Why the Japanese camera giant Canon mothballed its China factory
Canon’s abrupt decision to shutter its long-running printer factory in Zhongshan, Guangdong, has renewed attention on the increasingly strained relationship between China and Japan.
The plant, which opened in 2001 — the year China joined the World Trade Organization — had been a symbol of Japanese manufacturing strength in the Pearl River Delta.
At its peak it employed more than 10,000 workers. Until its closure on November 28, around 1,600 remained.
The company blamed “mounting cost pressures” and fast-changing market conditions for the closure. Production had already halted on November 21 as managers and labour representatives negotiated severance terms.
Canon pledged to meet all legal compensation obligations and offer additional payments, but the speed of the shutdown has amplified speculation that geopolitics, not just economics, played a role.
The announcement came during a sharp downturn in Sino-Japanese relations. Tensions escalated after Prime Minister Sanae Takaichi remarked on 7 November that armed conflict in the Taiwan Strait could pose a “survival-threatening situation” for Japan, potentially triggering Self-Defense Forces mobilisation.
While Tokyo has avoided escalating the row publicly, Japanese companies in China appear to be quietly reassessing their exposure. Planned business exchanges have been abruptly cancelled.
A delegation of senior executives from major firms — including Toyota and Sony — called off a scheduled November 25 trip to China, stalling what was expected to be an important round of commercial discussions. A 3,000-person friendship event was also scrapped.
Analysts in Chinese media say Japanese firms are pulling back at a notable pace. Commentators cite rising departures in Shandong and Shanghai and describe an emerging “exodus” of manufacturers seeking alternatives in Southeast Asia.
Some argue this trend is influencing other foreign investors from the US, UK and Singapore, who are reportedly accelerating moves to places such as Indonesia, Vietnam, the Philippines and Bangladesh. Even Chinese suppliers, they note, are following clients abroad.
Others caution that widespread foreign withdrawals could strain China’s job market, particularly in sectors that have long been supported by international manufacturers. Canon’s closure alone has left more than a thousand workers seeking new employment in a region where factory work is no longer as plentiful as it once was.
This story is written and edited by the Global South World team, you can contact us here.
