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Came across this sentence: "Japanese don't like foreigners living in Japan" and was wondering if foreigners' would be better because it would be an adjective modifying living in Japan.
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Not every -ing verb is a gerund. I am sure the sentence does not mean to say that Japanese don't like "living" in Japan. It is ridiculous. Using foreigners with an apostrophe here actually makes the sentence mean this.
The original sentence is correct and conveys the meaning clearly.
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