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Mr. Osamu Watanabe, Chairman of the Japan External Trade Organization (JETRO) recently told China Youth Daily in Beijing that talks on the free trade zone between Japan and China were not likely to be launched until 2008 when China fully honors its WTO commitment.

"It is not yet ripe for such talks," said Mr. Watanabe, but he hopes an investment agreement would be settled before that.

He considered the issue of China's intellectual property rights protection as one of the major tumbling stones on the establishment of a free trade zone. He also recognized the political chill in the bilateral relations and deteriorating sentiment between the two parties.

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