Japanese and Chinese defence chiefs agreed steps to ease military tensions at their first talks in the Japanese capital, Tokyo, for almost 10 years.
Cao Gangchuan (left) will spend five days in Japan
They agreed to set up a study group for a military hotline and to arrange a naval exchange, officials said.
The Japanese Defence Minister, Masahiko Komura, also raised the issue of China's rising military spending with his counterpart, Cao Gangchuan.
He urged China to fully explain the reasons for the rise, officials said.
Mr Cao is spending five days in Japan.
His visit is being seen as a sign of improving Sino-Japanese ties, which were strained under Japan's former prime minister, Junichiro Koizumi.
China had objected to Mr Koizumi's repeated visits to a controversial war-linked shrine, and high-level summits were suspended over the issue.
Prime Minister Shinzo Abe has worked to improve the relationship since he took office in September 2006.
History: Japan's neighbours think it has not done enough to atone for wartime atrocities
Trade: Bilateral trade is growing strongly
North Korea: Japan often takes a tougher stance than China over the nuclear issue
East China Sea: Beijing and Tokyo disagree over the boundary between their exclusive economic zones
Security: Japan wants to revise its pacifist constitution, which concerns China. China's military expansion concerns Japan.
"By inviting China's defence chief, we hope that we will further enhance relations between Japan and China," Mr Komura told journalists as the talks began.
Both sides agreed they wanted a military hotline established as soon as possible, a Japanese official said.
Such a line would avert crises such as the one in November 2004 when Japan said a Chinese submarine had entered its territorial waters.
The two sides also agreed on reciprocal port calls by naval vessels. A Chinese ship will visit Japan later this year, officials said.
Mr Komura urged China to clarify its defence spending and the goals of its military expansion, officials said. Mr Cao reportedly responded that the rise in spending was in line with global trends.
In recent months, both Japan and China have been expressing concern over each other's military intentions.
Japan is worried about what it calls a lack of transparency in China's defence budget. It feels the real figure for military expenditure is far higher than Beijing admits. The US has expressed similar concerns.
China, meanwhile, has expressed concern about Japan's plans for closer military co-operation with India, the United States and Australia.