Recently, Sony, a Japanese multinational conglomerate, has closed its mobile phone-related accounts in China. Multiple businesses oriented towards the Chinese market within the Japanese manufacturing industry are undergoing contraction, with production capacity and investment layouts entering an adjustment phase. Official statistics from Japan show a decrease in the willingness to invest in China, and various research institutions point out that the proportion of Japanese companies expanding in China has dropped to a low point in over a decade.
In early November, Chinese users discovered that Sony’s Xperia WeChat service account was self-terminated, and the mobile phone category on Sony China’s official website disappeared, with pages displaying historical products unable to open. Sony’s Xperia official Weibo account has not been updated since March.
A Japanese electronics industry insider in China, known as Nakatsu, told reporters that Sony’s mobile phone sales in China have been declining, and the concentrated adjustment of service points reflects Japanese companies reevaluating their presence in China.
He mentioned that the attractiveness of the Chinese market to Japanese companies has decreased, resulting in a reduced sense of security for Japanese individuals living in China. Relatives of Japanese employees in Chinese branches have gradually returned to Japan, even including those who hold Chinese citizenship.
Many netizens commented on social media, expressing that Japanese mobile phones face competitive pressure in China, leading to a decrease in sales and an inevitable “withdrawal.” Some remarks noted that Sony has been unable to align with the local sales pace for years, and although their exit is regrettable, they still appreciate their products.
Aside from Sony, several Japanese manufacturing companies have been adjusting their production lines in China in recent years. Mitsubishi Motors announced in 2023 the cessation of car production in China and terminated its joint venture with Shenyang Aerospace Mitsubishi in July of the same year. The joint venture plant between Nissan and Dongfeng in Changzhou ceased production in 2024, with its original annual capacity of 130,000 vehicles.
A professional in the automotive industry in Wuhan wrote on a social media platform, stating that the decline in sales of gasoline cars and competition from new energy vehicles are putting pressure on traditional product lines.
Japanese household electronics have held a significant market share in China in recent years, but over the past five years, many Japanese companies have withdrawn from the Chinese market. Panasonic adjusted its Suzhou battery factory production line to Southeast Asia, while Sharp relocated part of its production line. Tamura Electric informed the media that the company would reduce its business scale in China by 30% and expand its capacity in Europe and Mexico, with completion expected before March 2028.
Tamura Electric currently owns eleven production and sales bases in China. According to Nikkei Asia, starting November, the company will produce current sensors near Tokyo in Saitama Prefecture, and in December, it will sell a joint venture company in China.
Commentaries indicate that the relocation of Japanese companies’ production capacity is becoming systematic, with regional choices trending towards diversification.
It is also reported that TDK is moving its battery core production out of China, planning to start producing smartphone battery modules in Haryana state, India before the year’s end. An employee at TDK Dalian informed the Epoch Times reporter that he heard the company would reduce production in China, impacting local employees significantly.
The Ministry of Economy, Trade and Industry of Japan released a report on Asian investment trends in January 2025, stating that Japan’s foreign direct investment in China has decreased since the COVID-19 pandemic. The report mentioned that changes in environmental regulations, energy costs, and labor prices are causing companies to continually review the distribution of their factories.
Mr. Shao, a former executive at an electronics company in Shenzhen, mentioned that Guangdong was one of the first regions in China where Japanese companies entered, but over the past decade, Japanese firms have been progressively withdrawing. Following the assault incidents on Japanese students in Suzhou and Shenzhen in 2024, the favorability of Chinese operations among Japanese employees declined, leading many companies to shrink their businesses due to safety considerations.
Mr. Shao explained that factors causing Japanese companies to withdraw include operational costs in China, the relocation of supply chains, and changes in the relationships between China and the US and Japan, as Japan is reducing its reliance on the Chinese market.
In a survey published in December 2024 by the Japan Bank for International Cooperation (JBIC), it was revealed that most Japanese manufacturing companies are continuously monitoring the business environment in China. The survey showed that 73.5% of companies are concerned about environmental regulations related to China, and when it comes to the negative impacts of strengthened environmental regulations, China was the most mentioned country at 51.3%.
Huang Ping, a researcher who has long studied the layout of foreign capital in China, mentioned that Japanese companies, which previously relied on the Chinese market, have been shifting towards Vietnam and India in recent years to diversify risks.
In publicly available documents, Tamura Electric stated its plans to reduce the proportion of production in China by 30% before 2028 and establish production lines in Mexico and Europe. A global trade and investment report released in January 2025 by the Japan External Trade Organization (JETRO) indicated that Japanese investment in China has decreased for the third consecutive year, reaching its lowest level since 2014. The report noted that Japanese companies are expanding their investments in India and ASEAN countries, with the establishment of manufacturing plants becoming more dispersed.
A researcher at Shizuoka University in Japan told the Epoch Times that the global production and sales ratio of Japanese manufacturing companies is diversifying, resulting in a decreased willingness to expand towards China. He mentioned that changes in cost structure and environmental regulations are leading companies to continually adjust their setups. An industry analyst in Beijing told reporters that while the Chinese market still holds significance, changes in the political environment are prompting foreign companies to realign their product lines.