Japan and Taiwan Companies Flee China Together! Canon Shuts Factory, Foxconn Lays Off 100,000

Japan and Taiwan Companies Flee China Together! Canon Shuts Factory, Foxconn Lays Off 100,000

In 2025, geopolitical tensions between China and Japan, along with the strategic rivalry between China and the US have triggered a wave of Japanese and Taiwanese companies leaving mainland China. On November 21st, Canon’s sudden shutdown of its Jong Shan factory marked a key moment in this trend. Canon’s announcement, which circulated online, cited the rapid decline of the laser beam printer market and the rise of Chinese BP brands as key factors behind the company’s struggles. Despite efforts to adjust, the situation could not be turned around. After careful consideration, Canon decided to halt operations in China on November 21st. Canon Jong Shan had been operating in China for 24 years as a whollyowned subsidiary of the Japanese company. It focused on manufacturing and selling office equipment and was one of Jongan’s largest industrial employers, contributing significantly to the local economy and job market. However, after the announcement, thousands of workers suddenly found themselves unemployed. Many expressed shock on social media with some questioning whether the closure was due to financial issues or if geopolitical factors played a role. One worker commented, “Can a Fortune 500 company just shut down like this? Are we supposed to deliver food or drive for ride hailing services now?” Most workers were concerned about their future. One shared, “In 2019, we were optimistic and didn’t fear losing our jobs. Now the anxiety is unbearable. My colleagues feel the same way.” Blogger Asia Finance on X remarked that if financial problems were the main issue, companies would typically try layoffs, pay cuts, or financing, not immediately close factories. He suggested the shutdown might be more about avoiding political uncertainties. This is not an isolated event, but part of a wider trend of Japanese companies withdrawing from China, marking the end of an era when foreign capital dominated China’s manufacturing sector. On November 26, a survey by Nikay Asia revealed that increasing business risk and declining market share have pushed Japanese companies to reduce their reliance on Chinese manufacturing and sales. The ongoing tensions between China and Japan has only amplified the risk of doing business in China. Japan’s investment in China has fallen sharply. According to Japan’s external trade organization, investments dropped by over 30% in the first half of 2025. In early November, Chinese users noticed that Sony Xeria WeChat service account displayed a self-cancellation notice and the mobile section disappeared from Sony China’s website. Pages showing older products could no longer be accessed. Additionally, Sony Xperia’s official Wayboard account has not been updated since March. An anonymous Japanese electronics insider in China explained that the decline in Sony phone sales in China along with adjustments to service centers reflected a broader re-evaluation of Japanese companies operations in the country. He added that the appeal of the Chinese market for Japanese company is diminishing and Japanese expatriots are feeling less secure in China. Some Japanese employees families including those holding Chinese citizenships have already started returning to Japan. So which Japanese companies or brands have reduced or seized operations in China in 2025? Across industries from automobile to retail, a wave of withdrawals have begun. Mitsubishi Motors exit has been one of the most notable cases. In 2024 fiscal year, Mitsubishi Motors saw a 53% drop in sales in China and other Asian markets, selling only 7,000 units. Faced with mounting losses and a shrinking market share, Mitsubishi announced in early 2025 that it would seize production and sales of vehicles in China, closing its joint venture factory in Chong Sha, Hunan. Another company, Panasonic, continues to invest in China, such as setting up a subsidiary for electric vehicles in Shanghai. However, the company is scaling back its traditional consumer electronics business. In 2025, Panasonic announced it would stop producing low-end microwave ovens, rice cookers, and other small appliances in China, closing production lines in Tenjing and Hanjol. Toshiba has also reduced its presence. After selling its television brand license in 2018, Toshiba’s products in China are now sold under private labels. Sharp has not fully exited, but has seen its market share for products like smartphones and televisions fall below 0.5%. In 2025, Sharp quietly removed several smartphone product lines from its Chinese websites and shifted its focus on commercial displays and medical equipment. Tamura Electric, which operates 11 production and sells bases in China, reported in November that it would begin producing current sensors in Saitama Perfect, Japan in December and sell off a joint venture in China. The company plans to reduce its production in China by 30% by 2028 and expand production lines in Mexico and Europe. Report suggests TDK Corporation is moving its battery production out of China by the end of 2025. It plans to start producing smartphone batteries modules in Hurana, India. A TDK employee in Dalian confirmed the company’s reduced production in China which is having a significant impact on local workers in the service sector. Family Mart closed nearly 100 stores in northern China in 2025, focusing on the Yansi River Delta and Pearl River Delta regions. While Toshi Noa has not fully exited, it has paused expansion plans in second and third tier cities, shifting some locations to franchise or joint venture models to reduce risks. This trend follows the sharp escalation of tensions between China and Japan in 2025. Japanese Prime Minister Sana Takahuchi recently suggested that Japan’s self-defense forces might intervene if an emergency arose in Taiwan, triggering a strong reaction from Beijing. In response, China sent warships to patrol disputed water near Japan, issued travel warnings for Japan, hinted at restricting Japanese seafood imports, and applied economic pressure on Japanese businesses. This diplomatic crisis has spread to the business world. A report from Japan’s external trade organization revealed that more than 20 business engagements between China and Japan were cancelled, leading to a loss of corporate confidence. Many Japanese companies sensing growing insecurity are shifting operations to Vietnam and other Southeast Asian countries. Professor Ichiro Korogi, a China expert at Japan’s Kanda University of International Studies, said Takaii has clarified she won’t retract her remarks. He noted that Beijing’s actions have actually increased her public support in Japan, adding, “The more pressure China applies, the more united the Japanese people become.” Amidst China’s expanding military presence in the region, Japan and Taiwan are growing closer. On November 15, Japan and Taiwan signed an intelligence sharing agreement and reaffirmed support for Taiwan at the G7 summit. Economics has become a key pillar of Japan Taiwan cooperation with over 80% of bilateral trade in 2025. Taiwan Semiconductor Manufacturing Company TSMC built a factory in Kumamoto, Japan, which began production in April 2025. This marks the formation of a semiconductor alliance aimed at diversifying risk tied to China’s pressure. In Taiwan, Japan’s firm stance towards China has boosted public support with calls to buy more Japanese seafood, including scolops. Meanwhile, the Taiwanese government has lifted all food import restrictions from Japan, including seafood imposed after the 2011 Fukushima nuclear disaster. Recently, President Lai Chinte posted a video of himself enjoying sushi, including scallops from Hokkaido and Amberjack from Kagoshima, Japan. President Lint said, “What do you all eat? Maybe it’s a good time to enjoy Japanese food.” He also mentioned that his lunch included local squid and tamagoyaki made with Taiwanese eggs, symbolizing the strong friendship between Taiwan and Japan. In the first half of 2025, Taiwanese businesses saw a historic surge in capital outflows with investments in China falling to just 2.7%. This shift is part of a broader trend where Taiwanese companies are accelerating their exit from China. On November 18th, Jingpa Electronics, a company with nearly 30 years of history in Donguan, Chan Town, announced it shutdown. At its peak, the company employed over 10,000 people and was one of Donguan’s tops exporters. Famous vlogger Ying Dian confirmed that after the last batch of employees received their compensation, Jingba Electronics completed its liquidation by 2025. The company has moved its operations to Thailand, joining other major factories in Chan like Jing Bao, Guang Bao, Pushi, Fujitsu, Shingan Footwear, and Fuan Dying, all of which have closed. Jingba’s move out of China has been ongoing for more than a decade. In 2015, the company quietly moved production lines from its Fun Huang plant to Thailand, leading to the sudden loss of over 3,000 jobs. Founded in 1996 as part of Taiwan’s Jirea Group, Jing Bao initially invested more than hund00 million US and covered 170,000 square meters. The company produced products ranging from calculators to printers supplying global brands like HP, Dell, and Canon. The broader trend of Taiwanese companies leaving China is driven by ongoing US China trade tensions, rising geopolitical risk, increasing labor cost, and a more challenging business environment in China. According to a survey of Taiwanese businesses, over 63% of companies exiting China have chosen Southeast Asia as their new base. In 2025, Apple moved 40% of its iPhone production to India, impacting China’s contract manufacturing industry. For years, China had been Apple’s main production hub with Taiwanese owned Foxcon and Chinese companies forming a vast manufacturing cluster in the Pearl River and Yanzi River deltas. As production moves out of China, Foxcon has faced empty production lines and layoffs. Recently, Foxcon in Denjo has been reported as eerily quiet with his business district nearly empty, raising suspicion that they might be pulling out. There are even rumors saying that Foxcon in Shenzhen is going to dismantle its production lines. So, what’s really going on with Foxcon? Has it just completely collapsed? And it’s not just Foxcon. Factories in Shujo, Quinshan, and Donguan have also been reported this year as not hiring new staff and even laying off older workers. Hey folks, it looks like Foxcon is totally done for now, including the Foxcon campus in Lua, where more than a dozen departments have been completely wiped out. Everything’s on pause. We’re not sure exactly why. Maybe it’s due to a drop in orders or other reasons. But what’s clear is that when the work shifts end, all the workers are being let go immediately, although still working there aren’t even getting overtime. A lot of the workers are saying they’re only getting 8 hour shifts. And a couple of days ago, I even asked some of the top managers inside about what’s really going on. They said it might be until mid December before anything is finalized. On October 27th, Foxcon workers filmed large crowds waiting to process their resonations. Recent reports suggest that Foxcon is planning to restructure its operations in China with nearly 100,000 jobs at risk due to an industrial upgrade. This news sparked widespread concern as Foxcon’s moves often affects the entire electronics manufacturing sector. Supply chain sources indicate that the iPhone Air released in China on October 22nd sold only 50,000 units in 2 weeks. A stark contrast to the strong sales of the iPhone 17. Due to the weak sales, Foxcon dismantled most of its production lines, expecting to cease production by the end of November 2025. The intensifying US China rivalry has accelerated this trend. The American first policy under the Trump administration pushed for supply chain diversification, urging allied companies to move out of China. Taiwanese companies caught in the middle of the US China tech war have been particularly quick to leave. On November 27th, Taiwan’s Wealth Magazine chairman Shed Chingho wrote on Facebook that the worsening relations between China and Japan have hastened Japanese company’s exit from China. For the first time in October, Taiwan’s exports to the US surpassed those to China. Sher pointed out that US tariff and investments have reshaped the global industrial layout since Trump took office and the new decoupling trend is becoming clearer. Shingho noted that Taiwan’s export structure has shifted significantly. In October, Taiwan’s export to the US reached 21.1 billion US or 34% of total exports, while exports to China were 14.3 billion or 23.2%. For the first 10 months of 2025, Taiwan’s export to the US grew by 63.3% to 151.6 billion, while exports to China grew by just 13%, totaling 138.9 billion. This marks the first time Taiwan’s export to the US have exceeded those to China. Notably, Taiwan’s trade surplus with the US surged to 112 billion US, surpassing last year’s total of 73.9 billion, while the surplus with China was 63.1 billion. This shows the growing decoupling trend between China and the US. Shared Chingho emphasized that Taiwan’s ICT and semiconductor industries are increasingly tied to the US economy, especially with major investments like TSMC’s 165 billion US in the US. This could grow to 400 billion, further strengthening the shift away from China. China’s Ministry of Commerce recently reported that foreign direct investment in China fell to 8.5 billion US in the third quarter of 2025, a 51% drop from the previous quarter and a 92% decrease from the peak in the first quarter of 2022. This sharp decline reflects a lack of confidence in China’s economic future. Once a hub for global capital, China now faces a retreating tide with empty industrial parks and rising unemployment. Economists have raised alarms about China’s economic future. US-based China expert Chen Xiao Nong warned that China’s economic miracle is over and recovery is unlikely. He urged the public to prepare for a long downturn. As foreign businesses continue to leave, China’s unemployment rate is hitting new highs. Chen warned that structural unemployment could lead to social instability. Consumer confidence is at an all-time low with retail sales growing only 3.2 2% in the third quarter of 2025, far below prepandemic levels. People’s wallets are empty and their spirits are low. China’s economic downturn in 2025 is no longer a cyclical problem, but a full-scale collapse. With the real estate sector in crisis, supply chain broken, rising graduate unemployment, and early retirements for middle-aged workers. The country faces a generational unemployment crisis. While state media continues to project an image of prosperity, the general public is filled with despair, believing that tomorrow will be worse.

In 2025, geopolitical tensions between China and Japan, along with the strategic rivalry between China and the US, have triggered a wave of Japanese and Taiwanese companies leaving mainland China. On November 21, Canon’s sudden shutdown of its Zhongshan factory marked a key moment in this trend.
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