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Chinese President Xi Jinping and Japanese PM Shinzo Abe have met for formal talks after more than two years of severe tension over a territorial dispute.

Xi Jinping and Shinzo Abe met on the sidelines of the Asia-Pacific Economic Co-operation (APEC) summit in Beijing.

Their first meeting included a public handshake with little sign of warmth.

In a speech to APEC, President Barack Obama has meanwhile announced big changes to visa arrangements with China.

Multiple entry short-term visas for businessmen and tourists will be extended to 10 years – up from one year.

Those for students rise from one year to five.

Barack Obama also stressed the importance of ties between China and the US, saying “the US welcomes the rise of a prosperous, peaceful and stable China.”

Japanese PM Shinzo Abe and Chinese President Xi Jinping have met for formal talks after more than two years of severe tension over a territorial dispute

Japanese PM Shinzo Abe and Chinese President Xi Jinping have met for formal talks after more than two years of severe tension over a territorial dispute

His comments come amid underlying tension between the US and China over Beijing’s growing regional influence.

Relations between China and Japan have long been soured by a row over islands in the East China Sea.

The uninhabited but strategically important islands, known as Diaoyu by China and Senkaku by Japan, are controlled by Japan but also claimed by China.

Tokyo’s decision to purchase three of them from their private Japanese owner in September 2012 led to an escalation in a dispute that has rumbled quietly for years.

The Chinese and Japanese leaders interacted awkwardly as they posed for an unsmiling photo after their talks.

Shinzo Abe said the meeting – which came three days after the two sides agreed to work to prevent the territorial dispute from escalating – was “the first step for improving ties by returning to mutually beneficial relations based on common strategic interests”.

He also said they had agreed to start preparations to establish a maritime crisis mechanism.

There have been fears that a clash – accidental or otherwise – between Chinese and Japanese paramilitary vessels patrolling waters around the disputed islands could trigger a conflict.

Xi Jinping told Shinzo Abe that China hoped Japan would follow a path of peaceful development and adopt prudent military and security policies.

Relations have also been hampered by what China sees as Japan’s failure to adequately acknowledge its war-time conduct.

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Two Russian fighter jets have breached Japanese airspace, prompting Tokyo to scramble its own aircraft, reports say.

Japan lodged a protest after the planes were detected off the northern island of Hokkaido for just over a minute.

The incident happened after Japanese PM Shinzo Abe said he was seeking a solution to a territorial dispute with Russia over a Pacific island chain.

Russia’s military denied the incursion, saying the jets were making routine flights near the disputed islands.

Shinzo Abe was speaking on the anniversary of an 1855 treaty which Japan says supports its claims to the islands.

The four islands – which Russia calls the Southern Kurils and Japan calls the Northern Territories – are the subject of a 60-year-old dispute.

Because of the dispute, the two nations have not yet signed a peace treaty to end World War II.

Two Russian fighter jets have breached Japanese airspace, prompting Tokyo to scramble its own aircraft

Two Russian fighter jets have breached Japanese airspace, prompting Tokyo to scramble its own aircraft

“Today, around 03:00, military fighters belonging to Russian Federation breached our nation’s airspace above territorial waters off Rishiri island in Hokkaido,” the foreign ministry said, quoted by AFP news agency.

Hours earlier, Shinzo Abe told former inhabitants of the disputed islands and their descendents: “In the telephone talks, I told [Russian] President [Vladimir] Putin I would make efforts to find a mutually acceptable solution so as to ultimately solve the issue of the Northern Territories.”

In December, Shinzo Abe and Vladimir Putin agreed to restart talks on signing a peace treaty.

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Natsuo Yamaguchi, an envoy for Japan’s Prime Minister Shinzo Abe, has met China’s leader Xi Jinping in Beijing, amid a growing territorial dispute.

Natsuo Yamaguchi, head of the junior party in Japan’s ruling coalition, handed Xi Jinping a letter from Shinzo Abe – its contents have not been disclosed.

The envoy said the two had agreed it was important to maintain a dialogue.

Xi Jinping urged Japan to “work hard with China” to resolve the issue, a Chinese foreign ministry statement said.

As head of the New Komeito party, Natsuo Yamaguchi is the most senior politician to visit China since ties worsened last year.

Both countries claim sovereignty over a chain of islands in the East China Sea, called Senkaku in Japanese and Diaoyu in Chinese.

The islands, which are controlled by Japan, lie south of Okinawa and north of Taiwan.

After his meeting, Natsuo Yamaguchi told reporters that Japan “wishes to pursue ties with China while looking at the big picture”.

“It is important that both sides make efforts through political dialogue so that a summit meeting between Japanese and Chinese leaders can take place – this is the suggestion that I made,” he said.

“In response, Xi Jinping said there was a need for high-level dialogue and that he would consider it seriously.”

Natsuo Yamaguchi, an envoy for Japan's Prime Minister Shinzo Abe, has met China's leader Xi Jinping in Beijing, amid a growing territorial dispute

Natsuo Yamaguchi, an envoy for Japan’s Prime Minister Shinzo Abe, has met China’s leader Xi Jinping in Beijing, amid a growing territorial dispute

Xi Jinping, meanwhile, speaking before the talks, said the visit came “at a period in which Sino-Japanese relations face a special situation” and that China attached “great importance” to it.

“The Japanese side ought to face up to history and facts, take practical steps and work hard with China to find an effective way to appropriately resolve and manage the issue via dialogue and consultations,” a foreign ministry statement later quoted him as saying.

The dispute over ownership of the islands has been rumbling for years, but it reignited in 2012 when the Japanese government purchased three of the islands from their private Japanese owner.

The move triggered diplomatic protests from Beijing and Taipei, and sparked small public protests in China, affecting some Japanese businesses operating in the country.

Chinese government ships have since sailed many times through what Japan says are its territorial waters around the islands. Late last year, a Chinese government plane also flew over the islands in what Japan called a violation of its airspace.

In response, Tokyo has moved to increase military spending for the first time in a decade and Shinzo Abe recently embarked on a diplomatic offensive in South East Asia, where several nations are also embroiled in maritime disputes with China.

The tensions between the two Asian giants have raised concern, with the US calling for calm and restraint.

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Zhou Xiaochuan, the governor of China’s central bank, has pulled out of the International Monetary Fund and World Bank meetings being held in Japan.

The move comes amid an ongoing territorial dispute between the two countries.

Relations between the two soured after Japan said it had purchased disputed islands in the East China Sea claimed by both Tokyo and Beijing.

China’s four state-owned banks have also skipped the meetings.

Zhou Xiaochuan, the governor of the People’s Bank of China, was scheduled to attend the meetings and deliver a speech at the event.

“We were informed two days ago that Governor Zhou’s schedule might require him to cancel his lecture in Tokyo,” an IMF spokesperson said.

“It has now been confirmed that his deputy Yi Gang will represent him at the IMF-World Bank annual meetings and will deliver his Per Jacobsson Lecture.”

Chinese Finance Minister Xie Xuren is also apparently skipping the meetings. Chinese state media said Vice-Minister Zhu Guangyao would attend.

A report on China’s official news agency Xinhua confirmed the make-up of the Chinese central bank delegation.

It also cited unidentified analysts as saying that the four state-owned banks had decided to skip the meetings “because bilateral relations between China and Japan have become strained”.

Japan described the Chinese move as “regrettable”.

The territorial dispute has affected both political and trade ties between the two neighbors.

On Tuesday, Japanese carmakers reported a dramatic drop in sales in China, after recent protests in the country targeting Japanese products and businesses.

Toyota reported a 49% drop in sales in September, while Honda and Nissan’s sales fell 40% and 35% respectively.

Other carmakers such as Mitsubishi Motors and Mazda have also reported a sharp drop in Chinese sales.

The protests had led to various Japanese firms temporarily suspending their operations in China.

Dion Corbett, spokesperson for Toyota, Japan’s biggest carmaker, said the slump in sales meant that its sales targets for China might be “very difficult to achieve”.

The territorial row has rumbled for decades. Both China and Japan claim the islands, called Senkaku in Japan and Diaoyu in China.

Taiwan also claims the islands, which lie in important shipping lanes and fishing grounds, and also close to waters thought to contain natural resources.

This row flared over Japan’s purchase of some of the islands from their private owner – a move prompted by a potentially more provocative plan by right-wing Tokyo Governor Shintaro Ishihara to buy them using public donations and develop them.

Since then both Chinese and Taiwanese vessels have been sailing in and out of what Japan says are its territorial waters around the islands. The US, meanwhile, has called for calm, with US Secretary of State Hillary Clinton urging “cooler heads to prevail”.