Updated

Japanese businesses are exiting China at a historic rate, driven by a diplomatic freeze between Tokyo and Beijing, an unsafe operating environment, and China's slowing economy. Separately, Japan's storied century-old companies — many of which survived World War II and the country's 'lost decades' — are disappearing at an unprecedented pace in 2026. The twin trends reflect mounting structural pressures on Japanese enterprise, including rising costs, labor shortages, a shrinking domestic market, and succession challenges for family-run firms, alongside geopolitical strain that is reshaping Japan's economic relationship with China.