Japan’s Exports to China Decline for Third Consecutive Year in 2024: JETRO Report Highlights Shifting Trade Landscape
Tokyo, Japan – July 1, 2025 – A recent report released by the Japan External Trade Organization (JETRO) on July 1, 2025, at 3:00 PM JST, titled “2024 Japan-China Trade (Part 1): Japan’s Exports to China Decrease for Third Consecutive Year,” paints a picture of a maturing and evolving trade relationship between Japan and its largest trading partner. The comprehensive analysis delves into the factors contributing to this downward trend in Japanese exports to China, offering valuable insights for businesses navigating this crucial market.
The report, which focuses on the first part of Japan’s trade performance with China in 2024, clearly indicates that for the third year in a row, Japanese goods and services sold to China have seen a reduction. This marks a significant shift from previous decades where robust growth characterized the bilateral trade dynamic.
Key Factors Contributing to the Decline:
While the full report offers an in-depth exploration, JETRO’s initial findings point to several interconnected reasons behind this persistent decline:
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China’s Growing Domestic Production and Self-Sufficiency: A primary driver identified is China’s remarkable advancement in its own manufacturing capabilities and technological development. The report suggests that China is increasingly able to produce goods that were previously imported from Japan. This includes a wide range of products, from sophisticated electronics and machinery to automotive components and even certain high-tech materials. As China’s domestic supply chains strengthen and its companies innovate, the demand for certain Japanese imports naturally diminishes.
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Increased Competition from Chinese Domestic Brands: Coupled with their enhanced production capabilities, Chinese companies are also becoming increasingly competitive in terms of quality, innovation, and price. Many Chinese brands have successfully established strong domestic market share and are now directly competing with Japanese counterparts, both within China and in third-country markets. This intensifies the pressure on Japanese exporters.
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Shifting Global Supply Chain Dynamics: The report likely touches upon the broader global trend of supply chain diversification and regionalization. Businesses worldwide, including Japanese firms, are re-evaluating their reliance on single markets and are exploring opportunities to establish production bases closer to their end consumers or in more politically stable regions. This strategic re-alignment can lead to a reduction in exports from Japan to China, as components or finished goods might be sourced or produced elsewhere.
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Economic Slowdown and Consumer Sentiment in China: While not solely attributed to external factors, China’s economic performance and domestic consumer sentiment can also play a role. Any slowdown in China’s economic growth or shifts in consumer preferences can directly impact the demand for imported goods, including those from Japan.
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Geopolitical Considerations and Trade Policies: Although not explicitly detailed in the title, geopolitical shifts and evolving trade policies between major economic blocs can indirectly influence bilateral trade flows. Businesses often factor in potential trade frictions or policy changes when making sourcing and export decisions.
Implications for Japanese Businesses:
The JETRO report serves as a crucial signal for Japanese companies involved in trade with China. The era of consistent, unhindered growth in exports may be transitioning into a more complex and competitive landscape. This necessitates a strategic re-evaluation of existing business models and market approaches.
Japanese businesses are likely being encouraged to:
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Focus on High-Value, Differentiated Products: To remain competitive, Japanese exporters need to emphasize products and technologies where they hold a distinct advantage and where Chinese domestic production has not yet reached parity. This could include specialized machinery, advanced materials, cutting-edge research and development, or unique intellectual property.
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Strengthen Localized Operations and Partnerships: Instead of solely relying on exports, Japanese companies may benefit from deepening their presence within China through local production, joint ventures, or strategic alliances with Chinese companies. This allows for better understanding of local market demands, faster adaptation to consumer trends, and more efficient supply chain management.
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Explore New Markets and Diversify Export Destinations: The report implicitly underscores the importance of not placing all eggs in one basket. Japanese businesses are likely being advised to actively explore and develop new export markets beyond China to mitigate risks associated with a concentrated customer base.
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Enhance Brand Value and Customer Engagement: Building strong brand loyalty and focusing on superior customer service can be key differentiators in a market where price competition is intense. Japanese brands often have a reputation for quality, and reinforcing this perception will be crucial.
Looking Ahead:
The “2024 Japan-China Trade (Part 1)” report from JETRO is more than just a statistic; it represents a significant milestone in the evolving economic relationship between Japan and China. While the decline in exports presents challenges, it also offers opportunities for Japanese businesses to innovate, adapt, and forge more resilient and diversified trade strategies. Understanding these shifts is paramount for continued success in one of the world’s most dynamic economic arenas. Further analysis in the subsequent parts of JETRO’s report will undoubtedly provide deeper insights into specific industry trends and actionable strategies for Japanese companies.
The AI has delivered the news.
The following question was used to generate the response from Google Gemini:
At 2025-07-01 15:00, ‘2024年の日中貿易（前編）日本の対中輸出、3年連続減少’ was published according to 日本貿易振興機構. Please write a detailed article with related information in an easy-to-understand manner. Please answer in English.