This study examines how Japanese firms change their product portfolio in response to the surge of imports from China. Using the comprehensive Japanese plant-product level panel data set, we examine the impact of import competition on their product churning behavior. We found that the import competition pressures do affect the product churning for multiproduct plants. Besides, the negative effects of import competition are mitigated by increased export opportunities. This effect is more pronounced especially the year before 2007. However, its impact on the plant-level reallocation is somewhat limited. Negative effects on plant-level sales and exit behavior are observed only for a single product-plant.