Japan, China move closer

Japan's Prime Minister Koizumi greets Chinese leader Li Peng on his arrival in Japan for a weeklong visit.

(CNN) -- Economic and diplomatic relations between Japan and China look set to improve, as Chinese leader Li Peng meets with Japan's Prime Minister Junichiro Koizumi during his week-long visit to Japan.

Li's visit, scheduled to mark the 30th anniversary of the normalization of diplomatic ties between the former enemies, comes as the two countries look to ease relations strained by disputes over Taiwan, a controversial history textbook and the sinking of a ship in Chinese waters.

Koizumi and Li, who met Thursday, discussed China's economic reform efforts following its entry into the World Trade Organization.

While Japan, which is struggling through its third recession in a decade, views China as a market for its export-oriented manufacturers, there is still unease in Tokyo about China's growing economic clout in a region Japan has come to regard as its own preserve.

The Japan Times quoted Koizumi as saying he does not agree with some voices in Japan that China's rapid economic growth is a threat to the Japanese economy.

"Our economies should both grow through competition ... and increased trade under the WTO framework," the prime minister was quoted in the paper as saying.

The two leaders also tried to defuse tension over Japan's sinking of a ship in Chinese economic waters last December.

Japan said it suspected the ship was on a spying or a drug smuggling mission for North Korea and wants to raise the vessel to prove its case. To date Chinese officials have been uneasy about upsetting a traditional ally like North Korea.

However, during discussion at the Japanese Prime Minister's official residence, Li suggested that China could cooperate with Tokyo's salvage operations.

A Foreign Ministry official told The Japan Times that Li said the issue should be discussed through diplomatic channels to seek a solution acceptable to both sides.

The week-long visit by Li, the first from a high level Chinese leader since the October 2000 visit by Prime Minster Zhu Rongji, was originally scheduled for last May, but Beijing cancelled the trip in protest against Tokyo's granting of a travel visa to former Taiwanese President Lee Teng-hui.

China considers Taiwan, which split from China during civil war in 1949, a renegade province.