Japanese Prime Minister Junichiro Koizumi said in Tokyo Friday that China now ranks equal with the United States in its importance as a trade partner with Japan.

Stable relations between Japan and China are of great importance to the whole international community, Koizumi told a parliamentary session.

The two countries should dedicate themselves towards building bilateral ties and strengthening comprehensive cooperation despite differences in some areas, he said.

"Even if we (Japan and China) have different opinions, I will enhance cooperation in wide-ranging fields from a broader viewpoint," Koizumi said.

As for foreign policy, the prime minister said Japanese-US relations are the basic axis of Japan's foreign policy. The alliance between the two countries is the basis to maintain security in Japan as well as in the whole world.

Japan will continue to carry out cooperation with the United States in both political and economic fields and further strengthen bilateral ties, he stressed.

In addition, Japan will make joint efforts with the United States, South Korea, China and Russia to completely solve the nuclear issue in the Korean Peninsula in order to realize the normalization of diplomatic relations between Japan and the Democratic People's Republic of Korea (DPRK).

As for the territorial dispute with Russia, Koizumi said Japan's policy of seeking clarification that four Russian-held islands belong to Japan has not changed but added he will try to deepen trust with Russia in the light of the visit of President Vladimir Putin to Japan this year.

On domestic reforms, Koizumi said postal privatization is a "most drastic and effective" reform for revitalizing Japan's economy and producing efficient government.

The Japanese government will try to pass during the 150-day session a set of bills to privatize Japan Post in April 2007 based on the basic policy adopted last September despite a lack of support from the ruling parties.

Koizumi also said that privatization will help release 350 trillion yen (US$3.4 trillion) in postal funds from the public to the private sector and help the state rebuild its finances by selling stakes and collecting taxes from the privatized firms.

(Xinhua News Agency January 22, 2005)