BEIJING, April 3 (UPI) -- Japanese investment in China in 2005 jumped 19.8 percent from a year earlier to a record-high $6.5 billion, a trade organization said Monday.

A report by the Japan External Trade Organization's Beijing office said Japanese investment grew in the latter half of the year, as companies that had held back due to anti-Japan demonstrations in April 2005 regained confidence in the Chinese market, Japan's Kyodo News reported.

Other reasons for the surge include a series of large-scale investments by Japanese automakers, which prompted car parts companies to set up manufacturing bases in China.

Electronics makers also bolstered their manufacturing capacities for products intended for the Chinese market.

In 2005 Beijing allowed wholesale and retail companies that are 100 percent foreign-owned to be established in China -- a move that also prompted increased Japanese investment.

However, investments from Hong Kong, South Korea and the United States fell, partly in reaction to the surge in investment in 2004.