An NHK survey of major Japanese companies has found that nearly half of them expect the prospects for business with China in 2026 will be “tough.”

NHK conducted the survey of 100 firms between December 12 and January 8.

Seventy-one companies responded to the questions about China.

The results come amid worsening Japan-China relations after Prime Minister Takaichi Sanae made a remark in the Diet about a possible Taiwan emergency.

Asked about the outlook for business with China, 4 percent of the respondents said business with China will be very tough, and 45 percent said it will be somewhat tough. Forty-nine percent said it will remain unchanged, and 1 percent said it will be somewhat brighter.

In response to a multiple choice question about specific concerns, restrictions on human exchanges topped the list with 46 percent. Forty percent of the respondents cited fears that sales in the Chinese market will decline due to such reasons as boycotts of Japanese products. Another 40 percent were worried that exports of rare earths and other critical minerals will be restricted.

Another multiple choice question asked companies what kind of strategy they are considering about business with China. Rebuilding supply chains was selected by 23 percent, while 10 percent said they could shift toward ASEAN and other overseas markets.

Many respondents indicated they would make efforts to reduce reliance on China, while 14 percent said they intend to strengthen cooperation with Chinese companies.

Asked about the impact of tariff measures by the administration of US President Donald Trump, 86 companies responded.

Among these, 51 percent said the tariff measures have major negative effects, 31 percent said they have no impact, and 17 percent said the impact was mixed with the same degrees of positive and negative aspects.

The survey asked about responses the companies are implementing or considering in the wake of the tariff measures. Forty percent said raising prices of their products, 35 percent said cost-cutting, and 28 percent said rebuilding supply chains, such as diversifying procurement sources.

As for their US investment plans, 62 percent said their plans remain unchanged, 27 percent said they will expand their investment, and 1 percent said their plans will be scaled down. Their answers suggest that companies apparently attach importance to business in the US despite the tariff measures.