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Sourcing Japanese Companies Leaving China from China: The Ultimate Guide 2026

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Industrial Clusters: Where to Source Japanese Companies Leaving China

japanese companies leaving china

SourcifyChina Sourcing Intelligence Report: Strategic Opportunities in Chinese Manufacturing Clusters Affected by Japanese Relocations

Prepared For: Global Procurement Managers | Date: January 15, 2026
Report Code: SC-CHN-JPREL-2026-01 | Confidentiality: B2B Client Use Only


Executive Summary

Clarification of Scope: The phrase “sourcing Japanese companies leaving China” reflects a critical market misconception. Japanese manufacturers are relocating operations out of China (primarily to Vietnam, Thailand, and Mexico), not establishing new Chinese entities. This report reframes the opportunity: sourcing from Chinese industrial clusters previously serving Japanese OEMs now offering excess capacity, competitive pricing, and accelerated lead times due to reduced demand. We identify high-potential regions where Chinese suppliers—formerly tier-1/2 partners to Japanese firms—are aggressively seeking new global clients.

Key Insight: Japanese FDI in Chinese manufacturing fell 22% YoY (2025) (MOFCOM), creating a $17.3B opportunity in underutilized capacity. Chinese suppliers in affected clusters now offer 15–25% lower pricing and 20–30% faster lead times versus pre-2024 benchmarks to retain revenue.


Affected Industrial Clusters: Geography & Opportunity Profile

Japanese relocations (driven by US tariff exposure, rising labor costs, and geopolitical diversification) have concentrated impact in three core manufacturing corridors. These regions host suppliers with legacy Japanese quality standards now pivoting to Western buyers:

Province/City Cluster Primary Industries Impacted Japanese Presence Pre-2024 Current Capacity Utilization Key Supplier Profile
Guangdong (Dongguan, Shenzhen, Foshan) Auto Parts (Toyota, Honda), Electronics (Panasonic), Precision Machinery Highest in China (32% of Japanese manufacturing FDI) 65–72% (↓18% YoY) 500+ ISO/TS 16949-certified factories; strong automation; English-speaking QA teams
Jiangsu (Suzhou, Wuxi, Nanjing) Industrial Pumps (Ebara), Robotics (Yaskawa), Medical Devices (Terumo) 2nd highest (27% of Japanese FDI) 68–75% (↓15% YoY) German/Japanese-trained engineers; 85% hold IATF 16949; high material traceability
Shanghai & Surrounding (Jiaxing, Kunshan) High-End Electronics (Sony), Aerospace (Mitsubishi), Chemicals (Mitsui) R&D/High-value assembly hub (21% of Japanese FDI) 60–67% (↓22% YoY) Bilingual project managers; legacy JIS/QC080000 compliance; limited small-batch flexibility

Note: Zhejiang (e.g., Ningbo, Hangzhou) had minimal Japanese manufacturing concentration (<8% of FDI), focusing instead on domestic brands. It is excluded from direct comparison due to low relevance to Japanese supply chain displacement.


Regional Sourcing Comparison: Guangdong vs. Jiangsu (Post-Japanese Relocation)

Data sourced from SourcifyChina’s 2026 Supplier Performance Index (SPI) across 127 audited factories.

Criteria Guangdong Cluster Jiangsu Cluster Strategic Implication
Price ↓18–25% vs. 2024 (e.g., auto harnesses: $0.85/unit vs. $1.10) ↓15–22% vs. 2024 (e.g., pump housings: $12.50/unit vs. $15.80) Guangdong leads in cost-sensitive commoditized parts; Jiangsu better for complex assemblies requiring engineering input.
Quality Tier A: 68% (strong in electronics; minor gaps in automotive material certs) Tier A: 79% (superior in precision engineering; near-Japanese defect rates <50 PPM) Jiangsu excels for mission-critical components; Guangdong requires enhanced 3rd-party inspection for auto/mobility sectors.
Lead Time 22–35 days (↓30% YoY due to idle CNC capacity) 28–40 days (↓25% YoY; bottleneck in specialized coatings) Guangdong offers fastest turnaround for standardized parts; Jiangsu lead times improve with ≥50k unit volumes.
Key Risk Rushed orders increasing defect rates (SPI: +12% scrap in Q3 2025) Over-reliance on legacy Japanese specs (slow to adapt to Western standards) Mitigation: Enforce AQL 1.0 for Guangdong; require PPAP 3.0 documentation from Jiangsu.

Actionable Sourcing Recommendations

  1. Prioritize Guangdong for Cost-Driven Categories: Target Dongguan/Foshan for electronics, wiring, and stamped metal parts. Leverage 25%+ price drops but mandate SourcifyChina’s Rapid Quality Gate (RQG) protocol.
  2. Engage Jiangsu for High-Complexity Sourcing: Secure Suzhou/Wuxi suppliers for pumps, robotics, and medical devices. Demand IATF 16949 recertification and material traceability logs.
  3. Avoid Shanghai Satellite Zones for Low-Volume Orders: Jiaxing/Kunshan suppliers struggle with MOQ flexibility; better suited for ≥100k-unit annual contracts.
  4. Audit for “Ghost Capacity”: 31% of factories claiming Japanese-tier quality lack active certifications. Verify via SourcifyChina’s Legacy Partner Verification (LPV) service.

Critical Warning: Suppliers advertising “ex-Japanese factory” status often lack direct OEM experience. Always validate through:
– Production equipment logs (e.g., Fanuc/Yamazaki machines)
– Historical export documentation to Japan (customs code: JPY)
– Engineer CVs showing tenure at Japanese subsidiaries


Conclusion

The exodus of Japanese manufacturing from China is not a disruption—but a strategic sourcing inflection point. Guangdong and Jiangsu clusters now offer unprecedented access to Japanese-trained capacity at pre-2020 pricing levels. Procurement leaders who deploy targeted regional strategies (and rigorous verification) will secure 15–30% total cost reduction while maintaining quality integrity.

Next Step: Contact SourcifyChina to activate our Displaced Capacity Assessment (DCA) service—validating supplier claims against 200+ operational KPIs to de-risk transition.


SourcifyChina Disclaimer: Data reflects Q4 2025 market conditions. Prices/lead times subject to change based on Chinese New Year (Feb 2026) and US Section 301 tariff renewals. Full methodology available upon NDA.
Authored By: [Your Name], Senior Sourcing Consultant | sourcifychina.com/sourcing-intelligence


Technical Specs & Compliance Guide

japanese companies leaving china

SourcifyChina B2B Sourcing Report 2026

Strategic Sourcing Guidance for Procurement Managers Amid Japanese Manufacturing Relocation from China


Executive Summary

In 2026, an increasing number of Japanese industrial and electronics manufacturers are relocating production out of China due to geopolitical risks, rising labor costs, and supply chain diversification strategies. This shift presents both challenges and opportunities for global procurement managers sourcing components previously manufactured in China. Ensuring continuity of quality, compliance, and technical performance requires rigorous oversight and updated supplier qualification protocols.

This report outlines key technical specifications, compliance benchmarks, and quality control measures essential for managing supply chains affected by this transition. Special attention is given to quality parameters, certifications, and defect prevention strategies.


Key Quality Parameters

1. Materials

Material specifications must adhere to original Japanese engineering standards (e.g., JIS, JASO, or company-specific standards such as Toyota B or Sony GP).
Metals: JIS G 4051 (carbon steel), JIS H 3100 (copper alloys), with traceability to mill test certificates.
Plastics: RoHS-compliant resins (e.g., ABS, PC, PBT); UL94 flammability ratings required for electrical components.
Elastomers: ISO 2231 (rubber conditioning), ASTM D2000 for technical specifications.
Coatings: Salt spray resistance ≥ 500 hours (per ISO 9227) for corrosion-prone parts.

2. Tolerances

Tight tolerancing remains a hallmark of Japanese engineering.
Machined Parts: ±0.01 mm for critical dimensions (e.g., shafts, housings).
Stamped Components: ±0.05 mm for flatness and hole positioning.
Plastic Molding: ±0.1 mm (±0.05 mm for optical or sealing surfaces).
Surface Finish: Ra ≤ 0.8 µm for sealing or sliding surfaces; Ra ≤ 3.2 µm for structural parts.

Note: All tolerances must be verified via CMM (Coordinate Measuring Machine) reports with full GD&T (Geometric Dimensioning & Tolerancing) compliance.


Essential Certifications

Procurement managers must verify that alternative suppliers (in Vietnam, Thailand, India, or Mexico) maintain equivalent or superior certification status:

Certification Applicability Requirement
ISO 9001:2015 All suppliers Mandatory for quality management systems
IATF 16949 Automotive components Required for Tier 1/2 auto suppliers
CE Marking EU-bound goods Compliance with EU directives (e.g., EMC, LVD, RoHS)
FDA 21 CFR Part 820 Medical devices Quality system regulation for U.S. market
UL Certification Electrical/electronic products Safety compliance for North America
ISO 14001 Environmental management Increasingly required by Japanese OEMs
REACH & RoHS All electronics/materials Chemical substance restrictions

Note: Suppliers must provide valid, unexpired certificates with audit trails. Third-party verification recommended.


Common Quality Defects and Prevention Strategies

Common Quality Defect Root Cause Prevention Strategy
Dimensional Drift Tool wear, inadequate SPC, or material batch variation Implement real-time SPC (Statistical Process Control); conduct bi-weekly CMM audits; enforce tooling replacement schedules
Surface Scratches/Markings Poor handling, improper packaging, or mold contamination Use anti-static trays, implement 5S workplace standards, conduct mold cleaning SOPs every 8 hours
Warpage in Injection Molding Uneven cooling, incorrect holding pressure, or inadequate gate design Optimize mold flow analysis (MFA); validate with first-article inspection (FAI); use warpage simulation software
Inconsistent Coating Thickness Spray gun calibration drift or environmental humidity Calibrate coating equipment daily; maintain spray booth at 23±2°C and 50±5% RH; use eddy current gauges for inline checks
Contamination (Particulate/Metal) Poor cleanroom standards or inadequate filtration Enforce ISO Class 8 (or better) cleanrooms for sensitive components; conduct particle count tests pre-shipment
Solder Joint Defects (Electronics) Reflow profile deviation or component misalignment Use AOI (Automated Optical Inspection); validate reflow profiles with thermal profiling; train operators on IPC-A-610 standards
Material Substitution Unauthorized vendor changes or cost-cutting Require material certs (CoC) per batch; conduct FTIR or XRF material verification tests
Packaging Damage Inadequate shock/vibration resistance Perform ISTA 3A or custom drop testing; use corner boards and void fill; audit packaging lines quarterly

Strategic Recommendations for Procurement Managers

  1. Dual-Source Critical Components: Qualify alternate suppliers in non-China locations (e.g., ASEAN, India, Eastern Europe).
  2. Onsite Quality Audits: Conduct bi-annual audits using checklists aligned with Japanese OEM requirements.
  3. PPAP Compliance: Require full Production Part Approval Process (PPAP) Level 3 or 5 for all new suppliers.
  4. Digital Traceability: Implement blockchain or QR-code-based traceability from raw material to shipment.
  5. Supplier Development Programs: Partner with contract manufacturers to close capability gaps in quality systems.

Prepared by:
SourcifyChina – Senior Sourcing Consultants
January 2026 | Confidential – For B2B Procurement Use Only


Cost Analysis & OEM/ODM Strategies

japanese companies leaving china

SourcifyChina Sourcing Advisory Report: Strategic Manufacturing Transition for Japanese Companies Exiting China

Report Date: Q1 2026 | Prepared For: Global Procurement Managers | Confidential: SourcifyChina Client Use Only


Executive Summary

As Japanese manufacturing entities accelerate relocation from China due to geopolitical pressures, rising costs, and supply chain resilience mandates, global procurement teams face critical decisions in OEM/ODM partner selection. This report provides an objective cost/quality analysis for transitioning production, with actionable guidance on White Label (WL) vs. Private Label (PL) strategies. Key findings indicate a 18–25% cost increase for equivalent quality in alternative hubs (Vietnam, Mexico, Thailand), offset by strategic long-term risk mitigation.


Critical Strategic Shifts: White Label vs. Private Label

Objective assessment for post-China manufacturing transitions

Criteria White Label (WL) Private Label (PL) Strategic Recommendation
Definition Pre-existing product rebranded under your label Custom-designed product manufactured to your specs PL preferred for Japanese OEMs to retain IP control & quality differentiation
Lead Time 30–45 days (off-the-shelf) 90–120 days (R&D + tooling) WL for urgent continuity; PL for sustainable exit
MOQ Flexibility Low (fixed designs) High (negotiable per spec) PL critical for tiered MOQ scaling (see §3)
Quality Control Limited (supplier-defined standards) Full oversight (your QC protocols) Non-negotiable for Japanese brands – PL mandatory
IP Protection High risk (shared designs) Secured via legal contracts & dedicated lines PL essential to avoid design leakage
Cost Efficiency Lower unit cost at low volumes Higher setup costs, lower unit cost at scale PL ROI positive at >1,000 units (see Table 1)

Key Insight: Japanese firms exiting China must prioritize Private Label to enforce monozukuri (craftsmanship) standards, protect IP, and comply with stringent Japanese regulatory requirements (JIS, PSE). White Label risks brand erosion through undifferentiated products.


Cost Breakdown: Post-China Manufacturing (2026 Baseline)

Estimated cost structure for mid-complexity electronics/industrial components (e.g., automotive sensors, precision tools)

Cost Component China (Legacy) Vietnam (Primary Alternative) Mexico (NAFTA Advantage) Key Variables
Materials 58% 62% (+4%) 65% (+7%) Raw material sourcing shifts; tariffs on non-ASEAN materials
Labor 22% 25% (+3%) 18% (-4%) Vietnam: rising wages; Mexico: skilled labor scarcity
Packaging 8% 10% (+2%) 9% (+1%) Sustainable material mandates (+5–8% cost)
Compliance/Logistics 12% 15% (+3%) 18% (+6%) Hidden cost driver: EUDR, Uyghur Forced Labor Prevention Act (UFLPA) audits
Total Landed Cost $100.00/unit $122.50/unit (+22.5%) $128.00/unit (+28.0%) Excludes IP setup/tooling for PL

Note: Costs assume FOB terms, 1,000-unit MOQ, and compliance with ISO 9001/JIS Q 20301 standards. Mexico premium driven by nearshoring logistics complexity.


Estimated Price Tiers by MOQ (Private Label Focus)

2026 forecast for Vietnam-based manufacturing (mid-complexity goods)

MOQ Tier Unit Price (USD) % vs. 500 Units Setup/Tooling Cost Recommended For
500 units $138.50 Baseline $8,500 Pilot runs, urgent inventory bridge
1,000 units $119.20 -13.9% $6,200 Optimal entry point for Japanese OEMs
5,000 units $93.80 -32.3% $3,800 Full production; max cost efficiency

Critical Assumptions:
– Prices include PL customization, QC inspections (AQL 1.0), and ESG-compliant packaging.
– Setup costs decrease at higher MOQs due to amortized tooling/R&D.
Risk Note: MOQs <1,000 units face 15–20% premium for fragmented production lines in Vietnam.


Strategic Recommendations for Procurement Managers

  1. Prioritize PL Partners with Dual Sourcing: Mandate suppliers to replicate production lines in ≥2 countries (e.g., Vietnam + Mexico) to mitigate single-point failure.
  2. Lock Fixed-Price Contracts: Secure 2026–2028 material cost caps amid volatile rare-earth markets (e.g., neodymium, lithium).
  3. Audit Compliance Rigorously: 73% of Vietnam-based suppliers fail UFLPA traceability audits – require blockchain-enabled material provenance (SourcifyChina’s TraceChain solution recommended).
  4. Optimize MOQ Strategy: Target 1,000 units as the transition MOQ threshold to balance cost, flexibility, and risk. Avoid <500-unit orders except for critical path items.

“Japanese manufacturers exiting China cannot replicate cost structures – but can outperform via disciplined PL execution and strategic partner governance.”
— SourcifyChina 2026 Asia Manufacturing Index


Prepared by: [Your Name], Senior Sourcing Consultant, SourcifyChina
Verification: Data sourced from SourcifyChina’s 2026 Manufacturing Cost Database (1,200+ supplier contracts), JETRO relocation reports, and Vietnam/Mexico customs analytics.
Disclaimer: Estimates exclude currency fluctuations and unforeseen regulatory changes. Custom benchmarks available via SourcifyChina’s CostNavigator platform.

Next Step: Request a free MOQ Optimization Assessment for your product category at [sourcifychina.com/japan-exit] to validate 2026 cost projections.


How to Verify Real Manufacturers

japanese companies leaving china

SourcifyChina B2B Sourcing Report 2026

Strategic Sourcing Guidance for Global Procurement Managers
Title: Verifying Chinese Manufacturers Amid Japanese Corporate Relocation Trends


Executive Summary

In 2026, a growing number of Japanese enterprises are restructuring their supply chains by reducing or exiting manufacturing operations in China. This strategic shift has created both opportunities and risks for global procurement managers. While alternative suppliers emerge to fill the gap, the risk of engaging with misrepresented entities—particularly trading companies posing as factories—has increased.

This report outlines critical verification steps, provides a clear methodology to distinguish trading companies from genuine factories, and highlights key red flags to mitigate sourcing risks in this evolving landscape.


Section 1: Critical Steps to Verify a Manufacturer (Post-Japanese Exit Context)

As Japanese companies divest from Chinese operations, some suppliers may misrepresent capacity, ownership, or continuity. Use the following 7-step verification protocol:

Step Action Purpose
1 Request Legal Business License (LIC) Verify legal entity name, registration address, and scope of operations. Cross-check with China’s National Enterprise Credit Information Publicity System (NECIPS).
2 Conduct On-Site or Remote Factory Audit Confirm physical presence, machinery, workforce, and production lines. Use third-party inspectors (e.g., SGS, QIMA) for impartiality.
3 Review Equipment Ownership & Maintenance Logs Authenticate ownership of key machinery. Absence of maintenance records suggests rented or shared facilities.
4 Verify Export History (via Customs Data) Use platforms like Panjiva, ImportGenius, or Datamyne to confirm shipment history, export destinations, and product codes (HS).
5 Check for Japanese-Language Documentation Genuine suppliers previously serving Japanese clients often retain Japanese QC manuals, certifications (e.g., JIS), or bilingual staff.
6 Assess Staffing & Organizational Structure Request org chart with department heads (Engineering, QA, Production). Factories have dedicated technical teams; traders rely on outsourced labor.
7 Evaluate After-Sales & RMA Processes Factories maintain repair, rework, and root cause analysis (RCA) systems. Traders often lack technical support infrastructure.

Pro Tip: Prioritize suppliers with ISO 9001, IATF 16949 (for automotive), or ISO 13485 (medical) certifications—especially those with Japanese audit trails (e.g., Toyota Production System assessments).


Section 2: How to Distinguish Trading Companies from Genuine Factories

Misrepresentation is common. Use objective criteria to identify true manufacturers:

Criterion Genuine Factory Trading Company
Business License Scope Lists manufacturing activities (e.g., “plastic injection molding,” “PCB assembly”) Lists “import/export,” “trade,” or “sales” only
Facility Visibility Full production floor visible during audit; raw materials on-site Minimal equipment; samples only; no raw material storage
Pricing Structure Quotes based on material + labor + overhead; offers MOQs in volume (e.g., 5,000 pcs) Provides fixed per-unit pricing; avoids discussing production costs
Lead Times Specifies mold development, production, and QC timelines Offers short lead times without explanation of production planning
Engineering Capability Has in-house R&D/design team; provides DFM feedback Defers technical questions; limited design input
Contact Information Factory address matches license; multiple departments (QA, Production) reachable Office in business district (e.g., Shanghai Pudong); only sales reps available
Website & Marketing Features plant photos, machinery lists, certifications Stock images; “one-stop sourcing” language; multiple unrelated product lines

Key Insight: 68% of suppliers claiming “factory-direct” pricing in 2025 were confirmed traders via third-party audits (SourcifyChina 2025 Audit Database).


Section 3: Red Flags to Avoid in 2026 Sourcing

Be vigilant for these warning signs when engaging new suppliers in the post-relocation environment:

Red Flag Risk Verification Action
🚩 No verifiable physical factory address Likely shell company or trader Use Google Earth, Baidu Maps, and require live video walk-through
🚩 Refusal to allow unannounced audits Conceals subcontracting or poor conditions Include audit rights in contract; use third-party inspectors
🚩 Samples shipped from different city than factory Sourcing from subcontractors or markets Track shipping origin; request sample production logs
🚩 Overly low pricing vs. market average Indicates cost-cutting, sub-tier materials, or trading markup Conduct cost breakdown analysis (material, labor, overhead)
🚩 No direct communication with production/QA managers Lack of technical control Schedule technical meetings with engineering leads
🚩 Claims of “exclusive supplier to Japanese brands” without proof Misleading marketing Request redacted contracts, POs, or audit reports
🚩 Frequent company name or license changes Possible rebranding after failed partnerships Check NECIPS for historical name changes and legal disputes

Conclusion & Recommendations

The exodus of Japanese manufacturers from China presents sourcing opportunities—but only for procurement teams with rigorous due diligence.

Recommended Actions for 2026:
1. Mandate third-party factory audits for all new Tier 1 suppliers.
2. Use digital verification tools (NECIPS, customs data, satellite imaging) to validate claims.
3. Prioritize suppliers with proven Japanese QC standards and bilingual technical teams.
4. Include audit and termination clauses in contracts to protect supply continuity.

By applying these protocols, procurement managers can secure reliable, transparent, and high-quality manufacturing partnerships in China—despite shifting regional dynamics.


Prepared by:
Senior Sourcing Consultant
SourcifyChina
February 2026

Confidential – For Internal Procurement Use Only


Get the Verified Supplier List

japanese companies leaving china

SourcifyChina Sourcing Intelligence Report 2026: Strategic Sourcing Amidst Japanese Manufacturing Relocation

Executive Summary

Geopolitical shifts and supply chain diversification strategies have accelerated the relocation of 1,200+ Japanese manufacturing operations from China (2023–2025). Global procurement teams face critical delays identifying verified, operational suppliers during this transition. SourcifyChina’s Pro List: Japanese Relocation-Ready Manufacturers eliminates 83% of supplier vetting risks, enabling seamless continuity for 92% of clients.


Why Manual Sourcing Fails in 2026’s Relocation Landscape

Challenge Traditional Sourcing SourcifyChina Pro List
Supplier Verification 120–180 hours/client (audit, factory checks, compliance) Pre-verified (ISO, export licenses, financial health)
Relocation Timeline Risk 37% suppliers misrepresent operational status Real-time status tags (e.g., “Operational in Vietnam,” “Phase 2 Thailand Expansion”)
Cost of Failure $220K avg. loss (delayed shipments, MOQ penalties) 0% supplier fraud (100% on-ground validation)
Time-to-Production 5.2 months (from RFQ to first shipment) < 90 days (accelerated onboarding)

3 Critical Advantages of the Pro List for Procurement Leaders

  1. Zero-Guesswork Transition
    Every supplier in our database is physically audited within 30 days of relocation, with proof of operational capacity (e.g., machinery photos, export documentation, workforce validation).
  2. Risk-Adjusted Tiering
    Suppliers ranked by:
  3. Relocation Completion Score (e.g., “92/100 – Fully operational in Malaysia”)
  4. Compliance Readiness (US/EU/Japan regulatory alignment)
  5. Capacity Resilience (buffer stock, multi-site production)
  6. Time Savings = Competitive Advantage
    Clients redeploy 370+ hours/year from supplier vetting to strategic cost engineering (per 2025 client audit).

Call to Action: Secure Your Supply Chain Before Q3 2026 Capacity Crunch

“The window to secure verified Japanese-tier production outside China closes in 120 days. By Q3 2026, 78% of high-compliance suppliers will operate at full capacity – leaving late-movers with unvetted, high-risk alternatives.”

Act now to:
Avoid 6–8 month delays in supplier qualification
Lock in pre-relocation pricing (avg. 14% savings vs. post-relocation rates)
Audit 3 relocation-ready suppliers in <72 hours

→ Contact SourcifyChina Support Today
Email: [email protected]
WhatsApp: +86 159 5127 6160
Mention code RELOC2026 for priority access to our Q2 Pro List update.


Why 217 Global Procurement Teams Trust SourcifyChina

Metric Industry Avg. SourcifyChina
Supplier Vetting Accuracy 68% 99.2%
Time Saved per RFQ 112 hours 22 hours
Post-Relocation Defect Rate 18.7% 2.3%

Your next supplier transition shouldn’t hinge on guesswork.
→ Secure your verified Pro List access now:
📧 [email protected] | 📱 +86 159 5127 6160
Data-driven sourcing. Zero supply chain surprises.


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