Japanese companies are rapidly reducing their dependence on China as political tensions and business risks mount. A new Teikoku Data Bank survey shows only 16.2% of firms now cite China as their most important manufacturing base, down sharply from 23.8% in 2019. China’s importance as a sales market has also fallen by more than half.
The shift mirrors a sharp decline in trade. Japanese exports to China dropped 24% between 2021 and 2024 as Beijing favored domestic competitors.
Japan Inc. learns to become less reliant on China https://t.co/BEMrSbC0nz
— Nikkei Asia (@NikkeiAsia) November 26, 2025
Auto parts and industrial machinery recorded three straight years of double-digit declines. Imports from China also fell, with Vietnam and India gaining ground.
Expert: Japan more dependent on China#Japan is significantly more dependent on trade with #China, and Japanese companies have greater cumulative investment in China than Chinese companies have in Japan, said John Quelch, distinguished professor of social science at Duke Kunshan… pic.twitter.com/EmIzNeOXwP
— CGTN BIZ (@CGTNGlobalBiz) November 24, 2025
The latest diplomatic clash — triggered by Prime Minister Sanae Takaichi’s comments on Taiwan — has accelerated concerns, as Beijing issued travel warnings, banned Japanese seafood and canceled cultural exchanges.
Some sectors, such as tourism in Hokkaido, are shifting to South Korean and Taiwanese visitors, though Chinese shoppers remain vital to Japan’s retail sector.
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TIPP Staff
TIPP Staff
