China and Japan are expected to conclude a joint study on medium and long-term economic and trade cooperation soon, according to a senior trade official.

The two sides have held three conferences for the joint study of the Sino-Japanese economic and trade cooperation plan since last May, Lu Kejian, director of the commerce ministry's Asian affairs department, said on Friday.

The study not only evaluates bilateral economic and trade relations, but covers major areas of development for long-term cooperation.

"The study is scheduled for completion by the end of June and is expected to produce a report," Lu said. "The report will be significant for fixing the development direction and major areas of cooperation for the two countries."

Lu said China and Japan has identified great potential in a number of sectors such as logistics and small and medium-sized enterprises (SMEs).

The two countries are poised to strengthen efforts in the logistics sector, a major area of cooperation between the two countries.

The Chinese government is also ready to create a flexible business environment for Japanese SMEs, Lu said.

"China is considering cooperation in some qualified State-level development zones, in terms of SME industrial parks," he said.

Meanwhile, Lu called on Japan to address certain problems and conflicts in bilateral trade.

"So far, Japan has not yet granted China market economy status, which deprives Chinese exporters of a fair and non-prejudiced trade environment," he said.

Japan's investment in China dropped in 2006 in terms of the number of contracts, ongoing projects and finished projects.

Premier Wen Jiabao told Japanese journalists in Beijing on Wednesday that China had an open attitude toward conducting economic and trade cooperation with Japan as long as such cooperation was based on mutual benefit and equality.

He said the two countries will begin a high-level economic dialogue during his visit to Japan from April 11 to 13.

Japan is China's third-biggest trade partner and second-largest source of foreign investment, while China is one of Japan's major trade partners and the country's largest provider of imported goods.

Japan has invested a total of $58 billion in China. More than 320 Chinese companies have been set up in Japan, including major firms like Huawei and Haier.