Japanese companies are increasingly abandoning a way of doing business in China that once seemed immune to politics, a marked change after years in which they were the biggest investors in their neighbor’s economy.
In an era of geopolitical risks and concerns about China’s faltering growth, the economic math is no longer adding up for companies like Nippon Steel, which said in July it was exiting its joint venture in China. Mitsubishi Motors last year indefinitely suspended its local operations, citing falling auto sales and China’s rapid shift to electric vehicles.
Nearly half of Japanese companies in China surveyed in a recent study said they would not increase spending or cut investment this year. Companies cited rising wages, falling prices and geopolitics as the biggest issues they faced.
