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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Australia China India Indonesia Japan Malaysia Philippines Thailand Vietnam Japan and China agree to improve ties despite row Reuters - 52 minutes ago Send IM Story Print By Yoko Nishikawa TOKYO - Japanese and Chinese leaders said they wanted to improve strained ties, but both stressed their claims to islands at the heart of a bitter row, suggesting tensions between Asia's top two economies were far from over. The prime ministers of Japan and China met on Monday for the first time since a feud over a collision near disputed islands in the East China Sea last month soured ties, and agreed to start high-level talks to repair relations. "We both said the current situation is not desirable, and we confirmed a return to the starting point of improving our strategic mutually beneficial relations," Japanese Prime Minister Naoto Kan told reporters in Brussels after meeting Chinese Premier Wen Jiabao on the sidelines of an Asia-Europe summit. "We agreed to hold individual high-level talks on a suitable basis," Kan said, adding that he saw the disputed islands as Japanese territory. Kan, under heavy domestic fire for appearing to cave into Chinese demands in the row, did not say who would take part in the talks or when they would be held. The two leaders met for 25 minutes after a working dinner at the summit in Brussels, their first face-to-face contact since the captain of a Chinese trawler was detained after the incident near disputed islands in the East China Sea. The meeting was not announced in advance. Wen told Kan the islands -- called Senkaku in Japan and Diaoyu in China -- belonged to China but also said the two Asian giants must deepen their ties for the benefit of the people of the two countries, state media said. "The Diaoyu Islands have been Chinese territory since ancient times," Wen said during the conversation with Kan, the Xinhua news agency said in an English-language report. The row has hit supplies to Japan of rare earth minerals, vital for electronics and auto parts manufacturing and in which China accounts for about 97 percent of global total production. Japan buys around half of China's rare earth, but Beijing imposed a de facto ban on exports after the trawler incident. On Tuesday, Japan's trade minister Akihito Ohata said he would approach China about improving rare earth to Japan, citing a survey that showed more than 30 importers reported problems. Japan's Foreign Minister Seiji Maehara later told a news conference that diplomatic disputes such as the trawler incident should not affect economic ties. DISPUTED ISLANDS Sino-Japanese relations dived after Japan's Coast Guard detained the skipper whose boat collided with two Japanese patrol ships near the disputed but uninhabited islands. The islands are claimed by both countries and are near potentially huge oil and gas reserves. Four Japanese citizens employed by construction firm Fujita Corp were detained in China on suspicion of illegally entering a military zone, but three were subsequently released. Japanese Chief Cabinet Secretary Yoshito Sengoku, speaking to reporters in Tokyo, praised the talks in Brussels, but said the prospect of improved ties depended on both sides. On the question of the remaining detained Japanese national in China, he said: "I cannot predict now, but I don't think things are moving in a negative direction." Analysts said the fate of that detainee was key to moving towards better ties. "If that person is released fairly soon ... Kan may be able to go back to building good will diplomatically," said Koichi Nakano, a professor at Sophia University in Tokyo. The Brussels meeting may have sought to improve ties before Chinese President Hu Jintao's planned attendance in November at an Asia-Pacific Economic Cooperation summit to be hosted by Japan in the port of Yokohama, a Japanese source said. Analysts said, however, that it would not be easy to repair relations long plagued by China's bitter memories of Japan's wartime aggression and present rivalry over resources as well as mutual military suspicions. "If it were just a territorial row it would be a bit easier, but because of the energy and strategic implications, it's worse," said Jeffrey Kingston, director of Asian studies at Temple University in Tokyo. "And there are always historical issues to amplify the ill will generated by contemporary issues." 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