The long and complex history between China and Japan, and in particular the 'Negative heritage' of the Second World War, has effectively alienated the two countries and led to a pervasive culture of Anti-Japanese sentiment throughout China. The widespread dissemination of anti-Japanese propaganda by the Chinese media has further contributed to this negative image of Japanese corporations. This pervasive climate of anti-Japanese sentiment has forced Japanese companies seeking to expand their businesses abroad to grapple with the unique challenges of navigating the highly politicized environment of Chinese harmonious society. Still, the success of any foreign companies in China fundamentally depends on whether China's market economy continues to develop in the face of harsh political conditions and growing social unrest. To date, only a handful of studies have addressed the effects of Chinese harmonious society on the performance of Japanese corporations operating in China. All of this has forced Japanese companies seeking to expand their businesses abroad to grapple with the unique challenges of operating within the highly politicized environment of Chinese nationalism. This begs the question: how should Japanese corporations respond to Chinese nationalism in pursuing their business objectives? This study is an attempt to fill that gap.