updated 12/1/2007 2:37:10 AM ET 2007-12-01T07:37:10

China and Japan inaugurate talks on trade and economic issues Saturday that are intended to bolster the recent warming in their long uneasy relations.

The half-day of talks and a weekend of meetings bring together the countries’ ministers holding foreign affairs, finance and economic portfolios to discuss a range of issues and are modeled after similar dialogues China holds with the United States and the European Union.

Only two modest agreements are expected — one on a $420 million loan to China to fund six environmental projects, the other a treaty to allow the countries’ police and prosecutors to work directly and bypass diplomatic intermediaries.

But the parlays follow stepped up rapprochement between the two sides following divisive disputes over territory and gas resources in the East China Sea and amid tense rivalry for regional influence. In the past two weeks, the countries’ prime ministers held an amiable meeting at a regional summit in Singapore and Chinese naval ships made the communist country’s first port call to Japan.

“We hope we can discuss future relations between our two nations and through mutual efforts promote more progress in relations between our two nations,” Japanese Foreign Minister Masahiko Koumura said to his Chinese counterpart, Yang Jiechi, in a Saturday morning meeting ahead of the afternoon’s economic dialogue.

Significant disputes persist
Besides the two agreements, Japanese officials said they hoped to settle dates and other details for Prime Minister Yasuo Fukuda’s planned visit to China and a reciprocal trip to Japan by Chinese President Hu Jintao, perhaps during the cherry blossom season in April.

Despite the apparent efforts to stress the positive, significant disputes persist. Decades of waxing and waning suspicions have flared in recent years as China asserts its growing economic, diplomatic and military power while Japan, the world’s No. 2 economy, struggles to maintain its influence.

Chief among Japan’s concerns are China’s continued exploitation of the Chunxiao gas field that straddles disputed waters in the East China Sea. The governments have held 11 rounds of talks on the issue, and though they have agreed to develop the field jointly, they have failed to settle on how to do so.

“Both sides need to make further efforts on the issue,” according to a briefing paper issued by Japan for the weekend meeting. Tokyo has explained to Beijing “the severe atmosphere concerning the issue in Japan and the importance to gain progress.”

Economic ties, which softened tense political relations, have begun to sour as Japanese companies complain that China is blocking acquisitions of Chinese firms. While China, including Hong Kong, is Japan’s No. 1 trade partner, Japanese investment in China fell 30 percent last year, to $4.6 billion, from the previous year, according to the Japanese Foreign Ministry.

In a sign of their shifting economic relations, the loan agreed Saturday is the last Japan will provide under a development assistance program that lends money at low, non-commercial interest rates.

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