Japan's direct investment in China rose 19.8 percent to a record US$6.53 billion last year, a Japanese trade group said Monday.

Direct investment from Japan in 2005 ¡ª excluding banking, securities and insurance sectors ¡ª surpassed the previous record of US$5.45 billion registered in 2004, the Japan External Trade Organization (Jetro) said.

Japanese investment accelerated in the latter half of last year as companies that had remained cautious earlier in the year because of anti-Japan demonstrations regained confidence in China¡¯s market, the report said. Another major factor pushing up Japan¡¯s direct investment was a series of large-scale investments by Japanese automakers, along with Japanese auto parts makers that have moved to set up manufacturing bases in China, the report said.

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