The number of Japanese companies operating in China has fallen to just 10,118 as of June 2026, the lowest since record-keeping began in 2010 and down 22% from the previous survey in June 2024, according to data from Teikoku Databank, a Japanese credit research firm. Compared with the peak in 2012, the number of Japanese companies in China has now dropped by roughly 30%. Over the past two years, as many as 4,137 Japanese companies withdrew from China entirely, a record high, while only 1,221 Japanese companies entered the Chinese market through setting up subsidiaries, factories or representative offices during the same period, the lowest on record excluding the COVID-19 pandemic period. Jeremy Chan, an analyst at Eurasia Group, said many Japanese companies had already planned to scale down their operations in China, but the rapid deterioration in China-Japan relations has led many to consider exiting the Chinese market with greater urgency. Tensions flared after Japanese Prime Minister Sanae Takaichi told parliament in November 2025 that Japan could become militarily involved if China used force to invade Taiwan, and Beijing responded by restricting exports of certain critical minerals to Japanese companies and urging Chinese citizens to avoid travel to Japan. Jesper Koll, an expert at Monex Group, noted that companies listed on the TOPIX index have seen the share of their profits coming from China fall to below 15% this year, from about 23% in 2020. Conversely, the share of profits coming from the U.S. market rose to about 35% from 25% over the same period.
Monex Group, Inc.Teikoku Databank is cited as the data source for the record-low count of Japanese firms in China; no impact on its own business.
