Most Japanese firms don’t see China’s economy improving in 2024

Most Japanese companies in China cut investment or kept it flat last year, and a majority don’t have a positive outlook for 2024, with only a quarter saying they expect the economy to improve.

More than 400 companies said they cut investment in China last year, according to a survey of 1,713 firms by the Japanese Chamber of Commerce and Industry in China. That was slightly worse than the previous survey released in October, with almost 400 companies saying they didn’t invest at all last year. Only 15% of respondents said they increased investment.

The report confirms earlier data showing foreign companies becoming much less optimistic over the prospects for China’s economy, which has been battered by a housing slump and a weak rebound after COVID-19. Government crackdowns and controls have added to jitters for markets and some overseas firms. Official data late last year showed foreign direct investment falling to the lowest in four years in the year through November, even after the government rolled out various measures to try to lure foreign firms back.