The number of elementary and junior high school students attending the two Japanese schools in Shanghai has dropped by 260 to 2,791 in the new academic year that started Monday, school authorities said.

Local Japanese trade officials say the reduction was partly the result of a smaller presence of Japanese business expatriates because of cost-cutting measures and increased local operation of Japanese businesses.

Severe air pollution in major Chinese cities and chilly political ties between Japan and China have apparently also led Japanese expatriates to keep their children in Japan.

According to local real estate agents, an increasing number of Japanese businesspeople are leaving their families in Japan when they are moved to China.

Shanghai is home to the largest Japanese community in China.