YOKOHAMA — Prime Minister Naoto Kan said Sunday that Japan's future prosperity hinges on whether it can build closer ties with China and other Asia-Pacific countries, although there may be some difficult issues.

"Japan no longer has overwhelming economic power in Asia . . . so it needs to be firmly connected also economically with other countries in the Asia-Pacific region and find ways to grow and develop with them," Kan told a news conference in Yokohama after hosting the two-day summit of the Asia-Pacific Economic Cooperation forum through Sunday.

Some of the difficult problems that Kan mentioned include a recent diplomatic spat with China in connection with rival claims to a chain of islets in the East China Sea.