Japan-China Association: 59% of Japanese Firms Plan to Increase or Maintain Investment in China

The Japan-China Association released its 'China Economy and Japanese Enterprises 2026 White Paper' on the 11th in Beijing. Chairman Tetsuro Honma emphasized that despite intense domestic competition and shifting international dynamics, a significant number of Japanese firms continue to express confidence in and commitment to the Chinese market.

According to the white paper, 59% of surveyed Japanese companies plan to either 'increase' or 'maintain' their investment in China in 2026. Feedback from companies cited 'growing market demand and order volume' and 'maintaining competitiveness' as the primary reasons.

Official statistics from Japan's Ministry of Foreign Affairs indicate that the number of overseas branches of Japanese companies in China has reached 32,364—more than 1,000 higher than the previous year—demonstrating sustained corporate interest in the Chinese market.

However, the white paper raises concerns over China's tightened controls on rare earths and dual-use items, noting 'a lack of transparency in implementation' and calling for clearer export licensing standards.

The report also highlights that political tensions, such as Prime Minister Sanae Takagi's 'Taiwan contingency' remarks in November last year, have begun affecting business operations. The white paper explicitly states, 'We sincerely hope that political and diplomatic issues will not impact business activities or cultural exchanges,' urging enhanced dialogue between the two nations.

Chairman Honma expressed hope for 'regular and stable high-level dialogue between the two governments, unaffected by international political shifts,' identifying the APEC leaders' meeting in Shenzhen, Guangdong Province, in November 2026 as a 'significant opportunity.'

Additionally, Honma paid tribute to former House of Representatives Speaker and Japan International Trade Promotion Association President Yohei Kono, who recently passed away, stating, 'It is precisely during difficult times in Japan-China relations that we must strongly revive private economic exchanges,' reaffirming his commitment to Kono's legacy.