"Japan witnessed severe environmental problems in the 1960s, when numerous factories were set up under the impetus of industrialization," said Masayoshi Takemura, former chief cabinet secretary, at the Second Sino-Japanese Industrial Economy Forum in Beijing.

Japan then established an environmental administration system to handle pollution problems, he said.

In the '90s, the economic bubble began to burst after prices of Japanese land and stocks plummeted, causing tremendous bad debts, he added.

"Even if Japan stopped offering overseas direct aid to China, the two neighbours could collaborate with each other in areas ranging from personnel and assets to environment and energy conservation technologies," Takemura suggested.

China and Japan can play important roles in pushing forward the economic integration process in East Asia, said Long Yongtu, secretary-general of the Boao Forum for Asia.

"East Asia is the fastest-growing region in the world," said Long, adding that "integrated industrial chains have taken shape in many sectors in the region, such as auto and electronic industries."

Japan will play a leading role in the chain with its advantages in investment and technology, Long said. And China is famous for its abundance of high-quality and low-cost labour forces.

Furthermore, the economies of the two nations are highly complementary in many respects, he noted.

For example, about 100,000 Japanese are working in China with several million Chinese employees, Long noted.

Long also urged the two governments to provide the foundation that will ensure the progress of a more stable and transparent economic integration in the region.

Co-sponsored by CEC and Japan's Hitotsubashi University, the forum, first held in 2004, aims to exchange ideas on enterprises' development.

(China Daily 09/21/2006 page2)