About half of Japanese companies plan to maintain or boost investment in China

By Kate Yuan

(JW Insights) Oct 13 -- The Japanese Chamber Commerce and Industry in China released a white paper on October 12, showing that about half of the Japanese companies will boost or maintain their investment in China, underlining the fact that the Chinese market remains important in their business plans, Global Times reported.

This is the first time by the group to release the paper based on a survey done from September 8 to 22, with feedback collected from 8,300 Japanese companies doing business across China. It covered a wide range of industries from electronics and machinery to chemicals, food and medicine.

Around 40 percent of Japanese companies expect to maintain their investment in China, and another 10-20 percent aim to boost their commitment. More than half of those surveyed in the services sectors such as finance and telecommunications plan to expand or maintain their Chinese investment, said the white paper.

Reasons given for increased investment include increased efficiency and enhanced functionality through automation, which make the companies more competitive, especially in the transportation and communications industries. Other reasons include investment in environmental protection, increased sales of automotive products and other factors.

About half of Japanese companies are satisfied with the business climate in China. The reasons for their satisfaction include well-developed infrastructure and effective government support, generous government support in terms of taxation and subsidies, and the convenience of domestic business trips after the downgraded pandemic response.

Challenges remain, the survey and the group suggested. The current Japanese government's attempt to "decouple" or "de-risk" from China, under US pressure, has had an impact on the enthusiasm and pro-activeness of Japanese companies in economic and trade cooperation with China, Xiang Haoyu, a research fellow at the China Institute of International Studies, told the Global Times.

Despite the situation, Xiang said that the majority of Japanese companies intend to maintain investment in China and value the Chinese market, and the so-called "decoupling" from China is not practical at all, said the Global Times report.