China and Japan are showing  signs of improving their economic relationship as senior-level contact has increased recently, analysts said.

Both sides have resumed senior working-level talks between the two countries' economic authorities  China's National Development and Reform Commission and Japan's Ministry of Economy, Trade and Industry, sources said.

The first meeting was held in late June and the second is due to take place in Tokyo in September.

Senior working-level talks have not been held for two years as the political relationship deteriorated.

The talks in September will cover such things as energy co-operation, sources said.
On July 8 and 9 Japan and China are expected to open the sixth round of talks on joint gas exploration in the disputed East China Sea.

The two countries last held such a dialogue in May. This week's talks will take place in Beijing.

"I said that we need to accelerate our dialogue from the viewpoint of making the East China Sea a sea of co-operation and not one of conflict," Japanese Deputy Economic Minister Hideji Sugiyama told reporters over the weekend.

In May, Japan hosted a forum to pass on to China Tokyo's experience of boosting energy efficiency and conserving the environment.

The meeting was attended by Chinese Minister of Commerce Bo Xilai in an effort to warm up the economic and trade relationship between the two countries.

Bo suggested that China and Japan draw up a middle- or long-term plan and strengthen their co-operation on trade and the economy.

Frequent high-level visits and contact between the two countries' important economic departments will support economic and trade co-operation, said Jiang Ruiping, a professor from the China Foreign Affairs University.

Trade between China and Japan is still growing, but there has been a slowdown in growth.

Japan had the lead in terms of China-bound investment and trade in the 1980s and 1990s, but the European Union and the United States overtook it in 2004 as China's top trading partners.

Trade with Japan grew by only 9.9 per cent in 2005, much slower than China-EU and China-US trade. China-Japan trade accounted for 20 per cent of China's total overseas trade in 1994, but the figure dropped to 13 per cent last year.

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