Recently, China-Japan economic cooperation has entered a new phase of growth. From February 16 to 21, 2025, a large delegation of 230 representatives, organized by the Japan Business Federation (Keidanren), the Japan-China Economic Association, and other groups, visited Beijing. This visit marks a significant step following the announcement in January by three major Japanese business organizations regarding their plans to visit China. During the visit, Chinese Vice Premier He Lifeng reaffirmed China’s commitment to advancing high-level opening-up and encouraged Japanese enterprises to expand their investments in China. In response, representatives from Japan’s business sector pledged to contribute more to mutually beneficial cooperation.
While Europe and the U.S. grapple with trade protectionism and industrial decline, China is positioning itself as a “stabilizer” of the global economy through its open-market approach. In early 2025, foreign-invested enterprises launched a new wave of investment in China. Companies such as Japan’s Lexus, Germany’s Volkswagen, and France’s Sanofi have all announced plans to expand their operations in the Chinese market.
In February 2025, Toyota announced the establishment of a wholly-owned Lexus electric vehicle and battery R&D and production base in Jinshan District, Shanghai. Production is set to begin in 2027, with an initial annual capacity of 100,000 units and an investment of approximately 5 billion RMB. This marks the second wholly foreign-owned electric vehicle factory in China after Tesla and the first time a Japanese automaker has independently operated a complete vehicle manufacturing project in the country. Toyota stated that this move aims to leverage the Yangtze River Delta’s well-developed supply chain and talent pool to develop models that “meet the needs of Chinese consumers.”
Toyota has broken away from its decades-long joint venture model by choosing to establish a wholly-owned electric vehicle production facility in Shanghai. Analysts point out that this decision not only reflects confidence in the potential of China’s electric vehicle market but also serves as a response to shifts in the global trade landscape. In recent years, the U.S. has frequently resorted to tariffs, while China has positioned itself as a “safe haven” for multinational enterprises by optimizing its business environment and lowering market entry barriers. Data shows that China’s new energy vehicle (NEV) penetration rate approached 50% in 2024 and is expected to reach 55% in 2025, with a market size far exceeding that of Europe and the U.S.
Recently, the International Monetary Fund (IMF) also raised its growth forecast for China’s economy. These developments reinforce a key fact: China is not only the “world’s factory” but also a “testing ground for the future economy.” In contrast, Ford in the U.S. plans to lay off 4,000 employees, while EU car sales have declined by 18% compared to 2019, highlighting the challenges facing Western manufacturing industries.
China’s well-developed electric vehicle (EV) supply chain is a key competitive advantage in attracting foreign investment. The Lexus Shanghai plant plans to achieve a 95% local component utilization rate, benefiting from the Yangtze River Delta’s dense network of global automotive suppliers. A senior Toyota executive acknowledged, “China has transitioned from a technology follower to a rule-maker.” This shift is driven by the demand for consumption upgrades from China’s 1.4 billion people. Meanwhile, the U.S. tariff policies under the Trump administration, which imposed additional duties on goods from China and other countries, have fueled domestic inflation. At the Munich Security Conference, multiple countries criticized these measures for “undermining global trade rules.” German Vice Chancellor Robert Habeck bluntly stated, “Unilateralism will only make American consumers pay the price.” The choices made by multinational corporations reflect the broader trend of the global economic center shifting eastward. As The Wall Street Journal put it: “In an uncertain world, China offers a rare sense of certainty.”
