China says differences remain in Japan gas talks

BEIJING, July 9 (Reuters) China and Japan, whose relationship has deteriorated over disputes dating back to before World War Two, ended two days of talks on natural gas exploration today without agreement.

''Great differences still remain,'' the Chinese Foreign Ministry said in a statement.

It was the sixth round of talks to try to resolve differences over a disputed natural gas field in the East China Sea.

In May, Japan said it was considering joint use of the gas field with China after Japanese Foreign Minister Taro Aso and his Chinese counterpart, Li Zhaoxing, discussed the issue in a rare meeting on the sidelines of an Asian summit in Doha, Qatar.

Japan's Kyodo news service said today the two sides had agreed to set up a new panel of technical experts.

It quoted Kenichiro Sasae, head of the Japanese Foreign Ministry's Asian and Oceanian Affairs Bureau, as saying that Japan and China would start to consider establishing a mechanism to keep accidents in the area from developing into conflict.

Ties between the two countries have deteriorated since Japanese Prime Minister Junichiro Koizumi took office five years ago and began annual visits to the Yasukuni Shrine for war dead, seen by China and South Korea as a symbol of past Japanese militarism.

Chinese harbour deep bitterness over Japan's invasion and occupation of large parts of the country between 1931 and 1945, and accuse modern-day Japanese leaders of failing to acknowledge atrocities committed by the Imperial Army.

The dispute over the gas field has also soured relations.

The two countries disagree over the position of the border between their exclusive economic zones in the East China Sea, and Japan has expressed concern that energy-hungry China's development of the area could tap into its own zone.

REUTERS SHB VA RN1308