JETRO provides comprehensive China trade and investment information, analyzing the country's economic structural changes and the current state of Japan-China economic relations through detailed market assessment and bilateral trade analysis.
Economic Growth Performance and Structural Transformation
Chinese economic performance in 2024 achieved real GDP growth rate of 5.0%, meeting government targets despite domestic consumption deceleration and external trade challenges. Economic growth drivers shifted toward export performance and infrastructure investment, compensating for reduced consumer spending and property sector adjustments.
Consumption growth slowed to 3.2% annually as household savings rates increased to 35.4% of disposable income, reflecting consumer caution amid economic uncertainty and property market corrections. Retail sales recovery remained modest with selective growth in electric vehicles, digital services, and premium consumer goods categories.
Manufacturing sector demonstrated resilience with industrial production growing 4.8% annually, led by electric vehicle manufacturing (23.4% growth), renewable energy equipment (18.7% growth), and electronics assembly (6.2% growth). Export competitiveness strengthened through technological advancement and supply chain optimization across multiple industries.
Japan-China Bilateral Trade Dynamics
Japan-China bilateral trade totaled 268.7 billion USD in 2024, maintaining position as second-largest bilateral trading relationship for both countries despite geopolitical tensions affecting business confidence. Chinese exports to Japan included electronics (23.4% of bilateral trade), textiles (16.7%), and machinery components (14.2%).
Japanese exports to China focused on industrial machinery (28.9% of exports to China), automotive components (18.3%), and precision instruments (12.4%), reflecting technological complementarity and supply chain integration despite political relationship challenges affecting long-term business planning.
Investment flows showed divergent trends with Japanese FDI in China declining 12.4% to 4.2 billion USD, while maintaining substantial operational presence through 13,400 Japanese companies employing 1.2 million Chinese workers across manufacturing, retail, and service sectors.
Technology Development and Innovation Capacity
Chinese innovation investment reached 3.1% of GDP in 2024, emphasizing artificial intelligence, biotechnology, renewable energy, and advanced manufacturing technologies. Patent applications totaled 1.89 million (34.7% of global total), with increasing focus on high-technology sectors and international patent protection.
Electric vehicle industry leadership includes domestic market dominance (67.8% market share) and expanding international exports reaching 1.2 million units annually. Battery technology advancement, charging infrastructure development, and autonomous driving systems create competitive advantages in global automotive markets.
Renewable energy manufacturing capacity includes 78.9% of global solar panel production, 45.6% of wind turbine manufacturing, and comprehensive energy storage system development. Chinese renewable energy exports generate 89 billion USD annual revenue while supporting domestic carbon neutrality objectives.
Market Access and Regulatory Environment
Foreign investment regulations continue liberalization through negative list reductions covering financial services, healthcare, and advanced manufacturing sectors. Foreign ownership restrictions eliminated in automotive manufacturing, financial services, and telecommunications services, creating expanded opportunities for international participation.
Regulatory compliance requirements emphasize data security, cybersecurity, and technology transfer regulations affecting international business operations. Companies must navigate dual-use technology export controls, data localization requirements, and intellectual property protection frameworks evolving rapidly.
Business environment challenges include increased regulatory scrutiny, geopolitical risk considerations, and supply chain resilience requirements affecting long-term strategic planning. Successful operations require comprehensive legal compliance, government relationship management, and risk mitigation strategies.
Regional Development and Urbanization Progress
Urbanization rate reached 67.8% in 2024 with continued migration to tier-one and tier-two cities driving consumer market expansion and infrastructure development. Regional development initiatives include western region development, northeastern revitalization, and central region rising strategies creating diverse investment opportunities.
Belt and Road Initiative continued implementation with international infrastructure projects, trade facilitation agreements, and investment promotion activities. Chinese overseas investment flows reached 156 billion USD annually, emphasizing infrastructure development, energy projects, and technology acquisition in participating countries.
Future Economic Outlook and Strategic Implications
Long-term economic projections suggest moderate growth deceleration to 4.2-4.8% annually through 2030, supported by technological advancement, service sector development, and urbanization completion. Economic rebalancing continues emphasizing domestic consumption, innovation-driven growth, and environmental sustainability.
Japan-China economic relationship evolution requires balancing commercial opportunities with geopolitical considerations, supply chain security requirements, and technology transfer sensitivities. Strategic positioning emphasizes selective engagement, risk management, and competitive advantage preservation.
The analysis concludes that China presents complex market opportunities requiring sophisticated risk assessment, regulatory compliance expertise, and strategic flexibility to navigate evolving political and economic conditions while maintaining competitive positioning in the world's second-largest economy.