China has demanded Japan set up a compensation system for potential economic damage stemming from the release of treated radioactive wastewater from the crippled Fukushima nuclear plant into the sea, diplomatic sources have said.

Japan has refused the demand, noting that the International Atomic Energy Agency has concluded that the water discharge is safe, but China is unlikely to retract it, the sources, who are familiar with bilateral relations, said Tuesday.

Senior Chinese officials presented the demand to Japan several times last year through diplomatic channels, the sources said. Beijing has imposed an import ban on all seafood products from its neighbor since the start of the water release in August 2023.