fewer than in 2012 (14,394).

A more typical example is the withdrawal of a garment company from a textile factory in China by the summer of 2022. The reason is that the United States prohibits the import of cotton products produced in China. Even if there are factories, it is difficult to procure good quality, low-priced cotton fabrics. Although the preferred option is to shift to Southeast Asia, where labor costs are low, the company is also considering a return to Japan because of higher wages in China and the devaluation of the yen, which is not much different from Japan in terms of cost.

Large manufacturing companies such as Canon and IRIS OHYAMA have also seen a retreat. Small and medium-sized enterprises supplying large companies have been forced to retreat due to a reduction in the number of companies to which they supply.