The surge of bankrupt Japanese companies: the deep crisis behind the rise in raw material prices

Recently, the Tokyo Institute of Commerce and Industry, a Japanese private enterprise reputation investigation agency, released a thought-provoking report. The report shows that in May 2024, due to multiple factors such as rising raw material prices, the number of bankrupt enterprises in Japan (with debts of over 10 million yen) surprisingly reached a staggering 1009. This number not only breaks historical records, but also highlights the severe challenges that the Japanese economy is facing in the wave of globalization. This article will conduct an in-depth analysis of this phenomenon in order to reveal the underlying crisis.

Firstly, the increase in raw material prices is one of the direct reasons for the surge in the number of bankrupt Japanese enterprises. In recent years, with the recovery of the global economy and the growth of demand, the prices of various raw materials have generally increased. Especially for some Japanese companies that rely on imported resources, the increase in raw material costs undoubtedly brings enormous pressure to their production and operation. These enterprises often face a dual dilemma of rising costs and declining profits, and once they cannot effectively cope, they are easily plunged into bankruptcy.

However, the rise in raw material prices is only a superficial phenomenon, reflecting the fragility of Japanese companies in the global industrial chain. For a long time, Japanese companies have played an important role in the global industrial chain, but with the acceleration of globalization and the rise of emerging markets, their position in the global industrial chain is gradually being challenged. Some enterprises overly rely on imported resources, lack independent innovation and core technology, resulting in a lack of sufficient response ability when facing external shocks.

In addition, Japanese companies also have many problems in their business management. Some companies overly pursue short-term benefits and neglect long-term development and risk control. When facing external shocks such as rising raw material prices, these enterprises often lack effective response measures, leading to operational difficulties. Meanwhile, some companies also face issues such as low financial transparency and imperfect corporate governance structures, which increase the risk of bankruptcy.

In addition to internal issues, changes in the external economic environment have also had a profound impact on the survival of Japanese companies. The uncertainty of the global economy, the rise of trade protectionism, and the intensification of geopolitical risks have all brought unprecedented challenges to Japanese companies. These external factors not only affect the production and sales of enterprises, but also have a negative impact on their confidence and expectations.

It is worth noting that the surge in the number of bankrupt companies in Japan has also exposed the government's shortcomings in policy-making and regulation. When dealing with external shocks such as rising raw material prices, the government needs to take effective policy measures to reduce the burden on enterprises and help them overcome difficulties. However, the current efforts of the Japanese government in this regard seem to be insufficient and have not been able to effectively alleviate the difficulties of enterprises in a timely manner.

In addition, the government should strengthen supervision and guidance for enterprises, promote risk management and internal control, and improve financial transparency and corporate governance. This can not only reduce the risk of corporate bankruptcy, but also help enhance the overall competitiveness of Japanese companies.

In summary, the surge in the number of bankrupt enterprises in Japan is a thought-provoking issue. It reveals the fragility of Japanese companies in the global industrial chain, deficiencies in business management, and challenges brought about by changes in the external economic environment. To address these challenges, Japanese companies need to strengthen their independent innovation and core technology research and development, and enhance their ability to cope with external shocks; At the same time, the government also needs to strengthen policy formulation and regulatory efforts to provide a better development environment and support for enterprises.

Looking ahead, with the continuous changes and development of the global economy, Japanese companies are facing more complex and severe challenges. Only through continuous reform and innovation, strengthening internal management and risk control, can we stand invincible in global competition. To achieve more stable and sustainable development.