A summary of the survey results is as follows.
（1）Japanese manufacturers’ overseas business operations maintained a recovery trend from the Covid-19 pandemic, but their attitude toward strengthening and expansion slowed somewhat. Last fiscal year, companies showed signs of recovery from the pandemic, and this year, both the overseas production ratio and the overseas sales ratio increased from the previous year, maintaining the recovery trend. However, against the backdrop of the Russian invasion of Ukraine, heightened geopolitical risks associated with the prolonged conflict between the U.S. and China, and the slowdown trend in the Chinese economy, the actual results for FY2023 are expected to remain almost flat in both the overseas production ratio and the overseas sales ratio. Companies are also more cautious in their future domestic and overseas business development stance compared to the previous fiscal year.
（2）In the ranking of promising countries, India maintains the top position, far ahead of the others. The U.S. and China dropped in the rankings, with Vietnam in second place for the first time.
As for promising countries over the next three years, India maintained its top position by gaining support in a wide range of industries and leading the others in terms of the percentage of votes. China dropped to third place, against a backdrop of various growing concerns, including the prolonged conflict between the U.S. and the slowdown of the economy. Although the U.S. is highly rated as a market, the recent rise in labor costs and other factors are believed to have contributed to the decline in the vote share. The decrease in the U.S.-China vote share was distributed among the top ASEAN countries, Mexico, and other countries. Vietnam, which is expected to be the recipient of the ex-China vote share, came in second place for the first time.
（3）While reviewing the supply chain, there was continued dependence on China. Increased geopolitical risk has led to a move to strengthen domestic investment.
Although there is a move to review raw material procurement in the supply chain in response to rising geopolitical risks, such as the U.S.-China confrontation and the Russian invasion of Ukraine, China continues to be a significant source of raw materials and parts that are difficult to replace. On the other hand, Japanese firms' sense of unease about doing business in China has grown significantly as China's domestic regulations are tightened and the investment environment deteriorates, and the tightening of U.S. regulations on China is having an actual impact on business operations. Although the transfer of production from overseas to Japan has been limited to a small number of companies primarily in the electrical and electronics industries, there was a positive attitude toward strengthening domestic investment, while also taking into account government subsidies and other preferential measures.
（4）Global price hikes are driving cost reductions and other efforts, while at the same time, price shifting is underway.
Approximately 90% of the companies indicated that they are affected by the global price hikes of energy, materials, parts, etc., and are under pressure to reduce energy use, cut costs, etc. Approximately 70% of the companies have passed on the higher prices to their customers. However, some companies are unable to pass on the higher prices due to lack of understanding from their customers, competition with other companies, and other reasons.
（5）Efforts to decarbonize have progressed mainly among large companies. Efforts to address biodiversity and human rights issues are limited due to difficulties in understanding.
Approximately 65% of companies are making progress in their decarbonization efforts. Companies are taking into account the requirements of their customers, the initiatives of their competitors, and trends in decarbonization technologies in their efforts to decarbonize their operations, with some differences in progress depending on the size of the company and industry. Biodiversity and human rights issues, which were not widely addressed in last year's survey, were found to be difficult to understand, to have a lack of specialized human resources, and to have low awareness within industries.
