Abstract: Since 2013,Japanese multinational corporations began a new adjustment period for direct investment in China.China is an important part of the Asian production networks constructed by Japanese multinational corporations and one of their major foreign markets. Analysis of these adjustments should not be limited to the discussion of Sinojapanese bilateral relationship under the changes in political conditions. It is necessary to place the analysis in the background of the trend of the world economic situation and technological development. This research analyzes the reasons for the adjustment of direct investment in China through four aspects: global economic situation, factor prices, adjustment of industrial structure, and technological advancement.

Key words: Japanese multinational corporations, Direct investment in China, Asian production networks, Costdriven, Marketdriven