Business ties can bring real benefit when relations hit a rocky patch

The Itoya restaurant is famed for the hospitality of its waitresses: young women in orange uniforms who pour drinks and chat with Japanese businessmen - a service not offered to other customers.

The restaurant is one of thousands of businesses catering to the Japanese community in Shanghai, a sign of how strong economic bonds have grown since China and Japan established diplomatic relations in 1972.

Japanese officials say shared economic benefits helped relations recover from their lowest point in 33 years when in April protesters destroyed businesses and damaged diplomatic missions on the mainland over Tokyo's failure to admit wartime atrocities. The mainland initially permitted the protests.

'[The Chinese] know our relationship is very important in terms of our economic future. We and they do not want to see further deterioration in the relationship, so that is sort of a safety valve,' a Japanese diplomat said.

There are nearly 75,000 Japanese nationals living long-term on the mainland - 34,000 in Shanghai alone - and more than 5,000 Japanese-invested firms across the country, according to Tokyo's figures.

Mainland data indicates that by the end of last year, Japan had invested US$47 billion in China and committed a further US$67 billion. Bilateral trade stood at US$168 billion last year.