TOKYO (AP) -- Southeast Asian nations are hoping Japan and China will mend their frayed ties, to help minimize the risk of tensions flaring into conflict in the region, Indonesian President Susilo Bambang Yudhoyono said Friday.
"It must be said that good relations between China and Japan are critical to the future of our region," Yudhoyono told a gathering on the sidelines of a summit marking 40 years of ties between Japan and the Association of Southeast Asian nations.
Yudhoyono urged all involved to build more trust, throughout both northeast Asia, where China and Japan are bickering over islands claimed by both in the East China Sea, and in the South China Sea, where several countries face disputes with China. Although Indonesia is not involved, it "is deeply concerned at the prospect of those erupting into open conflict," Yudhoyono said.
Nurturing closer ties with Southeast Asia, an increasingly affluent, resource-rich region of more than 600 million people, has been one of Prime Minister Shinzo Abe's top foreign policy priorities since he took office nearly a year ago. In a year of whirlwind diplomacy that had him crisscrossing the globe, he visited all 10 ASEAN countries at least once. China's increasingly assertive stance in the region has advanced that courtship, while soothing any backlash across Southeast Asia against Japan's own rising military profile.
Japanese media reported that Abe's government plans to announce offers of loans and grants worth 2 trillion yen ($19.3 billion) during Saturday's summit meeting.
Japanese officials describe the security situation in its East Asian neighborhood as "severe" and "rapidly deteriorating" and have sought support from the U.S. and other Asian countries in protesting China's declaration of a maritime air defense zone over the East China Sea, and in objecting to the possibility Beijing might establish a similar zone over the South China Sea.
"China is challenging the balance of power," said Ding Xueliang, a China expert at the Hong Kong University of Science and Technology. "They could do something that might even be a game changer."
Like China and the Koreas, much of Southeast Asia also suffered Japanese occupation during World War II. Until recently many remained openly wary over the potential for a resurgence of Japanese militarism.
Even Yudhoyono's vigorous endorsement of Japan's pro-active stance was tempered with caution.
"In our view, it is important that Japan's larger security role is pursued gradually, in a transparent manner and in ways that would strengthen international security, regional order and enhance confidence building," he said.
Abe and Malaysian Prime Minister Najib Razak met Thursday and agreed to extend cooperation in maritime security, including military personnel.
Japan has been stepping up economic cooperation and investment across Southeast Asia, especially since 2012, when anti-Japanese riots flared in China after Tokyo nationalized a group of uninhabited islands in the East China Sea that are also claimed by Beijing. Japan's key security ally, the United States, is also paying greater attention to the region as part of a shift in its foreign policy to assert itself in Asia as China's influence grows.
In a phone call with Abe on Thursday, Vice President Joe Biden emphasized U.S. support for moves to reduce regional tensions, the White House said in a statement.
As the world's third-largest economy, Japan also plays a crucial role in Asian finance.
On Friday, Tokyo agreed to expand currency swaps and other arrangements with Indonesia and the Philippines that are meant to help stabilize Asian financial markets. Japan also renewed a swap agreement with Singapore, the Finance Ministry said.
"Currency stabilization would contribute to Japan's national interests," Finance Minister Taro Aso told reporters.
In the first six months of this year, Japanese investment in Southeast Asia jumped 89 percent to nearly 1 trillion yen ($9.7 billion) and automakers and electronics companies expanded their factories in the region.
The summit will also showcase Japanese support for projects across the region, including loans for subway and power infrastructure in Indonesia's capital Jakarta and an early warning system for natural disasters and emergency communications.
Tokyo sent aid and rescue missions after Typhoon Haiyan plowed through parts of the Philippines on Nov. 8, killing more than 6,000 people and displacing 4.1 million. On Friday, it pledged about $660 million more to the Philippines: a 50 billion yen ($480 million) post-disaster loan and another $180 million loan to improve maritime safety.
Associated Press writers Jim Gomez in Manila and Miki Toda and Koji Ueda in Tokyo contributed to this report.