China's trade minister concerned about falling Japanese investment - business delegates

BEIJING (Reuters) - China's trade minister is worried about Japan's falling levels of direct investment in his country, Japanese business officials who met him said on Tuesday, against a backdrop of strained ties between the world's second- and third-biggest economies.

Japan's direct investment in China fell nearly a fifth in 2013, and dropped another 40 percent to 300.8 billion yen (1.69 billion pounds) during the first half of 2014 from a year earlier.

The delegates, who spoke to reporters after meeting Trade Minister Gao Hucheng, were among some 200 Japanese business association officials led by Toyota Motor Corp.'s honorary chairman, Fujio Cho.

Their visit comes amid a slew of anti-trust probes by China's price watchdogs, which have attributed anti-competitive behaviour to Japanese auto parts producers, among other companies, such as Microsoft Corp. (MSFT.O) and chipmaker Qualcomm Inc. (QCOM.O).

In August, pricing regulator the National Development Reform Commission (NDRC) fined Japanese auto parts makers a record 1.235 billion yuan for manipulating prices as the government stepped up enforcement of an anti-trust law targeting major firms.

Gao told the delegates China did not want the chilly political relationship to slow economic activities, an association official who attended the meeting said.

The official asked not to be identified because of the sensitivity of the matter.

The delegation is likely to meet Vice Premier Wang Yang on Wednesday, association officials said, after its hopes of meeting President Xi Jinping or Premier Li Keqiang proved unlikely.

China has consistently blamed fraying bilateral ties on Japan, even as the leadership has called for Asia's two biggest economic powers to continue economic cooperation.

Tension between the two has been fuelled by a continuing row over a small chain of disputed islets in the East China Sea, known in China as the Diaoyu and in Japan as the Senkaku.

The NDRC summoned executives of Japanese carmaker Toyota this month over pricing policies and practices for spare and replacement parts at its luxury Lexus division, people with direct knowledge of the matter have said.

The questioning coincided with the first-ever punishments of foreign automakers for price-fixing, when fines were imposed on the Chinese venture of Volkswagen AG (VOWG_p.DE) and the China sales unit of Fiat's Chrysler (FIA.MI).

The slew of antitrust investigations has prompted complaints from foreign officials and the business community that foreign firms are being unfairly targeted.

(Reporting by Norihiko Shirouzu; Editing by Clarence Fernandez)