Japanese companies' China operations have shifted from expansion to restructuring. A survey as of June 2026 found that 10,118 companies were operating in China, while the number that had withdrawn or could no longer be located had risen to 4,137. The trend toward diversification and redeployment is expected to continue.
Japanese companies' presence in China has shifted from a period of expansion to restructuring. According to a survey by Teikoku Databank, 10,118 Japanese companies were operating in China as of June 2026, down 2,916 from 13,034 in 2024. Based on the available statistical data, this was the lowest level since 2010.
The idea of “China Plus One,” which seeks to diversify dependence on the Chinese market, is gaining ground. In light of geopolitical risks including tensions between the United States and China and the situation surrounding Taiwan, companies are moving to diversify functions such as production, procurement and logistics outside China. While China continues to serve as an important base for sales and research and development, the trend is increasingly focused on reducing dependence rather than withdrawing completely.
The survey found that 4,137 companies had withdrawn from China or could no longer be located, while 1,221 had newly entered the country during the same period. The streamlining of China operations is expected to continue. Geopolitical changes in Japan-China relations and debate over economic security are expected to shape the future of Japanese companies' China operations over the long term.