Speaking a day after nationalists rallied against China and a senior ruling-party politician denounced Beijing, Foreign Minister Seiji Maehara insisted that the two countries were good neighbours.

"I believe Japan and China should seek a path for co-existence and co-prosperity by firmly building strategic, mutually beneficial relations as good neighbours," Jiji Press news agency quoted Maehara as telling reporters.

The remarks were in response to and downplayed reported comments by Yukio Edano, deputy secretary-general of the ruling Democratic Party of Japan.

Addressing a meeting north of Tokyo on Saturday, Edano called China "a bad neighbour" and said it was impossible for Japan to build "mutually beneficial" ties with the nation, according to Japanese media reports.

Arguing that China was not a law-abiding nation, Edano said "companies that have an economic partnership with such a country are quite a soft touch," the Asahi, Yomiuri and other dailies reported.

Edano's comment came as Tokyo seeks to mend fences with Beijing during a bitter spat over a disputed island chain, called Senkaku by Japan and Diaoyu by China.

Maehara, who has a record of tough remarks towards China, on Sunday sought dialogue with Beijing while maintaining Tokyo's stance that there was no territorial dispute over the islands as Japan has been administering them.

The row started when Japan's coastguard arrested the captain of a Chinese trawler on September 8 after he rammed two of their patrol boats near the islands, he said on a Sunday television show on the private Fuji network.

"It is important to hold diplomatic discussions on measures to prevent a recurrence. We always keep the door open," he said.

"I believe building strategic, mutually beneficial relations is possible.

"Of course we make our cases on what concerns our sovereignty, but getting along well with China benefits people's economic activity and lives. This is the same for the people of China," he said.

The ship collisions caused no injuries, but the diplomatic damage was severe, with China freezing high-level talks.

Japan released the Chinese captain on September 25.

China last week released three Japanese construction company workers detained in late September for filming in a military area but one of their colleagues was still being held in China for further questioning.

Katsuya Okada, Maehara's predecessor and currently ruling-party secretary general, also struck a softer tone Sunday.

"I've also been saying they are a country with a different system. We have to act while recognising it. China is an important country," he said.

Prime Minister Naoto Kan on Sunday left for Belgium for Asia-Europe summit talks but reports said he was unlikely to have a bilateral meeting with China's Premier Wen Jiabao.

Kan told visiting Mongolian Prime Minister Sukhbaatar Batbold late Saturday that Tokyo was ready to cooperate in developing rare earth minerals in the sprawling central Asian nation.

China has a virtual monopoly on rare earths, which are indispensable in manufacturing goods ranging from consumer electronics to hybrid cars, but industry sources said their shipments to Japan were disrupted during the spat.

The Sankei Shimbun reported Sunday that the US navy and Japanese maritime forces were likely to hold a joint drill immediately after President Barack Obama comes to Japan in November for Asia-Pacific economic forum talks.

The drill, which the conservative daily described as a mock operation to retake the islands if China occupied the chain, will be conducted partly in the East China Sea, it said, citing anonymous defence sources.

Kan is under attack from political conservatives who claim he caved in to Chinese bullying.

Nationalist groups rallied in Tokyo on Saturday against China and accused Kan's government of suffering a "diplomatic defeat" to the fast-growing neighbour.

earlier related report
Japan PM urges China to be 'responsible' international actor
Tokyo (AFP) Oct 1, 2010 - Japan's prime minister on Friday urged China to act as a "responsible member of the international community" and voiced concern about Beijing's defence spending and maritime activities.

The comments by Naoto Kan came as the Asian economic giants are embroiled in their gravest row in years, sparked by a maritime incident near a disputed island chain in the East China Sea more than three weeks ago.

Amid the heightened tensions, China issued a travel warning for its citizens after Japanese right-wing nationalists harassed a busload of Chinese tourists this week, surrounding and kicking their bus and hurling insults.

China on Friday allowed three Japanese construction workers to return home after detaining them for 11 days for filming at a restricted military site, but it retained one of their colleagues for further questioning.

At a Tokyo press conference later, the company employees apologised for causing trouble, explaining that they had indeed taken pictures but that they didn't know at the time they were in a restricted military zone.

Japan's centre-left Prime Minister Kan, meanwhile, fired off another salvo in a parliamentary speech when he voiced concerns about China's military muscle and its recent display of hardball diplomacy in the bitter spat.

"We are concerned that China... has strengthened its defence power without transparency and that it has intensified its maritime activities in regions from the Indian Ocean to the East China Sea," Kan said.

"I expect China to play an appropriate role and act as a responsible member of the international community," he said, softening the comments by saying that Japan sought good and mutually beneficial relations with China.

Foreign Minister Seiji Maehara also said later Friday: "We are always open. We will never close the window of dialogue... Confrontation is a disadvantage for both countries, and we certainly want to build win-win relations."

Japan and its top security ally the United States have in the past called for greater transparency in China's military spending, which has seen double-digit growth for much of the past two decades.

Asia's two largest economies have been embroiled in a tense diplomatic standoff since Japan's arrest on September 8 of a Chinese trawler captain near the disputed islands, called Senkaku in Japan and Diaoyu in China.

Japan has since released the captain, but the move did little to ease tensions and left Kan open to domestic attacks from political conservatives claiming he had caved in to Chinese bullying.

China has reacted strongly in its row with Japan, freezing high-level talks and visits and taking punitive economic measures, according to industry sources, such as temporarily halting rare earth exports to Japan.

Beijing's furious response has caught the attention of other nations who have their own disputes with Beijing, including countries around the South China Sea, which China claims almost in full as its "historic waters".

In one long-simmering dispute, Chinese ships have harassed Vietnamese fishing boats near the disputed Spratly and Paracel islands.

Washington has weighed in, declaring that it considers the peaceful resolution of disputes in the South China Sea in its national interest and stressing the importance of "freedom of navigation" in the area.

The Wall Street Journal said in an editorial that Beijing's behaviour "will do lasting damage to China's standing in the region, where governments will not easily bend to a form of diplomacy that smacks of an imperial tribute system."

Amid the row, anti-Chinese activists planned to march Saturday in Tokyo.

In a smaller demonstration Friday, about half a dozen protesters rallied outside the Chinese embassy in Tokyo, under strict police watch.

The protest followed an ugly incident Wednesday in the southwestern city of Fukuoka where dozens of right-wingers' vehicles surrounded a Chinese tour bus, kicked the vehicle and shouted "Chinese, go home".

China's National Tourism Administration on Friday advised "Chinese tourists and tour groups currently in Japan or planning to go to Japan in the near future to watch their travel safety".

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