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By Michael Bristow
BBC News, Beijing
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The deal was done despite lingering disputes over the maritime border
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An agreement between China and Japan to jointly develop gas fields in the East China Sea has been hailed as a major breakthrough.
Over recent years, the two sides have clashed over issues ranging from Japan's attitude towards its World War II history to the safety of Chinese products.
This agreement is being seen as one more step in a gradually improving relationship between two countries that have had a troubled past.
But there are still a number of unresolved issues between the two - not least the position of the maritime border between the two nations.
Sino-Japanese relations hit rock bottom in the early years of this century, when Junichiro Koizumi was Japan's prime minister.
His annual visits to the Yasukuni Shrine, which honours convicted war criminals as well as other war dead, angered China.
Only when Mr Koizumi stepped down from office in 2006 in favour of Shinzo Abe did relations between the two begin to thaw.
Shortly after taking office, Mr Abe made a surprise visit to China, a move that signalled his intention to improve ties.
His policy has been continued by his successor, Yasuo Fukuda, who welcomed Chinese President Hu Jintao to Japan last month.
Both sides were obviously pleased with this latest agreement, which centres on a gas field which is called Chunxiao in China and Shirakaba by the Japanese.
Chinese companies will continue developing the gas field, but Japanese firms will be allowed to invest in its development.
Optimism
Chinese Foreign Ministry spokeswoman Jiang Yu said in a statement that it was a "mutually beneficial, win-win result".
In Tokyo, Japanese Foreign Minister Masahiko Komura told reporters: "It is a welcome development in Japan-China relations."
Analysts and politicians in Japan also gave their approval, as did experts in China.
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ONGOING DISPUTES
East China Sea While a gas exploration deal has been reached, a long-running dispute over maritime borders remains
Yasukuni Shrine A memorial to Japan's war dead which its neighbours see as glorifying war criminals
Disputed islands Both countries claim ownership of Senkaku/Diaoyu islands
Poisoned dumplings About 10 Japanese became ill from Chinese-made dumplings poisoned with pesticide earlier this year
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"The agreement is flexible and pragmatic and without prejudice to either side's legal position," said Chinese academic Liu Nanlai, in comments reported by Chinese state-run news agency Xinhua.
But despite the optimism, China and Japan have yet to resolve differences over their maritime border in the East China Sea.
Speaking at a news conference on Thursday, Chinese Vice-Foreign Minister Wu Dawei was keen to stress that this recent deal was an interim agreement and did not affect China's territorial claims.
He said the deal merely allowed development to take place while the bigger issue over the border was negotiated.
"The agreement does not undermine China's sovereign rights and jurisdiction over the East China Sea, and does not compromise China's legal position on the delimitation of the East China Sea," said Mr Wu.
Public disdain
According to the Japanese, an agreement on this larger issue is a long way off.
The comments from China's vice-foreign minister were perhaps meant to appease the country's general public, many of whom have criticised this energy agreement.
Japan's neighbours accuse it of glorifying its belligerent past
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Many in China think Japan has not properly apologised for its wartime aggression, and baulk at the thought of a former enemy getting its hands on Chinese resources.
Chinese nationalists staged a small demonstration against the agreement outside the Japanese embassy in Beijing on Wednesday.
And internet postings have already appeared on Chinese websites saying the government has "sold out".
But with both countries desperate to secure new sources of energy, pragmatism, it appears, has triumphed for the moment.
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