WRAPUP 2-China releases 3 Japanese but isle dispute lingers
* Fourth Japanese still in custody in China
* China urges Japan stop "irresponsible statements"
* Latest spat triggered by collision in disputed seas
* Disputed seas potentially rich in gas resources (Adds Chinese Foreign Ministry, Chinese national also released)
By Chris Buckley and Chisa Fujioka
BEIJING/TOKYO, Sept 30 (Reuters) - China released three Japanese citizens on Thursday whose detention had added to tensions between Asia's two top economies, but a fourth remains in custody in a sign that the row is not yet over.
Tokyo and Beijing have been in a bitter feud since Japan detained a Chinese fishing boat skipper whose trawler collided this month with two Japan Coast Guard ships near uninhabited islands in the East China Sea that both sides claim.
Japanese prosecutors released the skipper late last week, but both sides have demanded compensation over the collision. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For more stories on Japan-China tensions [ID:nSGE68Q04R] For factbox on China-Japan ties: [ID:nTOE68J014] For factbox on frictions with China: [ID:nSGE68N028] Map of the disputed islands link.reuters.com/dyv92p Graphic on the two economies: link.reuters.com/tup64p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The release of three of the Japanese employees of construction firm Fujita Corp, held on suspicion of entering a restricted military zone, comes amid signs that Beijing and Tokyo are moving past the most vehement phase of their latest friction.
But Japanese Foreign Minister Seiji Maehara demanded the remaining Japanese being held be released quickly and for China to explain the reasons behind their detention. [ID:nTKX007015]
"What's most important is that one of them hasn't been released yet," Maehara told reporters. "We will strongly urge that he be released soon."
Chinese Foreign Ministry spokeswoman Jiang Yu told a regular briefing that China did not want the on-going diplomatic spat with Japan to deteriorate further -- but also called on Tokyo to stop making "irresponsible statements".
"We hope that Japan will proceed from the fundamental interests of both countries peoples and stop issuing irresponsible statements, and take practical actions to protect broader development of China-Japan relations," she said.
Jiang said China's statements had "both demonstrated our determination to defend national territorial sovereignty and also our sincerity in developing China-Japan relations".
The Fujita employees were detained in northern China's Hebei province last week while Beijing and Tokyo were embroiled in the row sparked by Japan's detention of the Chinese boat captain.
They were in China for a project to dispose of chemical weapons abandoned by the Japanese military at the end of World War Two. A Chinese national and fellow employee detained with them at the same time has also been released. [ID:nTOE68T03G]
Jiang said the case of the still-detained Japanese national awaited further investigation. She did not elaborate.
The tensions have underscored the fragility of a relationship long troubled by bitter Chinese attitudes towards Japan's wartime occupation as well as by present-day mistrust as China edges past Japan as the world's second-biggest economy.
The roots of the trawler dispute lie in a long-standing disagreement about sovereignty over parts of the East China Sea, which has potentially rich natural gas resources.
Fishery patrol boats from both sides have remained in waters near the disputed islands, called Diaoyu by China and Senkaku by Japan, although an expert said passions seemed to be subsiding in the bilateral feud.
"It looks like the Chinese side is letting the heat out of the argument," said Phil Deans, a professor of international affairs at Temple University's Japan Campus.
"It's not going to go away. It's very easy to reignite ... There is still a dispute (over the islands) and there are some very passionate figures on both sides that don't want a good relationship."
Japan and China have a long-running disagreement over China's exploration for natural gas in the disputed waters in the East China Sea, although in 2008 they agreed in principle to solve the argument by jointly developing the gas fields.
Japan's ambassador to China, Uichiro Niwa, has told China not to unilaterally develop a gas field in the disputed area, Kyodo news agency reported on Thursday.
China has cancelled diplomatic meetings and student visits in protest at the trawler captain's detention, although Kyodo said Japan's defence minister may seek talks with his Chinese counterpart in Vietnam next month in a bid to repair ties. [ID:nTOE68S09L]
Industry sources have cited concerns that Beijing was apparently holding back shipments to Japan of rare earth minerals vital for electronics and auto parts, but a Japanese trading firm source has said China ended its de facto ban on the exports. [ID:nTOE68S07W] (Additional reporting by Yoko Nishikawa, Linda Sieg and Kiyoshi Takenaka in Toyko and Ben Blanchard in Beijing; Editing by Alex Richardson)
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