Japanese companies are increasingly abandoning an approach to business in China that once seemed immune to politics, a stark shift after years when they were the biggest single investors in their neighbor’s economy.
In an era defined by geopolitical risks and worry over China’s faltering growth, the economic math no longer adds up for the likes of Nippon Steel, which said in July it was exiting its joint venture in China. Mitsubishi Motors suspended its local operations indefinitely last year, a casualty of slumping car sales and China’s rapid shift to electric vehicles.
Almost half of Japanese firms in China polled in a recent survey said they won’t spend more or will cut investment this year. Companies listed rising wages, falling prices and geopolitics as the biggest issues they faced.
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