"Japan can't survive economically without China's business, even if it's becoming more difficult to continue business as usual," says Shigeto Nagai, head of Japan economics for Oxford Economics.
Japan Inc. has tried to diversify... But investment has shifted only marginally to lower-cost Asian nations like Thailand and Vietnam.
[...]
Mutual advantage leads to profit. Japanese foreign direct investments in China returned 15% annually from 2015-20, compared with 6% in North America, Oxford Economics found. The yen's 20%-plus plunge against the dollar over the past year will squeeze those American returns further. Japanese executives, not surprisingly, name China as their top pick for future FDI.
[...]
Tokyo took a decoupling step of its own in April, pass the Act for the Promotion of Ensuring National Security Through Integrated Implemenation of Economic Measures.
[...]
Japan Inc. isn't so quietly pushing back. "The accumulation of business activities over many years serves as a key foundation that supports bilateral trade," Masakazu Tokura, chairman of the famed Keidanren business lobby, told Chinese Premier (since deposed) Li Keqiang in an online meeting last month.
"In the U.S., a hard line in China has been a political unifier," notes Shihoko Goto, director for Indo-Pacific enterprise at the Wilson Center. "In Japan, it has become a divisive issue."
~ Craig Mellow, "For Japan, Breaking Up With China Is Hard to Do," Barron's, October 29, 2022
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