http://news.ft.com/cms/s/862776c4-ad6a-11da-9643-0000779e2340.html

Japan and China need to establish a ¡°strategic partnership based on equality¡±, according to the policy chief of Japan¡¯s ruling Liberal Democratic party, acknowledging that Tokyo could no longer afford to treat China as an upstart power.

Hidenao Nakagawa, who is expected to be an important figure in any future cabinet led by Shinzo Abe, the frontrunner to replace Junichiro Koizumi as prime minister in September, told the Financial Times: ¡°There is no precedent in Asia for two big countries to have a strategic partnership based on equality. We want to establish such a strategic partnership with China. That¡¯s what we¡¯re aiming for.¡±

The comment by Mr Nakagawa, one of two senior Japanese politicians to visit Beijing last month, could be interpreted as an important acknowledgement of realpolitik. China, including Hong Kong, has surpassed the US as Japan¡¯s biggest trading partner and become a significant manufacturing base for many Japanese companies.

The political relationship between the two countries, however, has deteriorated under Mr Koizumi¡¯s premiership, largely over the issue of his annual pilgrimage to Yasukuni shrine, considered by the Chinese to be a symbol of Japanese nationalism.

Jeff Kingston, professor of Asian studies at Temple University, said of Mr Nakagawa¡¯s remarks: ¡°I think this is very encouraging. If Abe¡¯s actually on board with this, it could make a world of difference.¡±

He said both countries might be looking for a face-saving way to build a more pragmatic relationship after Mr Koizumi stepped down. ¡°These remarks are an early signal that there is a possibility of a better relationship, going forward as equals,¡± he said.

Mr Nakagawa was, however, uncompromising about the issue of Yasukuni, where the souls of Japan¡¯s war dead, including 14 A-Class war criminals, are said to reside.

The question of whether Mr Abe intends to visit the Tokyo shrine should not be a topic for the LDP¡¯s September leadership election to decide Mr Koizumi¡¯s successor, he said.

¡°I don¡¯t think the election should be decided on the basis of who is friendly and who is unfriendly to China,¡± he added, saying questions about how to improve Ja-pan¡¯s economy should come first.

Beijing has recently accepted visits from senior Japanese politicians, including Mr Nakagawa and Toshihiro Nikai, the trade minister, who is regarded as Japan¡¯s most pro-China cabinet minister. Mr Nakagawa rebuffed any suggestion China could influence the LDP election, saying: ¡°They might be interested [in doing so], but the next prime minister is decided by us, not [by] China.¡±

Yesterday, in what some see as a sign of good faith, Japan and China began to discuss in Beijing a dispute over gas reserves claimed by both nations.

The two sides have proposed joint development of gas fields in the East China sea, but cannot agree on the related issue of how to demarcate their maritime exclusive economic zones.

Japanese officials say privately a breakthrough is unlikely until Mr Koizumi steps down.