Japan, China must get ties back on track

Japan and China must repair strained ties for the sake of the global economy, but rebuilding trust will take more than a high-level hand-shake, Japanese chief cabinet secretary Yoshito Sengoku said on Saturday.

Ties between the the world's two biggest economies sank to their lowest in years after Japan's Coast Guard detained a Chinese trawler skipper whose boat collided last month with two Japanese patrol ships near disputed islands in the East China Sea. The uninhabited islands are claimed by both countries and near potentially huge oil and gas reserves.

"The biggest -- I won't say only -- but the biggest centre of growth in the world economy is Asia," Sengoku said in an interview at the prime minister's official residence, one day before Prime Minister Naoto Kan heads for an Asia-Europe summit.

"To further develop Asian economic growth, what is needed more than anything is the enrichment, strengthening and development of strategic, mutually beneficial relations between Japan and China," he added.

Japan released the boat captain last week and has been urging calm, while China has said it does not want the ongoing dispute to worsen ties further. But relations remain strained.

Sengoku, the de facto No 2 in Kan's cabinet, said he could not predict whether Kan would meet Chinese premier Wen Jiabao when the two attend the Asia-Europe summit in Brussels next week, but suggested restoring trust would be a complex process.

"It is necessary not merely to shake hands at a high level but to link this to restoring trust at a practical level. I am not pessimistic, but neither am I optimistic."

Sino-Japanese ties are plagued by China's memories of Japan's past military aggression, rivalry over territory and resources, and Tokyo's suspicions as Beijing spends big chunks of its growing wealth on modernising its military and turning its navy into a blue power fleet that can project its power.

At the same time, the two economies have grown ever more interdependent, with China -- now overtaking Japan as the world's second biggest economy -- replacing the United States as Japan's biggest trading partner last year.

The dispute has raised concerns in Japan and elsewhere about the risks contingent on China''s growing economic clout, but Sengoku said the problem was not Japan's alone.

"The world economy has become one and is mutually interdependent. This is not just a risk for Japan," he said, noting that China could also suffer economically if its relations with Japan, the United States and Europe deteriorated.

"(The question is) to what extent does China share the common rules and values of international society," he added.

"What is fundamental is to urge (China) to act responsibly as a major power in international society."

China imposed a de facto ban on shipments of rare earth metals vital for products such as electronics and cars after the trawler captain was held. Exports have since resumed and a senior Chinese industry official told Japan's trade minister on Saturday that China would work to resolve the issue of stalled exports of the vital elements, Kyodo news agency reported.

Four Japanese businessmen were also held on suspicion of violating a Chinese law regarding the protection of military facilities. Three were released and came home on Friday.

Kan has come under heavy fire domestically for appearing to cave into China's demands. On Saturday, nearly 1,000 conservative activists rallied in Tokyo to assert Japan's claim to the islands and blast the government's handling of the affair.