Japan, China seek to prevent maritime friction

TOKYO (Reuters) - Japan and China agreed on Monday to set up an emergency hotline and set in place ways to prevent maritime friction sparked by Beijing's growing naval reach from getting out of hand.

Chinese Premier Wen Jiabao held to Beijing's cautious stance on the sinking of a South Korean warship, which Japanese Prime Minister Yukio Hatoyama has joined Seoul and Washington in saying was certainly torpedoed by North Korea.

Ties between the world's second- and third-largest economies have improved since 2006, when they set aside years of rancour centered on Japan's wartime occupation of Asia. At Monday's summit, wartime historical disputes did not come up.

Instead, the two leaders agreed on steps aimed at easing military tensions that have continued to keep a cool distance between the two Asian neighbors.

The two nations "must strengthen maritime crisis management and avoid the occurrence of antagonism and clashes," Wen told Hatoyama, according to China's official Xinhua news agency.

They also agreed to resume talks on jointly exploring disputed gas fields in seas between them.

Hatoyama came to office less than a year ago, vowing a more equal relationship with the United States and closer ties with China and other Asian powers. The summit with Wen, however, brought small steps, not big breakthroughs.

The hotline between Beijing and Tokyo would allow leaders to discuss quickly what Wen called "important issues" between the two nations, a Japanese government official said.

Wen later told Japanese business executives the huge economic flows between the two nations, with bilateral trade worth $238.7 billion last year, would cement closer ties.

"China and Japan have very close economic and trade ties. One could say they are at the point where neither could do without the other," said Wen.

Despite the displays of goodwill, including an early morning jog by Wen, sources of discord remain. China's increasing naval activities in seas near Japan have made Tokyo nervous.

"I told Premier Wen that Japan is concerned about China's activities," Hatoyama told reporters, referring to the naval moves.

Wen did not respond directly to Tokyo's concerns but the two leaders also agreed to set up a crisis management mechanism for maritime incidents, a Japanese official said.

The official Chinese report indicated the arrangement was not yet ready to start. The two sides agreed to "speed up establishing a maritime liaison mechanism between the two countries' defense departments', said Xinhua.

GAS FIELD TALKS, NORTH KOREA

Tokyo lodged a protest with Beijing in April after a Chinese helicopter flew near a Japanese destroyer in waters off Okinawa.

A group of Chinese warships was spotted earlier that month in the high seas near Okinawa. Beijing said the ships were in the area training and violated no international law.

The two nations have also argued over China's exploration for natural gas in the East China Sea, in areas Japan says could impinge on gas fields in its maritime jurisdiction.

In June 2008, they struck a broad agreement intended to solve the row by jointly developing the fields. Informal talks have recently started, but progress has been slow.

Wen and Hatoyama agreed to start formal negotiations on the issue as soon as possible. The official said that was a step forward, since China has long said the environment was not ripe for such talks.

For Hatoyama, the visit comes amid domestic gloom, since many voters have grown disenchanted with his government, and it may act as a reminder that China could soon displace Japan as the world's second-biggest economy after the United States.

Wen's visit to Japan, which began on Sunday, has brought no shift in China's position on North Korea.

China shares longstanding bonds with its communist neighbor North Korea and Beijing has been noncommittal about whether Pyongyang was behind the sinking of South Korea's Cheonan corvette on March 26, which killed 46 sailors.

Hatoyama has firmly backed the findings of a multinational investigation that blamed North Korea for torpedoing the ship, and agrees with Seoul that the U.N. Security Council should censure Pyongyang.

As a permanent member of the U.N. Security Council, China can veto any proposed resolution or statement.

Wen put on a black track suit in the early morning to jog through leafy Yoyogi Park in Tokyo, in a carefully managed effort to show a softer side of China.

Accompanied by panting guards and reporters, he greeted sometimes startled residents jogging or walking dogs, and joined some to practice traditional Chinese Taichi exercises.

"Do you know who I am?" he asked some of them. They did.

"The Chinese people send their greetings," he told others.

When Wen suggested joining some older ladies for their morning exercises, one of them politely noted that it was still 10 minutes before their usual starting time.

(Additional reporting by Chisa Fujioka, Editing by Linda Sieg and Nick Macfie and Ron Popeski)