Japanese Companies Growing More Pessimistic About China's Economy

Forex - Japanese firms in China are growing more pessimistic about the world's second-largest economy. According to a recent survey by the Japanese Chamber of Commerce and Industry in China, approximately 64% of Japanese companies reported that the Chinese economy is in worse condition compared to last year. This figure was 60% in the previous report, coinciding with a period when security concerns and the stabbing death of a Japanese student in Shenzhen hindered efforts to improve diplomatic relations.

Japanese firms continue to invest heavily in China, which remains Tokyo's largest trading partner. However, rising geopolitical tensions, deteriorating bilateral relations, and fierce competition from Chinese companies have led many to withdraw. Over 40% of Japanese firms expressed dissatisfaction with the business conditions in China, while some cited concerns for the safety of their employees and families, as well as issues such as China's refusal to restore visa-free travel for Japanese citizens and the need to rectify the ban on seafood imports.

The survey conducted in the second half of October included 1,513 companies, of which 44% indicated plans to reduce their investments in China this year or not invest at all.