A lot of Japanese companies are expanding their presence in China.Under the situation where they are expanding in China, localization isbecoming more important but is not progressing as expected. Why is notlocalization progressing in a Japanese company?In this paper, we think that the localization of management is the key tothe Chinese strategy in Japanese companies and examined the presentsituation and issues on the localization of Japanese companies.First of all, what stages will the enterprise go through globalization andlocalization? We will organize the development stages of overseas businessactivities by companies.Next, what is the localization of management? Through prior researchon the localization of management, we will define the localization ofmanagement.Furthermore, we will use the survey report based on the questionnaireby various organizations such as Ministry of Economy, Trade and Industry,Japan External Trade Organization (JETRO), Japan-China InvestmentPromotion Organization (JCIPO), etc. in order to grasp the current situationand problems on the localization of Japanese companies.In addition, we consider the reason why the localization in Japanesecompany does not advance by comparing examples of Japanese andWestern companies which are said to be localized in general and utilizingthe interviews between Japanese and Western companies executed byZhu. Finally, I would like to present a remedy for how to improve thelocalization in Japanese company.