Beijing's increasingly firm stance on territorial rows with a number of nations over potentially resource-rich islands in the East and South China Seas has triggered nervousness in the region.

"China remains committed to... the regional policy of building good-neighbourliness and friendship," Hu told leaders at the Asia Pacific Economic Cooperation (APEC) summit in Japan's port city of Yokohama.

Hu also warned about rising protectionism in the region at the meeting of 21 Pacific Rim leaders, which was held over the weekend under a cloud of tensions between its biggest economies.

A bitter diplomatic dispute erupted between China and Japan two months ago after Tokyo arrested a Chinese trawler captain in disputed waters of the East China Sea.

The move sparked a series of protests and snubs from Beijing and accusations of retaliatory economic measures, plunging ties between the two nations to their lowest in years.

But in a move that substantially eased tensions, Hu met with Japanese Prime Minister Naoto Kan on Saturday on the sidelines of the summit.

In their first talks since the incident, the leaders pledged to improve relations and Hu said he believed the two countries should "follow a road of peace, friendship and cooperation".

Still, the row between Asia's two biggest economies has sent jitters through the region, smoothing the path for the United States, which is attempting to re-engage with Asia where it is seen by many as a vital counterbalance.

Beijing's assertiveness also extends to the South China Sea, where it insists it has total sovereignty over the Spratly and Paracel islands despite competing claims by the Philippines, Vietnam, Malaysia, Brunei and Taiwan.

US Secretary of State Hillary Clinton visited China in October to urge Beijing to defuse maritime tensions with its neighbours and said at a summit in Vietnam that such rows should be settled by international law.

Her intervention was met with an indignant response from China, which prefers to negotiate on the issue on a bilateral basis with individual claimants, giving it more clout.

US President Barack Obama on Friday urged Tokyo and Beijing to resolve their dispute, which was seen as undermining regional stability.

"The United States, China and Japan represent the world's three largest economies and, thus, we all share an interest in promoting security and prosperity with each other and throughout the region," he told Japan's Yomiuri Shimbun newspaper.

The APEC summit also comes as countries strive to recover from the global financial crisis, and Hu pointed out that recovery was "neither firmly established nor balanced, and there exist significant uncertainties".

Deep differences, chiefly between the United States and China over trade imbalances and currency distortions, have overshadowed the forum despite APEC leaders agreeing Sunday to work towards creating a free trade zone linking the region.

Obama pressed China about its flood of exports aided by a cheap yuan, undeterred by a knockback at the Group of 20 summit in Seoul last week, which rejected US policy proposals to rebalance the global economy.

Hu, meanwhile, warned protectionism had risen "notably" in the Asia Pacific region and said pledges "to refrain from setting new barriers to goods, investment and services" needed to be fulfilled.

"We should emphasise sustainable growth, which includes not only resource and environmental sustainability but also sustainability of fiscal, monetary, trade and industrial policies, and the reduction of macroeconomic volatility and risks," he said.

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