editorial

On Thursday, the Japanese Chamber of Commerce and Industry in China (JCCIC) released the White Paper on the Chinese Economy and Japanese Enterprises 2026 in Beijing. The white paper acknowledges that China provides "significant market opportunities" for foreign companies while also recognizing various concerning trends in China-Japan relations. It outlines three hopes: political and diplomatic issues between the two countries will not be allowed to spill over into corporate activities or cultural activities; high-level dialogue and exchanges between the governments of both countries will be held regularly and reliably, regardless of international and political circumstances; the Chinese government and relevant authorities maintain and strengthen dialogue with Japanese companies under all circumstances. Tetsuro Homma, president of the JCCIC, said that the proportion of Japanese-funded enterprises in China choosing to stay committed to the Chinese market is as high as about 85 percent, demonstrating the firm determination of the vast majority of Japanese companies to deeply cultivate the Chinese market.

Objectively speaking, Japanese businesses have consistently played a relatively rational and pragmatic role in China-Japan relations. China is Japan's largest trading partner, with over 30,000 Japanese companies operating branches there. The vast Chinese market and complete industrial chain ecosystem mean that Japanese companies cannot do without China. 

Given the current turbulent international situation and the strained bilateral relationship, the determination of Japanese companies to deepen their presence in China remains unaffected. This reflects both the genuine and enduring appeal of the vast Chinese market and the Chinese government's continuous efforts to create a stable, fair, and predictable business environment for global companies, including Japanese ones.

China has consistently taken a responsible attitude in responding to and addressing the problems and demands of Japanese companies operating in China. The restoration of visa-free entry for holders of Japanese ordinary passports has been widely welcomed by JCCIC and the business community. The continued operation of the Japan-China Business Environment Facilitation Working Group is considered by the white paper to be "of great significance to stabilizing bilateral relations." According to the survey released by the JCCIC in February this year, a total of 62 percent of companies expressed "very satisfied" or "satisfied" with the business environment.

By contrast, how has the Japanese government treated Chinese companies operating in Japan in recent years? According to the Report on the Business Environment in Japan 2024 released by the China Council for the Promotion of International Trade, nearly half of surveyed Chinese companies operating in Japan say that the over-securitization of economic issues is becoming more pronounced, while close to 40 percent report negative impacts on their investment and business activities due to Japan's economic security policies. By October 2024, more than 80 percent of Japan's anti-dumping measures targeted Chinese products. Tokyo has also imposed anti-dumping actions on Chinese battery materials and other goods, driving up compliance costs and operational risks for businesses. Companies further report that persistent negative media coverage of China and increasingly unfriendly public discourse have placed significant pressure on the brand image and day-to-day operations of Chinese firms in Japan.

Since the Takaichi government took office, it has intensified the imposition of geopolitical confrontation logic into the economic and trade fields, erecting technical barriers and industrial restrictions under the banners of "national security" and "economic security," while continuously fostering a climate of bloc confrontation. 

Since Takaichi advanced the claim that "a contingency in Taiwan" would constitute a "survival-threatening situation" for Japan, and repeatedly challenged the one-China principle, high-level official exchanges between China and Japan have effectively stalled, and many bilateral consultation mechanisms have fallen into inactivity. As diplomatic communication channels become increasingly constrained, government-business engagement has naturally become more difficult. The Chamber's hope for fuller communication with relevant Chinese government departments also highlights deeper concerns about the gradual erosion of public goodwill between the two countries.

Against this backdrop, the three hopes put forward by the JCCIC can be seen as a direct challenge to the Japanese government's wrong words and deeds, urging Japanese leaders to reflect on and correct their policies. At a time when Japan's security policies have shifted sharply to the right, anti-China sentiment is amplified in parts of the media, and businesses are bearing the consequences, it is the Japanese government that has become the primary source of political issues affecting commercial activities. The Chamber's first hope - political and diplomatic issues between the two countries will not be allowed to spill over into corporate activities or cultural activities - reflects the concerns felt firsthand by Japanese companies operating in China amid what they view as increasingly counterproductive policies from the Takaichi administration.

The Takaichi government must recognize a basic reality. With the yen remaining weak, domestic demand sluggish, and Japan's economic recovery already facing significant challenges, the continued loss of access to the vast Chinese market will only further burden key sectors of the Japanese economy, including manufacturing and tourism. 

If Tokyo genuinely seeks to secure a stable development environment for its own businesses, it should engage in serious self-reflection, reverse its misguided China policies and Taiwan-related rhetoric, stop using "economic security" as a pretext for trade protectionism, and cease fueling anti-China narratives in the public sphere.
Japan's business community should speak out to the Takaichi government. For the sake of the Japanese companies operating in China and the broader interests of China-Japan economic cooperation, Tokyo should promptly correct its erroneous China policies and abandon its confrontational mind-set. Only if Japan demonstrates sincerity and ceases actions and statements that undermine relations with China, can bilateral ties begin to emerge from their current difficulties.