As one of the big two economic engines of China, foreign investment in the Yangtze River Delta area is suffering more than most from higher costs "Although human resource costs are generally going up in China, the costs in the Yangtze River Delta (YRD) area have been rising even faster" says Liu Yuansen, a member of the Shanghai representative office of the Japan Exteal Trade Organization. At present, Shanghai and its surrounding area is home to at least half of the roughly 20,000 Japanese-invested companies in China. But for the small and mediumsized Japanese-invested companies, this area is losing its low cost advantage, particularly in terms of human resources and land. Last year, Japanese investment in China increased but the growth rate declined. In Shanghais neighboring province of Jiangsu, the number of Japanese manufacturing enterprises has reportedly started to decline.