(Yicai) May 15 -- More than half of the Japanese companies with operations in China maintained or increased their investment in the country in the first half of the year, according to an official survey.

Twenty percent of the 1,741 Japanese firms in China polled by the Japanese Chamber of Commerce and Industry in China between mid-March and mid-April said they hiked their investment in the country in the three months ended March 31, while 24 percent claimed their investment in China remained unchanged in the period. Meanwhile, 56 percent of them reduced their investment.

The first two figures are 1 percentage point and 2 percentage points higher than in the fourth quarter of last year, according to the survey results published yesterday. The third figure thus fell 3 percentage points in the period.

The main reasons why Japanese companies in China increased their investment were the launch of new projects, construction of new production bases, enhancement of research and development capabilities, digital transition, decarbonization actions, and seasonal factors, such as the Chinese New Year holiday, the survey results also showed.

Many of the Japanese companies that reduced their investment in China in the first quarter said they still keep a positive attitude toward investing in R&D and human resources development, as they remain aware of the importance of the Chinese market, Tetsuro Homma, head of the JCCIC, said at the press release event yesterday.

Some 67 percent of the survey respondents said their major challenge in terms of business operation was increased labor costs in the first quarter, up 2 percentage points from the previous quarter, according to the survey.

For the whole year, about 56 percent of the 1,741 Japanese firms polled by the JCCIC said they would maintain or increase their investment in the country.

Investment willingness for this year among Japanese companies increased mainly because of changes in China’s macroeconomic environment, as they need to invest more if they want to survive in the local market, Homma noted.

Some 31,300 Japanese companies have operations in China, the highest number among countries worldwide, Homma pointed out. Thailand, which ranks second, has only 5,800.

Editors: Xu Wei, Futura Costaglione