Keizai Koho Center (KKC) hosted a seminar on the above topic, inviting Mr. Xinyu Liu, Partner Attorney of King & Wood Mallesons to share his expertise with Keizai Koho Center member corporations and exchange views. As a specialist in M&A, foreign investment, and international trade, Mr. Liu processes extensive knowledge and experience in corporate legal affairs. Approximately 40 executives and representatives of member companies operating in China took part in the event.

Challenges and Risks for Japanese Companies Operating in China
Given the evolving global landscape and changes in China’s economic conditions, many Japanese companies operating in China are reassessing their businesses and considering restructuring. The primary management challenges associated with this transition include rising labor costs—particularly for local staff—and the growing presence of local competitors. Despite these challenges, China remains a crucial market for Japanese businesses, and full withdrawal is rare. However, companies are increasingly focused on rationalizing and decentralizing their production bases. When withdrawing or restructuring their business, companies should be aware of the risks of negative publicity, particularly regarding labor disputes or the potential leakage of internal information by employees, as these issues can significantly impact corporate reputation.

Corporate Communications Amid Business Restructuring
During business restructuring, it is essential to communicate regularly with internal and external public relations professionals and to respond quickly to negative publicity and false information. Reporting false information or inappropriate accounts to social media platform authorities for removal can be an effective strategy, alongside issuing accurate statements through state media. To minimize the risk of information leaks, businesses should implement strict access controls, provide security training for employees, and ensure a unified source of official communication. Additionally, when corporate restructuring involves changes to a company’s name or logo, maintaining brand recognition and reputation is crucial. Companies should proactively disseminate information about these changes through various communication channels, ensuring that stakeholders remain well-informed and continue to recognize the brand accurately.