Since the start of the Diaoyu Islands dispute between China and Japan in September, Japanese firms operating in China are facing increasing negative sentiment, an economic slowdown, rising labor costs and frequent strikes. A number of Japanese firms have started to think about a withdrawing from the country.
"Japanese companies should learn how to leave China as soon as they enter the country," said Akihiro Maekawa, managing director of CAST Consulting, a Japanese firm that mainly provides services to Japanese companies in China. "They should now review corporate charters just in case."
(Read More: China and Japan Seek to Dial Down Tensions)
CAST has helped more than a hundred Japanese firms enter China over the past decade. However, in the past two years it has also helped a dozen leave.
Maekawa gave a CAST lecture at the end of January in Beijing entitled: "The export strategy and retreat practices of expatriates." In the talk, Maekawa said that since China became the world's second largest economy, it had been phasing out preferential taxes it used to offer to foreign businesses, and foreign enterprises have had to engage in fierce competition to survive.