Wen said China-Japan relations have entered "an important period of improvement and development", adding that he would like to work with Fukuda to jointly seize opportunities so as to "promote a new and greater development of strategic and mutually beneficial China-Japan relations".

Wen said he and Fukuda had a "friendly telephone call" only four days after Fukuda assumed his premiership. They also met over lunch during an Asian summit in Singapore last month. "As it shows, we have established a sound work relationship," the premier said.

The talks took place in the Great Hall of the People after a red-carpet welcoming ceremony.

Fukuda described their talks as "a heart-to-heart dialogue" and said he was determined to treat bilateral relations earnestly "in the new year to come".

He said that China-Japan relations offered "huge opportunities and responsibilities". Fukuda added that he hoped the two countries could cooperate for the future of Asia and the world.

Wen and Fukuda exchanged views on resources development in the East China Sea and the Taiwan issue.

Wen proposed that the two countries should maintain momentum through mutual visits and meetings at various multi-lateral occasions by the two state leaders and conduct high-level coordination on issues of common concern to achieve enhanced political mutual trust.

He also suggested the two nations should cooperate in such key areas as energy, environment, finance, high technology, telecommunications and intellectual property protection to boost the quality and efficiency of China-Japan economic and trade cooperation.

The two countries should further conduct personnel exchanges to strengthen China-Japan friendship, Wen said.

Next year, the two countries will mark the 30th anniversary of the signing of the China-Japan Treaty of Peace and Friendship. Meanwhile, youth exchange programs will be further promoted as the two countries observe the China-Japan Friendly Exchange Year of the Youth in 2008.

China will host the Olympic Games next year. Fukuda said Japan would "vigorously support" China and "sincerely look forward to" the success of the Games. Wen also expressed warm welcome for Japan to take part in the Games.

"To maintain and strengthen the China-Japan friendly ties is the only correct choice of the two countries. It is in line with the fundamental interests of their two peoples and is conducive to the peace and development of northeastern Asia, and the continent as a whole," Wen said.

The premier said the two nations would strengthen defense exchanges and security dialogues, and schedule "in good time" a China visit by Japan's defense minister and the maritime self-defense force.

He said that China and Japan should "properly and cautiously" handle historical and Taiwan issues to safeguard the political basis of the bilateral relations.

Fukuda said Japan would "very earnestly" reflect on the agonizing part of history and continue to follow the path of peaceful development so as to establish "forward-looking China-Japan relations". The two nations have a long-time disagreement on wartime history.

During their talks, Wen and Fukuda also touched upon the assassination of Pakistani opposition leader Benazir Bhutto on Thursday. Both expressed strong opposition against terrorist activities.

Wen also invited Fukuda to play baseball. During Wen's "ice-thawing" trip to Japan in April, the premier played baseball with Japanese college students.

After the talks, the two witnessed the signing of three cooperation documents in fields of youth exchanges, technical cooperation on climate change, and new joint research on magnetic fusion energy.

Fukuda's visit, three months after he took office, is the first to China by a Japanese prime minister since Abe visited Beijing last October.

It is the third overseas trip of Fukuda's premiership after his visits to the United States and Singapore.

Later in the afternoon, Chinese President Hu Jintao and top legislator Wu Bangguo were to meet with Fukuda after he spoke at the elite Peking University.

Fukuda will also visit an economic development zone in Tianjin on Saturday and the hometown of Confucius in Qufu, Shandong Province, on Sunday before flying back to Japan.

(Xinhua News Agency December 28, 2007)