Japan's trade minister is due to meet Chinese Premier Wen Jiabao on Wednesday for the highest level talks since relations nosedived last year.

On Wednesday morning Toshihiro Nikai met his Chinese counterpart, Bo Xilai.

But all eyes are on his talks later in the day with Premier Wen, for signs of improving bilateral relations.

The two nations disagree over a variety of issues, but a key point remains China's anger at Japanese politicians who visit a controversial war shrine.

Japan's trade with China is at record levels, bigger even than with the US, so there is plenty for the trade minister to discuss while he is in Beijing.

Mr Nikai is also continuing talks begun last year on a more sensitive issue, the disputed gas fields in the East China Sea which both countries want to exploit.

There are at least some signs of progress on this issue, according to the BBC correspondent in Tokyo, Jonathan Head, with a number of joint projects being discussed.

Whereas on the more emotional question of their shared history, China and Japan are as far apart as ever, our correspondent says.

Premier Wen Jiabao's agreement to meet Mr Nikai on Wednesday afternoon will be watched closely for any signs of conciliation from China.

Shrine dispute

Senior Chinese officials have spurned all formal meetings with their Japanese counterparts for several months, angered by Prime Minister Junichiro Koizumi's continued visits to the controversial Yasukuni war shrine in Tokyo.

Ahead of Mr Nikai's visit, Chinese foreign ministry spokesman Liu Jianchao stressed that Beijing was still furious about Mr Koizumi's insistence on visiting the shrine, which honours Japan's war dead, including several convicted war criminals.

"On this issue, Japan should not have any illusions, make any excuses or find any pretext to cover up their acts or even push the responsibility to the Chinese side," he said.

But Mr Koizumi has made it clear that he will not be deterred from such visits, which he says he makes in a personal capacity.

According to our correspondent, the Japanese leader has made them a symbol of his determination that his country should no longer be burdened by its wartime past.

But there is growing pressure from Japan's neighbours and allies to see the rift healed.

As Mr Koizumi is expected to step down in September, any prospect of better relations between the region's two most powerful nations probably lies with his successor.

But the front-runner to succeed him, Shinzo Abe, has also repeatedly visited the Yasukuni shrine.

BBC News

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I doubt they will ever stop the visits but they could at least take the war criminals names off.