TOKYO — When Shunichiro Aoki first moved to Beijing in 1979 to represent Matsushita Electric Industrial Co., he ran a one-man operation out of his home. Now he is in charge of a sprawling television picture tube factory near Beijing with 2,000 employees. The consumer electronics giant recently announced plans to build new factories to manufacture air conditioners and compressors as well as sophisticated VCR components.

"By the year 2000, our Chinese operations will be about the size of our American and European operations," says Aoki confidently.

A year ago, Aoki's skeptical Japanese colleagues would have dismissed him as a dreamer. But now, hardly a day goes by without news of another Japanese factory going up in China.

After years of standing on the sidelines, Japan is investing in China on a scale unmatched since the 1930s when the Japanese invaded Manchuria and made it the industrial heartland of their Asian empire.

Last year, Japanese companies signed 2,000 investment deals in China worth $2.1 billion, up 250% from the year before. The companies hope to take advantage of China's low-cost labor to counter a soaring yen that threatens to make Japanese exports uncompetitive. And they are eagerly eyeing China's booming domestic market.

"There are 270 million households (in China) and the average savings account holds (the equivalent of) 100,000 yen ($940)," says Aoki. "Chinese families can afford to buy a lot of consumer products now."

Not all Japanese are as bullish as Aoki. Japanese companies have experienced so many boom and bust periods in China that "there isn't a lot of trust," says Kenji Hattori, chief manager of planning and coordination at the Japan-China Assn. on Economy & Trade.

Japanese Emperor Akihito took a major step toward building that trust last fall when he traveled to China and expressed "deep sadness" over the suffering Japan inflicted during its invasion and occupation of China.

"The emperor's visit opened a new epoch," says Hattori. "We can look to the future without being tied down by the past," he says. "China is no longer trying to (exploit the past) to force concessions from Japan."

A sign of Japan's confidence in the strength of the relationship was its recent decision to slap dumping charges against the import from China of silico-manganese, a product used in steel production. "We don't have to feel restrained anymore," says Hattori. "We can be frank and honest."