(ECNS) -- The slowdown of China's economic growth, the market dip since June, and the depreciation of yuan have had little effect on the sentiment of Japanese firms operating in the country, according to a study released on Wednesday.
Carried out by the Japanese External Trade Organization (JETRO), it found that investment in China by Japanese firms has recovered from its downward slope since a record high of nearly $2.5 billion in the second quarter of 2013.
"The result shows a different picture from the general anticipation that confidence among Japanese firms here is low," said Yoshihisa Tabata, director general of JETRO,adding that the yearly average of $4 billion since 2014 doesn't necessarily indicate gloom.
This week, institutions such as Asian Development Bank and the Chinese Academy of Social Sciences have trimmed China's GDP forecast to 6.8 and 6.9 percent respectively. However, the study among 35 Japanese firms in China between June 11 and August 12 shows that they're not very concerned about the slowdown.
A mechanical manufacturer said he thinks China's economy will stabilize and that the market remains appealing with many demands to be filled.
In turn, a fiber manufacturer said he hasn't experienced any effects of the slowdown and that it may not be as serious as reported.
Given the fact that top officials in China and Japan have met more frequently in the past couple years, the 35 firms said that a better political environment has improved their confidence in Chinese operations.
Last November, Chinese President Xi Jinping met with Japanese Prime Minister Shinzo Abe during the APEC summit in Beijing. Five months later, the two met again in Jakarta while attending the 60th anniversary of the Bandung Conference. In May, Xi greeted a 3,000 delegation from Japan that included officials, businessmen and tourists.
China's stock market has lost nearly half its value since June, with the Shanghai Composite down from its high of 5,167 points to 3,116 points as of Wednesday. Although concerns of weaker consumption exist, a majority of the 35 companies said they haven't experienced anything bad so far.
"Even the government's crackdown on corruption has a bigger effect," said an automaker.
The majority of them said "yes" when asked whether they planned to expand their operations in the country.
"It's clear that the Chinese government wants to boost input in infrastructure," said an electronical equipment manufacturer. "We will improve investment in such areas as well as in automation."
An elderly care provider said its business will continue expanding as China's elderly population explodes.
According to the National Statistics Bureau, the population of those aged 65 or above exceeded 130 million, or 10 percent of the total by the end of 2014.
Another JETRO survey of 964 Japanese firms in China conducted in December 2014 showed companies that target the local market, including food providers and auto producers, are more likely to expand their operations than those that export to other countries. Also, larger, non-manufacturing firms are more willing to enlarge their businesses in China.
"Both Japanese investment in China and Chinese investment in Japan are beefing up," Tabata said. "Chinese visiting Japan are also on the rise. Consumption goods such as domestic appliances made in Japan continue to attract Chinese buyers for their quality, safety and design."