Fewer Japanese companies say they’re planning to expand business in China, but some see potential in India, Brazil and other emerging and developing countries collectively known as the Global South.

This was the finding of a survey conducted by the Japan External Trade Organization, or JETRO, in August and September. More than 7,600 businesses responded.

Of 710 companies that do business in China, 27.7 percent said they plan to expand their businesses there in the next couple of years. This is the first time the figure has dipped below the 30-percent mark.

The percentage of companies positive about the future of business in China has declined rapidly, from about 41 percent in 2021 to 33 percent the next year.

This is thought to reflect uncertainty about the future of China’s economy, as well as its shrinking market for the gasoline-powered vehicles built by Japanese automakers.

The survey found a growing number of companies are planning to expand business in the so-called Global South.

Demand for vehicles is expected to grow in Brazil and India. Efforts are also growing to tap into other markets, such as South Africa.

JETRO Chairman Ishiguro Norihiko says that, overall, China’s economy is obviously slowing down but it remains an extremely important market for many Japanese businesses. He says businesses may not see bright prospects in China, in terms of its growth, but Japanese companies are trying to maintain their presence in this important market.