Therefore, Japanese Prime Minister Junichiro Koizumi will meet Chinese President Hu Jintao today in Jakarta, after three weekends of anti-Japan rallies in China sent relations between Asia's two biggest economies to their lowest in decades.

Both leaders are attending an Asian-African conference in the Indonesian capital Jakarta.

The talks will come a day after Koizumi apologized for the pain Japan inflicted on neighboring nations before and during World War II, in a bid to ease strained relations.

China, which has criticized Japan for glossing over atrocities in its textbooks, welcomed the apology.

Japan and China have a lot riding on the outcome of the talks. China and Hong Kong together surpassed the U.S. to become Japan's biggest trade partner in the year to March 31. Japan's trade with its Asian neighbor totaled about $213 billion, expanding to 20 percent of Japanese trade from 15 percent at year earlier.

Investment

China was the second-largest recipient of Japanese foreign direct investment, after the Netherlands, in the first half of 2004, according to Japan's Ministry of Finance figures. Investment rose 89 percent to $2.7 billion.

At the same time, the world's second and third largest energy consumers are competing for new sources of gas and oil.

China's demand for energy has soared as its economy expands. The country's gross domestic product has tripled in a decade to $1.6 trillion, or about a third the size of Japan's economy. Japan relies almost entirely on imports for its oil and gas needs.

A major row has erupted over rights to possible gas reserves in the East China Sea. Japan has accused China of siphoning of gas from its territory and has demanded that it halt work at the offshore Chunxiao field. China has refused.

Japan's government on April 13 said it will also allow drilling in the area, which lies in the sea between the Chinese city of Shanghai and the southern Japanese island of Okinawa.

China's largest offshore oil producer CNOOC Ltd. which is prospecting in the East China Sea, expects produce as much as 1 billion cubic meters of natural gas a year from the disputed field, Fu Chengyu the company's chairman said on March 29.

Japan's Teikoku Oil Co., the largest producer of natural gas from fields in Japan, and Japan Petroleum Exploration Co., the nation's No.2 oil driller, applied for permission to develop the gas fields three decades ago.

The Sino-Japanese dispute also involves political differences. China was angry last month when Japan joined the U.S. in declaring Taiwan a ``security concern'' under their joint defense pact. China claims sovereignty over Taiwan.

China is also opposed to Japan's securing a permanent seat on the United Nations Security Council.

Another irritant to China are visits by Koizumi and other Japanese politicians to Tokyo's Yasukuni shrine, where convicted war criminals lie among the nation's honored heroes. About 80 parliamentarians visited the site yesterday, provoking a protest from China.