Japanese companies have become more reluctant to expand their investment in China, criticizing the government's radical "COVID zero" policy, including the frequent imposition of lockdowns in major cities, as a political risk.

China's tough restrictions on people's movements, which have disrupted domestic supply chains for more than two years, have prevented Japanese firms from mapping out their business strategies in the world's second-biggest economy, with its population of 1.4 billion.

Many Japanese enterprises have also been eager to reduce their staff numbers in China, given that the country's strict quarantine requirements, even for those not infected with the coronavirus, can adversely impact mental health.