News & Updates

FY2023 JETRO Survey on Business Conditions for Japanese-Affiliated Companies Overseas (Global Edition)

Dec 28, 2023

-Business confidence worsens further, but positive signs exist in major countries in the emerging economies-

Overview of FY 2023 Survey

  • From late August to September 2023, JETRO has conducted an online survey on the state of Japanese companies (local subsidiaries with at least 10% Japanese investment, branches and representative offices of Japanese companies) in 83 countries/regions selected through JETRO’s overseas office network. A questionnaire was distributed and collected online to 18,726 Japanese companies and valid responses were received from 7,632 respondents. The effective response rate was 40.8%.
  • The latest trends are reported on in the outlook for performance in each country and region and the status of responses to new issues amid an increasingly challenging environment for international business, including inflation, a slowdown in the Chinese economy, heightened geopolitical risks, and an increase in regulations motivated by economic security.

1. The number of companies anticipating business expansion in China fell below 30%.

  • 63.4% of Japanese-affiliated companies overseas expect to be profitable in 2023, the first decline in three years. Deterioration in performance in China stands out. In South Korea, Hong Kong, Vietnam, and Singapore, the deterioration in business performance exceeded the improvement.
  • In China, the number of companies expecting to "expand" their business fell below 30% for the first time since the survey began. On the other hand, less than 1% of companies expect to "withdraw or relocate to third countries". This indicates a cautious attitude toward business continuity.
  • Strong domestic demand in major countries in the emerging economies, such as India, Brazil and South Africa is driving improved business performance for companies entering these markets. There is an increasing appetite for local business expansion with an eye to developing markets in neighboring countries and regions.

2. Awareness of business and human rights is growing worldwide, but small and medium-sized enterprises lag behind in their efforts.

  • More than 80% of companies recognize human rights in the supply chain as an important management issue. This is an increase of more than 20 points from the previous year. On the other hand, less than 30% of companies conduct human rights due diligence, unchanged from the previous year.
  • The report highlights the reality that the gap between large firms and small and medium-sized enterprises (SMEs) is widening in terms of respect for human rights and decarbonization efforts. The development of relevant laws and regulations in the countries where they operate is also considered to have affected the progress of their actions.

3. Inflation accelerates wage growth, especially in emerging economies.

  • The problem of human resource shortages is more serious in developed Western countries. In the U.S. and the Netherlands, more than 70% of companies face this problem.
  • Wage base increase rates (nominal) in 2023 are as high as 9.8% in India and 8% in Mexico. On the other hand, in major advanced European economies, wage base increases continue to be unable to keep pace with high inflation rates.

For more information, please contact:
Japan External Trade Organization (JETRO)
Research & Analysis Department (Representatives: Hirotoshi Ito and Mari Tanaka)
Tel: +81-3-3582-5177