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Prime Minister Yoshiro Mori and visiting Chinese Premier Zhu Rongji agreed Friday to build a new relationship in the coming century through enhanced economic cooperation and by steadily resolving bilateral disputes, such as Chinese marine research activities within Japan’s economic waters.

In a morning meeting at the Prime Minister’s Official Residence, the two leaders agreed to deepen bilateral ties based on a joint declaration adopted in 1998 when Chinese President Jiang Zemin visited Japan, and accelerate cooperation in 33 areas agreed upon during that visit, according to a Japanese official who briefed the press.

As an indication of the progress made to date, Mori and Zhu hailed the introduction on Tuesday of a hotline between the two leaders.

Zhu also asked Mori to visit China sometime next year, and Mori gladly accepted the offer.

According to the official, Mori and Zhu held talks “in a friendly atmosphere,” with both sides trying hard to restore relations that have been strained by China’s marine research activities and naval operations in Japan’s economic waters.

During the talks, Mori raised concerns over the issue and asked for Zhu to exercise his leadership to accelerate talks on the creation of a system to give advance notification for marine operations in each other’s waters.

The two countries agreed to establish the system when Foreign Minister Yohei Kono visited Beijing in August. Details of the plan, however, including the scope of the maritime activities, have yet to be worked out.

Zhu was quoted as saying that China had no ill-intent in conducting the research, adding that the problem mainly stems from the fact that no agreed-upon maritime economic zone demarcation line has been drawn.

He agreed to work hard to conclude the notification system, the official said.

Sentiment toward China among the Japanese public is still uncertain after Jiang’s 1998 visit, when he repeatedly criticized Japan for failing to atone for its wartime aggression.

But the the Mori-Zhu talks do not appear to be focusing on this issue. While Zhu said China suffered greatly at the hands of Japan’s militarists, he was careful to point out that the Japanese people are not responsible for that, according to the official.

“We want to reflect upon history to move forward for the future and develop peace by not repeating history,” Zhu was quoted as saying.

On economic cooperation, Zhu asked for Japan to invest in the development program for China’s western interior, under which Beijing aims to narrow the economic disparity between the country’s more developed eastern coastal areas and poor western regions.

Zhu explained that the project is a grand design for China’s economic development and said he strongly hopes that Japanese companies will participate.

Mori replied that Japan will send a joint government-business mission to China in the first half of 2001 to inspect the western region, while also urging China to improve the environment for foreign investment, the Japanese official said.

He said this could be done by making sure:

* investment trust firms are more reliable in repaying debts;

* restrictions on steel imports are eased;

* and Japanese insurance firms are allowed into the Chinese market.

Regarding Japan’s official development aid to China, Mori said “some people have difficult feelings” about Japan’s aid to China, apparently a reference to voices within the Liberal Democratic Party opposed to providing large-scale aid in light of the sharp increase in China’s military spending and Japan’s tight fiscal situation.

“In order to continue providing assistance, we need the understanding and support of the Japanese people,” the official quoted Mori as saying, adding that the prime minister also urged China to further inform Chinese people about Japan’s ODA.

Japan’s ODA to China has topped 2 trillion yen over the past 20 years, but it is currently under review by a government panel.

Zhu expressed gratitude for Japan’s ODA, saying it has greatly helped China’s development. He also thanked the government for a recently approved special yen-loan package worth 17.2 billion yen.

Zhu’s comment was apparently made in an effort to win over some LDP lawmakers who say that China does not appreciate Japan’s aid.

Japan’s final decision on the 17.2 billion yen loan, for example, was put on hold for more than a month after the LDP delayed approval, citing China’s maritime activities in Japanese waters. Mori’s Cabinet officially endorsed the loan last week.

The two leaders also discussed China’s plan to build a high-speed railway linking Shanghai and Beijing; Japan is competing against Germany and France to win construction contracts for the railway.

Zhu, who is said to be interested in adopting a magnetically levitated train system while Japan pushes for the adoption of its bullet train system, plans to ride a shinkansen and maglev train during his stay in Japan.

Mori explained that Japan’s bullet train is “the fastest, largest-capacity train system available,” and that Japan is ready to provide bullet train technology to China.

“I hope that the Beijing-Shanghai high-speed railway will be a symbol of Japan-China friendship in the 21st century,” Mori was quoted as saying.

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