BEIJING - China and Japan should strive to manage sensitive matters in bilateral ties and prevent frictions from escalating, Foreign Minister Yang Jiechi said.

The senior Chinese diplomat also stressed that China-Japan relations are one of the most important for both countries.

"Maintaining sound ties is a wise choice for both. We hope the two sides can keep the relations going in the right direction," Yang said.

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Yang's comments come after relations between the two Asian giants nearly took a nosedive when two Japanese Coast Guard patrol ships collided with a Chinese trawler on Sept 7, 2010, in waters off the Diaoyu Islands in the East China Sea.

Japan detained the trawler's captain despite China's protests. In response, China halted bilateral exchanges at and above provincial and ministerial levels.

China and Japan have encountered some twists and turns in reaching a common ground on the East China Sea issue. The two sides should properly handle this sensitive issue based on strategic mutual benefits, Yang said.

"We have every reason to believe that the East China Sea should be a sea of peace, cooperation and friendship. China's stance on the issue has not changed," he said.

On the Diaoyu Islands, Yang said it is a "sensitive issue which should be handled carefully".

"We have told the Japanese side time and again that last year's incident should not be repeated," he noted.

Yang said that he is ready to improve Sino-Japanese ties with the next Japanese foreign minister, whoever he is, and will enhance mutual trust and beneficial cooperation with neighboring countries.

Japanese foreign minister Seiji Maehara resigned on Sunday to take responsibility for accepting donations from a foreign national.

Despite the frictions, Sino-Japanese ties still managed to take a step forward this year, Yang said.

Premier Wen Jiabao will attend the China-Japan-ROK leaders meeting this May, and Vice-Premier Wang Qishan will attend the Sino-Japanese high-level economic dialogue.

"We hope the meetings can end with positive results to help enhance dialogue and mutual trust and deepen practical cooperation," said Yang.

However, 2010 was a lose-lose year for both Japan and China, said Zhang Tuosheng, chief of foreign policy research at the China Foundation for International Strategic Studies.

"Bilateral ties improved a lot after the thawing trip of former Japanese prime minister Shinzo Abe at the end of 2006, but a single collision almost obliterated years' of efforts," Zhang said.

This year, the two countries should set up a crisis management mechanism to avoid such serious damage, as well as resume dialogue.

"And I hope the people-to-people exchanges could be improved to create a more solid friendship," Zhang said.

As to neighboring countries, China should maintain its diplomatic policy of making peace and making friends, to push the resumption of Six-Party Talks and to improve relations with Japan, Zhang said.