A recent survey conducted by NHK reveals a concerning trend: nearly half of Japanese companies anticipate facing significant challenges in their business dealings with China come 2026. This finding sheds light on the increasing complexities of Japan-China relations, particularly following remarks made by Prime Minister Takaichi Sanae regarding a potential crisis in Taiwan, which have heightened tensions between the two nations.
Between December 12 and January 8, NHK surveyed 100 major firms, of which 71 provided insights about their perspectives on the Chinese market. The results are telling. When asked to evaluate their business outlook with China, only 4% of the respondents felt optimistic enough to describe conditions as "very tough," while a larger segment, 45%, believed that business would be "somewhat tough." In contrast, nearly half of the companies, 49%, thought that the situation would remain stable, and just 1% foresaw a slightly improved scenario.
Diving deeper into the concerns surrounding these business prospects, respondents identified specific issues affecting their operations. A significant 46% highlighted restrictions on human exchanges as their primary concern. Additionally, 40% feared declining sales in the Chinese market, attributing this to potential boycotts of Japanese goods. Another 40% expressed worries about possible restrictions on exports of rare earth elements and other essential minerals, further complicating the trade landscape.
The survey also explored strategic responses companies are considering regarding their engagements with China. Notably, 23% of participants indicated plans to rebuild their supply chains, while 10% were contemplating a shift towards ASEAN countries and other international markets. This reflects a growing sentiment among businesses to minimize dependence on China. Interestingly, 14% of those surveyed still expressed intentions to enhance collaboration with Chinese firms, showcasing the complexity of these relationships.
In another part of the survey, 86 companies shared their views on the impact of tariff policies introduced during Donald Trump’s administration. A clear majority—51%—reported that these tariffs had substantially negative repercussions for their operations, while 31% noted that they experienced no effects, and 17% acknowledged a mix of both positive and negative impacts.
Furthermore, when asked about the actions they are taking or planning to take in response to tariff challenges, 40% mentioned they would need to raise product prices, 35% were looking to cut costs, and 28% aimed to diversify their procurement sources by rebuilding their supply chains.
Regarding their investment strategies in the United States, the responses were somewhat reassuring for U.S. business interests: 62% of the companies stated that their investment plans would remain unchanged, while 27% expressed intentions to expand investments. Only 1% indicated that they might scale back their plans, suggesting that despite the hurdles posed by tariffs, Japanese firms still view the U.S. market as a priority.
