A survey of Japanese companies operating in China has revealed that nearly half of them are cautious about making new investments in the country as uncertainty clouds its economic outlook.

The Japanese Chamber of Commerce and Industry in China polled its member companies about Chinese economic conditions and business environments last month. The organization's first survey of its kind received over 1,400 responses.

The results showed 57 percent of the respondents expected China's economy to worsen at least somewhat in the three months from October compared to the previous quarter. Thirteen percent expected it to improve somewhat.

Forty-seven percent said they were making less or no investment in China this year compared to 2022. Sixteen percent said they were expanding or significantly expanding their investment in the country.

Reasons cited by companies for reducing or suspending their investment included concerns about risks, slowing demand and growing market uncertainty due to regulations.

The Japanese companies' cautious investment stance aligns with the views of many other international firms which have been inclined to cut their investment in China amid the country's increasingly opaque economic prospects.