In a bilateral meeting in Beijing, Yang said he saw Taiwan's plans for a referendum next March on whether to seek to join the United Nations as a threat, the official said. Yang urged that Japan not provide a forum for independence activists, nor send any "wrong messages".

Komura said Japan could not support any one-sided attempt to change the current balance of power between Taiwan and China, the official said.

Japan occasionally plays host to politicians from Taiwan, seen by China as a renegade province. Presidential hopeful Ma Ying-jeou paid a goodwill visit in November, while rival Frank Hsieh plans a similar trip this month, Kyodo news agency said.

The two nations also started talks on trade and economic issues Saturday that are intended to bolster the recent warming of their long-uneasy relations.

The weekend of meetings brings together the largest number of Cabinet officials from the two countries since they opened diplomatic ties 35 years ago and is modeled after similar dialogues China holds with the United States and the European Union.

"We are intensifying the dialogues at a very high political level," Japanese Foreign Ministry spokesman Mitsuo Sakaba told reporters.

Only two modest agreements were struck -- one on a 46.3 billion yen (US$420 million; euro285 million) Japanese loan to China to fund six environmental projects, and the other a treaty to allow the countries' police and prosecutors to work directly on criminal extradition.

No breakthroughs were reached in a morning meeting of the foreign ministers on Japan's chief issue, China's exploitation of a gas field that straddles a contested part of the East China Sea, Sakaba said.

But the talks themselves are a mark of the Asian neighbors' new willingness to move beyond the divisive disputes over the gas field and other territory, and the tense rivalry for regional influence that chilled relations over the past decade. In recent weeks, the countries' prime ministers met amiably at a regional summit in Singapore and Chinese naval ships paid the Communist country's first-ever port call in Japan."China's development is not a threat to Japan, but an opportunity. Japan's development has also benefited China's ceaseless economic progress," Chinese Vice Premier Zeng Peiyan said in opening the afternoon meeting of more than a dozen Cabinet ministers.

On the agenda were macro-economic policies, disputes over the value of the Chinese yuan, cooperation on energy and the environment, investment policies and world trade talks, officials from both sides said.

At their morning meeting, the foreign ministers agreed to more exchanges among the countries' militaries and defense officials, Sakaba said. They also tried to settle dates for an upcoming visit to China by Japanese Prime Minister Yasuo Fukuda and a reciprocal trip to Japan by Chinese President Hu Jintao, perhaps during the cherry blossom season in April, he said.

Despite the apparent efforts to stress the positive, significant friction persists. Rancor over Japan's often brutal World War II era occupation of much of China lingers, though it has subsided from the flare-up that froze political relations in recent years. Mutual suspicions continue as a fast emerging China asserts its growing clout while Japan, the world's No. 2 economy, struggles to maintain influence.

Amid the jockeying, differences over the Chunxiao gas field have come to symbolize China's muscle-flexing and worries about competition for energy by the two resource-hungry economies. Tokyo and Beijing have held 11 rounds of talks on the issue, agreeing to jointly develop the field, but little else.

"There are several proposals on the table, but I could not say that we have made progress," Sakaba said. Tokyo wants the issue resolved before Prime Minister Fukuda visits, perhaps by the end of the year, Sakaba said, but he added that a resolution was not a precondition for the visit.

Economic ties, which softened tense political relations in recent years, 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 US$4.6 billion (euro3.1 billion), according to Japan's Foreign Ministry.

In a sign of their shifting economic relations, the loan agreed to Saturday is the last Japan will provide under a 28 year-old development assistance program that provided China with 3.27 trillion yen (US$30 billion; euro20 billion) in loans at low interest rates, Sakaba said.