A vendor arranges seafood in his store on November 19, 2025, in Tokyo, Japan. Photo: IC

A Reuters survey released on Thursday showed that Japanese companies said strained diplomatic relations with China are their primary concern as they head into 2026, followed closely by US trade policies. Chinese analysts believe the findings underscore growing alarm within Japan’s business community after Prime Minister Sanae Takaichi’s erroneous remarks on the Taiwan question, warning that such remarks could inflict significant damage on Japanese firms.

Asked what makes companies most concerned when forecasting business conditions next year, a quarter of survey respondents chose ties with China, while 22 percent picked US trade policies, according to Reuters.

Japan’s corporate concerns emerged against the backdrop of China-Japan relations hitting rock bottom, a downturn triggered by Takaichi’s erroneous remarks last month on the Taiwan question, experts said. 

Chen Zilei, director of the Research Center for Japanese Economics at Shanghai University of International Business and Economics, told the Global Times on Thursday that the erroneous remarks and provocative actions by Takaichi and some other Japanese politicians have seriously disrupted what should have been a stable trajectory for China-Japan relations, and have increased concern among Japanese firms about economic prospects between China and Japan. 

Driven by domestic political interests, these politicians have taken highly irresponsible positions on Taiwan-related issues, recklessly disturbing the regional atmosphere of peace and artificially generating bilateral tensions, Chen said. He warned that if Takaichi continues to advance an extreme political agenda, it will inflict “significant damage” on Japanese society.

China remains one of the most important sources of overseas profit for Japanese firms, and many Japanese-funded companies in China continue to maintain healthy profitability. 

“This is exactly why Japan’s business community is deeply alarmed by the reckless behavior of certain politicians – their actions directly undermine the core interests of Japanese companies,” Chen said. “These politicians are completely disregarding the real interests of their own corporate sector.”

Japan’s economy is already under mounting pressure. The Japan Times reported Monday that Japan’s GDP contracted at an annualized pace of 2.3 percent in the July–September period – a sharper downturn than the initial estimate of 1.8 percent – marking the first decline in six quarters. Xinhua reported last month that Japanese media and experts are concerned that the deterioration of Japan-China relations may lead to a negative economic growth for Japan in the fourth quarter.

Backlash against Takaichi’s provocative China-related stance has continued to mount inside Japan. Japanese scholars, former government officials and media figures held a press conference in Tokyo on Monday, urging Takaichi to immediately retract her earlier erroneous remarks, warning the comments could further strain Japan-China relations, Xinhua reported.

Amid the tensions and rising anxiety, some Japanese organizations, including the Japan-China Friendship Parliamentarians’ Union and Keidanren (Japan Business Federation), have previously conveyed to the Chinese side their willingness to visit China in the near future, according to media reports.
 
Responding to if China will arrange their visits, the Foreign Ministry spokesperson Guo Jiakun said on December 2 that “we noted the reports and also found that many visionary people in Japan are deeply concerned over the negative influence and grave consequences of Prime Minister Sanae Takaichi’s erroneous remarks on Taiwan.” 

The Chinese side urges the Japanese side to do soul-searching, rectify its wrongdoings, retract Takaichi’s erroneous remarks, stop harming the sentiments of the two peoples, take practical steps to honor its political commitments to China, and create necessary conditions for the normal exchanges between the two countries, the spokesperson said. “We hope relevant Japanese organizations will play a more positive role in Japan,” Guo added.

Chen stressed that Japanese business groups should recognize that the root cause of their current difficulties lies in Takaichi’s erroneous remarks, and they should urge the Takaichi cabinet to correct course.

He also pointed to China’s continued rollout of high-level opening-up policies, noting that “China has always adopted a supportive, encouraging and protective approach toward all foreign-invested enterprises, including those from Japan.”

Many Japanese companies remain committed to the Chinese market, according to a June white paper by the Japanese Chamber of Commerce and Industry in China. At that time, the survey found that 58 percent plan to increase or maintain investment in 2025, with many also noting an improving business environment.