Japanese Company Presence in China Hits Lowest Level Since 2010 Amid Cooling Ties
A new Teikoku Databank survey shows Japanese firms in China fell to 10,118 in June 2026, the smallest count since the study began and over 20% lower than in 2024.
According to the latest Teikoku Databank survey, the number of Japanese companies active in mainland China (excluding Hong Kong and Macao) fell to 10,118 as of June 2026, the lowest figure since the survey's inception in 2010 and more than 20% below the 2024 total. This represents roughly a 30% decline from the 2012 high point. Over the two-year period, 1,221 firms established subsidiaries, factories or representative offices, whereas 4,137 withdrew or could not be located, yielding a net decrease of 2,916 firms.
The share of small and medium-sized enterprises shrank, while larger corporations now make up a greater proportion of the Japanese presence. Shanghai remains the primary hub with 3,961 companies, though that number dropped by 1,085. Manufacturing accounts for about 40% of the Japanese firms, followed by wholesale and services, together comprising 86% of the total, while the financial sector also contracted but stays relatively sizable.
Why it matters
The sharp retreat of Japanese firms signals growing economic strain in Japan-China relations and could affect regional supply chains.
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