A number of Chinese affiliates of Japanese companies , including Daiwa House and Rhythm Watch , have been plagued with failures of corporate governance . Accounting irregularities that have been spotted include the misappropriation of money at the Chinese JV of construction firm Daiwa House Industry and under - reporting of cost prices at watchmaker Rhythm Watch . These oversights are partly due to an over - reliance on Chinese partners for accounting but also because low morale among workers due to poor pay and a slowing Chinese economy are making bankruptcy more likely . Japanese companies are increasingly experiencing difficulties abroad as their domestic market shrinks .
A number of Chinese affiliates of Japanese companies, including Daiwa House and Rhythm Watch, have been hit with failures of corporate governance. Accounting irregularities that have been spotted include the misappropriation of money at the Chinese JV of construction firm Daiwa House Industry and under-reporting of cost prices at watchmaker Rhythm Watch. These oversights are partly attributed to an over-reliance on Chinese partners for accounting but also because low morale among workers due to poor pay and a slowing Chinese economy are making misbehaviour more likely. Japanese companies are increasingly seeking growth abroad as their domestic market shrinks.