Japanese firms lose interest in China operations

7 years ago by in China, Featured

expanding business in chinaAbout half of the Japanese companies seem reluctant to expand their business operations in China, according to a new survey released by the Japan External Trade Organization (JETRO) on Tuesday.

During the next two years, only 52.3% of the companies in Japan will expand business operations in China, the world’s second-largest economy. It’s a 14.5 percent drop compared to 2011, the experts say.

The survey results are based on responses from 3,819 firms obtained in October and November. The survey focused on the business operations of Japanese-affiliated companies in 20 countries and areas in Asia and Oceania.

About 42% of respondents said they will maintain current business operations, which is a 13.1 percentage point rise compared to last year. Meanwhile, only 5.7% of participants said they would cut operational size.

The reason for Japan hesitating to invest in business operations with China might be the territorial dispute over the contested islands in the East China Sea and the anti-Japan protests in China, said JETRO’s officials.

Japanese companies’ interest in expanding business dropped not only when it comes to China, but also to four other major Southeast Asian markets, including Thailand, Malaysia and Singapore. Instead, companies in Japan seem more interested in investing in emerging countries such as India, Indonesia, Laos, Bangladesh, Cambodia and Myanmar.