China and Japan wrapped up their first high-level commerce and economic talks yesterday by pledging to cement even stronger ties in wide-ranging areas, including a free-trade zone.

They also agreed to participate in an anti-global-warming framework to replace the Kyoto Protocol, and cooperate on measures to combat money-laundering, terrorism financing and smuggling.

Premier Wen Jiabao hailed the two-day meeting as a success and called for the countries to embrace and reinforce economic and trade relations.

China and Japan are important trade partners and economic and trade cooperation is the basis on which to construct bilateral strategic and reciprocal relations, Wen said in his meeting with visiting Japanese Foreign Minister Masahiko Komura. "The two sides should make joint efforts to promote peaceful coexistence, cooperation with mutual benefit, common development and long-lasting friendship," Wen said.

The two countries issued a joint statement promising to strengthen efforts to form a regional free-trade zone, promote energy efficiency and improve protection of intellectual property rights.

Wen told Komura: "It's clear China and Japanese relations have taken another step forward, especially in the areas of trade."

The two-day talks brought together the largest number of Cabinet officials from the two countries since they opened diplomatic ties 35 years ago.

Two agreements were struck. One is a 46.3-billion-yen (US$417-million) Japanese loan to China to fund seven environmental projects, and the other a treaty to allow the countries' police and prosecutors to work directly on criminal extraditions.

At Saturday's meeting between foreign ministers, the two sides agreed to more exchanges between military and defense officials.

They also tried to settle dates for an upcoming visit to China by Japanese Prime Minister Yasuo Fukuda and a reciprocal trip to Japan by President Hu Jintao, perhaps during the cherry-blossom season in April.

On Saturday, Vice Premier Zeng Peiyan said China is willing to create sound conditions for Japanese firms to invest in China. Zeng said four major problems exist in Sino-Japanese economic ties: a slowdown in the growth rate of bilateral trade, unsatisfactory business environment, obstacles in technological cooperation and fluctuations of Japanese investment in China.

Zhou Shengxian, director of the State Environmental Protection Administration, said China would like to learn water-pollution prevention methods from Japan. The two countries could launch a program to address water pollution along the Yangtze River, he said.

And China may allow some foreign governments to issue yuan-denominated bonds on the domestic capital market, Finance Minister Xie Xuren told the meeting. "We are actively doing research on bond issuance of foreign governments in China," Xie said.