Japanese companies predict China’s economy to remain grim

Japanese companies in China predict that the Chinese economy will remain grim this year, Reuters reported on Monday citing a Japanese Chamber of Commerce and Industry in China report.

Approximately 75 per cent of the 1,700 participants in the survey expected that the Chinese economy would either get worse or stay the same.

While top concerns expressed by 48 per cent of the companies surveyed were uncertainty over China’s economic prospects and pessimism over weak demand, which led them to either reduce or avoid investment in China in 2023 compared to the previous year.

Moreover, the companies were also worried about the implications of Chinese laws regarding cross-border data flows and espionage.

China amended the anti-espionage law last April and expanded the definition of spying a month after it had detained a Japanese businessman who was suspected of spying.

However, half of the companies surveyed believed that China was the most important market globally or among the top three most important in 2024, despite the country’s poor prospects and challenging operating environment

Notably, China ranks among the top investment destinations for Japanese businesses and is Japan’s biggest trading partner.

According to the report, the companies hoped to see improvements in the Chinese business environment, such as fewer restrictions on visas for Japanese citizens and lower labor costs.