SINCE 1951, Japanese companies have invested about $88.8 billion in Hong Kong, according to figures from the Ministry of Finance in Tokyo. About 1,650 Japanese companies had set up offices in the territory by last year, and this figure had jumped to 2,000 this year, according to statistics from the Hong Kong Japanese Chamber of Commerce and Industry (JCCI). ''There are several reasons for this [rise],'' said Toshiya Ugai, secretary-general of the Hong Kong JCCI. ''It has a central location in Southeast Asia, is the gateway to China, [has] an excellent infrastructure, a laissez-faire trade policy, low tax rate and a highly educated and dedicated workforce. ''Japanese companies are looking abroad for opportunities because of the recession at home, and one of the most attractive areas is southern China. ''Direct investment is not necessarily the best course of action, so they set up offices here and employ local staff to go to Shenzhen and use their knowledge and experience to work out deals. ''For this reason, I believe direct investment by Japanese companies will continue in Hong Kong.'' More than 670 firms are members of the JCCI - a non-government organisation which grew out of the economic division of the territory's Japanese Club, founded in 1955. By 1968, the number of Japanese companies in Hong Kong had grown so much that it became an entity in itself, dedicated to representing members' interests, providing information for them, enhancing trade links, and promoting friendship with local bodies. ''We [now] have 673 members, including 24 foreign associate members,'' said Mr Ugai. ''We have 12 departments covering industries such as textiles, construction and heavy machinery and finance. These organise activities for their members, including regular meetings,'' said Toshiko Nakajima, deputy secretary-general of the organisation, whose members include Japan Airlines, Daiwa Securities, Sanyo Electronics and Aiwa International. The department with the biggest number of members is finance, with banks, accounting and securities companies. Firms pay a joining fee of $3,000, and annual fees range from $2,600 to $13,000, depending on the company's size. ''We provide a monthly newsletter to our members with economic news about Hong Kong and China, in which interest is naturally high,'' said Mrs Nakajima. ''It also includes explanations of new ordinances in the territory which might affect or interest readers. ''We also arrange regular seminars [and] these are always well attended. Japanese companies want any information they can get about doing business on the mainland. ''We hold joint two-day conferences with the Japanese chamber in Beijing twice a year.''