Any prolonged "dispute in political relations" between China and Japan will inevitably hurt bilateral trade and economic cooperation, said Minister of Commerce Bo Xilai.

Bo was also quoted on Friday as saying a boycott of Japanese goods will damage the interests of both China and Japan, the Xinhua News Agency reported.

The current state of Sino-Japanese relations, described as "lukewarm on the political front but hot on the economic front," cannot continue indefinitely, he said.

Signs have already emerged that the chill in political links has affected the warmth of economic ties, he added.

For 11 consecutive years up to 2003, Japan was China's top trade partner.

In 2004, the EU and the United States surpassed Japan in terms of bilateral trade volume with China. In terms of investment, the Republic of Korea (ROK) had already made more investment in China than Japan in 2004.

It is regrettable that China and Japan, two close neighbors that are highly complementary in economy, have seen a slowdown in the pace of trade and economic cooperation.

Improvement of Sino-Japanese relations requires joint efforts, Bo said.

"We demand the Japanese side live up to the commitment of squarely facing up to its aggressive history and stop doing things that hurt the feelings of the Chinese people,"

he added, noting the current chilly political relations between the countries was not what either peoples wanted, and that good economic ties are in the interests of both nations.

Bo believes that all generations of the Chinese leadership have placed high importance on developing good-neighborly, friendly and cooperative relations with Japan.

Root of abnormal ties

"The fundamental reason for the abnormal phenomenon of lukewarm political relations between China and Japan lies in the failure of the Japanese side to correctly deal with historical issues," the Minister of Commerce said.

In recent years, the Japanese leader has insisted on paying visits to the Yasukuni Shrine that honors Class-A World War II criminals. In addition, the Japanese government recently gave the green light to the release of history text books glossing over Japan's aggressive past.

"The Japanese side has caused strong dissatisfaction and indignation among the Chinese people with its comments and activities on a series of important issues, repeatedly hurting the feelings of the Chinese people," Bo added, saying this behavior was the root of the countries' current disagreement.

In contrast to the lukewarm political relations, the two countries economic relations have always been active. Bo said sharing the consensus of strengthening trade and economic cooperation, both countries cherish the hard-won state of mutually beneficial economic cooperation.

In an era of economic globalization, developing economic and trade cooperation, is in the fundamental interests of both sides.

Bo expressed the hope that all sections of Chinese society would proceed considering the long-term interests of the two peoples and jointly safeguard and actively promote the healthy development of trade and economic cooperation between the two countries.

Noting that some have advocated the boycotting of Japanese goods to express their dissatisfaction."

Bo said he hoped people would display their patriotism in a sensible way and work to push forward economic development as both Chinese and Japanese peoples have benefited from bilateral economic and trade relations.

Calculations show Japanese enterprises in China have employed 9.2 million people, and in 2004 they paid taxes of 49 billion yuan (US$5.9 billion). Japanese businesses account for 9.1 percent of the total taxes paid by the foreign enterprises in China. Japanese investors also benefited from China's economic development in return, he added.

"We don't expect the economic and trade relations between the two countries to be infringed upon," he said.

Because of the importance of Sino-Japanese economic and trade cooperation, Bo strongly urged the Japanese government to deal with the issue and create a favorable environment for bilateral economic and trade relations.

The Chinese Government, he said, has been committed to building a sound environment for foreign investors and will protect the legal rights of all foreign companies in China.

As a responsible country and an important member of the World Trade Organization, China will continue to open-up, reform and promote trade exchanges with all nations.

"Commodities from all nations will have a just treatment in the Chinese market," Bo said, adding "we hope Japanese businesses will do more to further economic and trade cooperation and promote friendship between the two countries."

(Xinhua News Agency April 23, 2005)