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Around 70% of Japanese companies keen on pursuing overseas operations are rethinking or reviewing their business strategies due to global risks such as the coronavirus pandemic, a recently released survey showed.

With the spread of COVID-19 battering the world economy since last year, 64.8% of firms with business dealings abroad said they have been negatively impacted in terms of sales for fiscal 2020 ending this month, according to the Japan External Trade Organization.

COVID-19 and the lockdowns have forced companies in Japan to restructure their business plans in order to better weather the fallout from the virus.

Among other global risks, U.S.-China trade tensions as well as export restrictions by the two economic giants have also caused concern among companies.

The survey found that 36.4% are concerned that over the next two to three years China will strengthen its export regulations, while 32.6% expressed worry the U.S. would do the same.

Some 42.5% of respondents, including those in the food, apparel and electrical machinery sectors, noted they were reviewing their sales strategies.

The survey also found that in fiscal 2020, overseas sales dropped by 38.4% on average, more than 10 points higher than that of domestic sales — especially in the apparel and retail sectors.

Although the proportion of firms looking at expanding their existing overseas operations for the next three years has hit a record low, the JETRO survey said the proportion for those still wanting to start forays abroad has only marginally decreased, underscoring how the eagerness to expand overseas “has not waned.”

Around 13,500 Japanese firms ranging from manufacturers to trading houses were surveyed between the end of October to early December, with a total of 2,722 giving valid responses.

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