|Kenichiro Sasae, director of the Asia and Oceania Bureau at Japan's Foreign Ministry, left, and Nobuyori Kodaira, head of Japan's Energy Resource Agency, right, following talks with Chinese officials in Beijing|
The dispute centers on China's plans to continue exploring for natural gas in a part of the East China Sea that Japan also claims. Japanese authorities angered Beijing recently by allowing companies to submit applications for oil drilling.
The head of the Japanese delegation, Kenichiro Sasae, left the Beijing talks saying both sides failed to reach agreement on key issues, including China's refusal to comply with Japanese requests for it to disclose documents detailing its drilling plans.
"We could not achieve consensus with China on the issues we placed importance on, such as China providing us with data gained from ongoing exploration and the suspension of exploration," he said.
Chinese officials said a new round of talks will take place in Tokyo, but neither side specified a date. Both sides agreed to set up a working group to look into the demarcation issue.
The dispute has been going on for decades, but has only recently gained wider attention - due in part to China's growing energy needs.
Thomas Schoenbaum, an international law professor from the George Washington University in the United States who is currently doing research in Tokyo, says national pride is playing a big part in the quarrel.
"Both sides are fighting over resources," he said. "There may be substantial oil and gas resources, very valuable resources. Neither Japan nor China, being both great powers, wants to back down."
Many analysts had predicted the talks would end inconclusively, saying the timing for negotiations could not be worse. China and Japan have been locked in a wider diplomatic dispute recently, stemming from Chinese resentment over Japan's record of wartime atrocities in China during the first half of the 20th century.
Thousands took to the streets of several Chinese cities in April to protest - in some cases violently - some Japanese textbooks that China believes whitewash Japan's past record of aggression in China.
Tensions flared again last week, when China's vice prime minister spurned Japan's prime minister and cut short a trip to Tokyo. The Chinese official's action came after the Japanese leader defended his visits to a controversial war shrine, where convicted war criminals are among those honored.