Japan Is Leaving China. America Should Roll Out the Welcome Mat
Japanese firms in China fell to a record low of 10,118. Japan is already America's top foreign investor. In our view, Washington should turn that exodus into American jobs and factories.
By Clara Hughes
ALTAS WORLD NEWS OPINION | By Clara Hughes, Chief Opinion Editor | October 5, 2026 | 6-min read Japanese companies are leaving China in record numbers. Teikoku Databank counted only 10,118 Japanese firms operating there as of June, the lowest figure since it began tracking the data in 2010 [1][2]. That is not a rumor. It is a corporate credit firm's count. In our view, America should treat the exodus as an opportunity: Japan is already our largest foreign investor, and Japanese capital looking for safer ground should find it here. Key Takeaways Japanese companies in China fell 22% from June 2024 and about 30% from the 2012 peak of 14,394 firms. In two years, 4,137 withdrew and only 1,221 entered [1][2]. Topix-listed firms now derive about 35% of profits from the U.S. market, up from 25% in 2020, while China's share has fallen below 15% from 23%, according to estimates cited by CNBC [1]. Japan was the top foreign investor in the United States at the end of 2025, with a position of $776.3 billion by country of foreign parent and $827.1 billion by ultimate beneficial owner, according to the Bureau of Economic Analysis [3]. Supply chains are politics by another name. When Japanese manufacturers retreat from China and lean into America, that is not only a market story. It is a national-security story about who builds what, and where. What the Numbers Show CNBC, citing Teikoku Databank's report released last week, says Japanese firms are reassessing China amid a slowing Chinese economy and a diplomatic freeze [1]. Teikoku's own release puts the June 2026 count at 10,118 firms, down 2,916 from 2024, and says withdrawals hit a record while new entrants hit a low outside the pandemic years [2]. The diplomatic backdrop matters. CNBC reports that China-Japan ties worsened after Prime Minister