A Teikoku Databank survey found that the number of Japanese companies operating in China stood at 10,118 as of June 2026, down 2,916 from 2024. The number of companies that had exited China or whose whereabouts were unknown was the highest on record, highlighting the restructuring of China operations.
According to Teikoku Databank’s survey of Japanese companies’ operations in China released in 2026, the number of companies with local subsidiaries, affiliates, representative offices or other establishments in China stood at 10,118, down 2,916 from 2024. Compared with the peak in 2012, the number was down approximately 29.7%, making it the lowest in surveys conducted since 2010.
The number of new entrants was 1,221, while the number of companies that had exited China or whose whereabouts were unknown reached 4,137, the highest level on record. The net decrease over the 2-year period was 2,916 companies, indicating that China business is shifting from an expansion phase to a restructuring phase.
Factors cited included rising labor costs and economic stagnation in China, tensions between the United States and China, the burden of regulatory compliance and price competition. The shift of production bases to Southeast Asia and Japan has also become more active, changing China’s traditional role as a low-cost production base.
China nevertheless remains an important market, with a huge consumer base and extensive logistics networks, and the share of operations established for high-value-added manufacturing, sales and marketing, and research and development is increasing. Supply chain restructuring is advancing, but whether the trend of withdrawing from China will intensify will depend on companies’ medium- to long-term strategies.