Japanese companies in China see the economic situation as grim, according to a new report from the Japanese Chamber of Commerce and Industry in China released Thursday.
A quarter of respondents said they wouldn’t invest in China this year while another 22% said they would reduce the amount they invest, according to the report. Japanese companies are one of the largest groups of foreign investors in China, and their reluctance to lift spending is a further drag on an economy that is already struggling this year.
More than half the Japanese firms doing business in China saw their revenue and profits fall last quarter from the previous three months, one factor that is making Japanese businesses more cautious about investing in China. Many firms cited shrinking domestic demand as a key reason behind the decline.