By Chisa Fujioka and Kiyoshi Takenaka
YOKOHAMA, Japan (Reuters) - The leaders of China and Japan sought to ease months of tensions on Saturday, while Beijing gave Japan reassurances over worries about a drying-up of rare earth exports and a dispute over gas fields.
Strains between Asia's two biggest economies have been on the boil since September when Japan detained a Chinese skipper whose fishing boat collided with its patrol vessels off disputed islands. The skipper was later released and sent home, but the diplomatic tensions have festered.
The 22-minute meeting between Prime Minister Naoto Kan and Chinese President Hu Jintao during an Asia-Pacific summit in the Japanese port city of Yokohama was a big step towards improving ties, a Japanese official said after the meeting.
"I recognise that ties between Japan and China have taken a big step towards improvement," Deputy Chief Cabinet Secretary Tetsuro Fukuyama told reporters.
He emphasised that the talks were an official meeting, in contrast to a brief informal chat Kan had with Chinese Premier Wen Jiabao last month in Hanoi -- a perceived slight that added to criticism of Kan's government at home.
The spat has taken relations between China and Japan to their worst in five years and raised worries about a spillover into economic ties.
China's official summary of the meeting and Hu's remarks did not mention the island dispute and stressed hopes for a steadier relationship.
"China and Japan have made the correct choice, one in keeping with the fundamental interests of the two countries and their people's, by pursuing a course of peace, friendship and cooperation," Hu told Kan, according to a summary of the meeting on the Chinese Foreign Ministry website (www.mfa.gov.cn).
"(They should) deepen mutually beneficial bilateral cooperation," said Hu, who invested considerable personal prestige in improving ties with Tokyo several years ago.
RARE EARTHS
Japan's Trade Minister Akihiro Ohata said China had also offered reassurances over concerns in Japan about a shortage of rare earth minerals.
China, which produces 97 percent of the world's rare earth metals, set its 2010 export quotas 40 percent lower than 2009 levels. Japan has been worried that China held back shipments of rare earths after the maritime dispute, although China has denied implementing any embargo against Japan.
Ohata said Zhang Ping, the head of China's National Development and Reform Commission, had told him he instructed officials to speed up customs inspections of rare earths.
The Chinese side also gave reassurances that it still respected a 2008 agreement on working towards joint development of gas fields in the disputed areas of the East China Sea, Ohata said.
Earlier on Saturday, thousands of Japanese took to the streets of Yokohama, a port city near Tokyo known for Japan's biggest Chinatown, to protest what they see as an imperialistic China.
The Japanese government's handling of the dispute with China, along with and another territorial feud with Russia, has been criticised at home and been a factor in the recent sharp fall in its support ratings.
(Additional reporting by Chris Buckley, Shinji Kitamura, Yoko Kubota; Writing by John Chalmers and Chisa Fujioka; Editing by Ed Davies and Edmund Klamann)
