A survey by Teikoku Databank found that the number of Japanese companies operating in China stood at 11,118 as of June 2026, down 22.4% from 2024. The survey points to the possibility that efforts to reassess dependence on the Chinese market and integrate or withdraw from local operations will intensify.
The number of Japanese companies operating in China has been declining. As of June 2026, 11,118 Japanese companies were operating in China, down 22.4% from the 13,034 recorded at the time of the previous survey. This was also a sharp decrease from the previous peak of 14,394 companies in 2012.
The manufacturing sector has contracted mainly in labor-intensive light manufacturing and textile industries. Amid rising labor costs and supply chain restructuring, companies may have accelerated the relocation and diversification of operations outside China through strategies such as China Plus One and reshoring to Japan.
As country risks rise, including worsening Japan-China relations, China’s domestic property downturn, restrictions on rare earth exports, the revised Anti-Espionage Law and intensifying price competition with local companies, businesses are required to implement sophisticated risk management. Over the medium to long term, the analysis indicates that efforts to reduce dependence on the Chinese market, including the integration and closure of local subsidiaries, may intensify.