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China says it hopes Japan rift can be resolved peacefully

BEIJING - China hopes a dispute with Japan over East China Sea islands claimed by both countries could be resolved peacefully, the defense minister said on Tuesday, but added Beijing reserved the right to take "further action."
"...That being said, we still hope for a peaceful and negotiated solution to this issue and we hope to work together and work well with the Japanese government properly handling this dispute," Defense Minister Liang Guanglie told reporters after meeting his US counterpart, Leon Panetta.
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