Realised Japanese investment in China plummeted 30.7 per cent year-on-year to 1.2 billion US dollars during the first six months of this year while Chinese exports to Japan decreased by 4.3 per cent, or 723 million US dollars, from the same period of last year to 16.1 billion during the first seven months of 1998.

``The fall in the Japanese yen is detrimental to Sino-Japanese trade and Japanese investment in China,'' the official China daily `Business Weekly' quoted Jin Baisong, an expert with the China academy of international trade and economic co-operation as saying.

Apart from Hong Kong, Japan has been China's biggest foreign investor over the past few years, resulting in 40 to 50 per cent of bilateral trade between the two nations.

However, the yen's recent tumble, in combination with the fierce competition generated by thecurrency depreciations in Southeast Asian countries, has slashed the profitability of Chinese exports to Japan, and in some cases has driven their prices below the production costs, Jin said.