Japanese investment in China has decreased by 60% over the past decade due to geopolitical tensions and competition. Despite this decline, recent stimulus policies from Beijing have improved outlooks among Japanese firms, with investment in 2024 totaling 493.1 billion yen, virtually unchanged from the previous year.
Japan’s investment in China has seen a dramatic decline, dropping by 60 percent over the last decade. This reduction is primarily attributed to heightened geopolitical tensions between China and the United States, alongside increasing competition from Chinese firms in sectors that were once Japan’s strengths. In 2024, the total investment reached 493.1 billion yen (approximately US$3.2 billion), consistent with the previous year’s figures and reflective of a substantial decrease from ten years ago, according to data from Japan’s Ministry of Finance.
Despite this decline, recent stimulus measures introduced by the Chinese government have begun to foster increased confidence among Japanese businesses. A report from the China-Japan Chamber of Commerce indicated a moderate improvement in the outlook of Japanese firms, suggesting that some companies are adjusting their strategies in response to these changes. The optimism follows the implementation of supportive policy measures rolled out by Beijing starting in September of last year.
In summary, Japanese investment in China has significantly decreased due to geopolitical factors and competitive pressures. Nonetheless, recent government initiatives in China have led to a resurgence of optimism among some Japanese firms. The situation highlights the need for thoughtful strategic adjustments in the face of evolving market dynamics.
Original Source: www.scmp.com
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