JETRO published a report on September 16, 2025, analyzing strengths and initiatives of Japanese companies in China that maintain strong performance despite economic slowdown and intensified competition, based on survey and interview results.
Corporate Performance in Challenging Environment
According to the 2024 overseas Japanese company survey, 58.4% of Japanese companies in China expect operating profit to be in the black, the lowest level since the 2012 survey (57.2%) immediately after anti-Japan demonstrations. Additionally, 21.7% of companies responded expansion for business development direction in the next 1-2 years, the lowest since comparable data from 2007. However, 118 companies reported both operating profit prospects in black and business expansion plans, revealing that these companies possess different strengths and strategies from others.
Three Core Strengths of High-Performing Companies
Companies with both profit and expansion plans significantly outperform overall averages in three areas: performance and quality excellence, brand penetration, and human resources, each by more than 10 percentage points. They also score approximately 5 points higher in intellectual property and business models, indicating emphasis on differentiation through quality and branding rather than price competition. Follow-up interviews conducted by JETRO with 23 of the 118 companies (June-August 2025) identified specific success factors including industry brand penetration, cost reduction, new customer development, and new product launches.
Digital Utilization and Collaboration Strategies
Specific brand penetration initiatives include using TikTok live sales and WeChat SNS for product information dissemination to increase brand recognition. The importance of combining real and online approaches is also highlighted, with physical stores and real events necessary for connecting with core consumers. Furthermore, diverse approaches including cross-industry collaboration, partnerships with universities and research/medical institutions, and long-term continuation of proprietary events contribute to success.
Response to US-China Trade Friction
Regarding impacts from additional tariffs and countermeasures between the US and China, companies directly engaged in import/export are limited, with many reporting no direct or indirect impacts. When impacts occur, companies can respond through supply chain adjustments (e.g., shifting grain procurement from US to Brazil). However, some companies experience effects including extended export procedures for chemicals, sanitary materials, food exports, and motors using rare earth magnets.
The article evaluates that successful cases of Japanese companies achieving strong performance and business expansion through multi-faceted approaches including brand maintenance and enhancement, digital tool utilization, cross-industry collaboration, and human resource development in Chinas competitive environment provide important reference information for other companies strategic planning in China business.