Japan reduced its direct investments in China last year. Japan invested US$4.6 billion in 2,590 projects in China, down 29.6 and 20.77 percent respectively from 2005, according to statistics by the Commerce Ministry of China. By the end of 2006, Japan had launched an accumulated investment of US$58 billion in 37,714 projects. Japan mainly decreased investment in the Chinese manufacturing industry as the three largest Japanese automakers have begun production in China, the JETRO official said.

But the statistics did not count Japan's investments in China's finance, insurance and service sectors. According to data released by Japan's finance ministry, its direct investments in China totalled US$6.16 billion, a decrease of 6.3 percent year on year. Of the total, investments in the finance, insurance and service sectors reached US$1.57 billion. Japan also raised its investments in the logistics and retail sectors. Japan's investments in China accounted for 12.3 percent of its total last year.

China's technology imports from Japan increased 36.1 percent last year. According to a recent JETRO report, 69.8 percent of Japanese enterprises will continue expanding their investments in China and 5.5 percent plan to set up research and development centres in China.

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