Toshiro Muto delivered a speech on Sunday to wrap up the ninth Beijing-Tokyo Forum held in Beijing from Oct 25 to 27. [Photo by Zou Hong/chinadaily.com.cn]

Economic ties can play a leading role in reshaping strained China-Japan relations, according to Toshiro Muto, former deputy governor of the Bank of Japan.

Muto delivered a speech to wrap up the ninth Beijing-Tokyo Forum held in Beijing from Oct 25 to 27.

The decline in trade and economic cooperation, resulting from a territorial dispute, has had repercussions in Asia and other parts of the world. The global economy, which is still struggling with a chronic downturn, was also affected, given that China is the world's second biggest economy and Japan the third, said Muto.

Bilateral trade volume topped $333.6 billion in 2012, according to the Japan External Trade Organization, sound evidence that China and Japan have become increasingly important trade partners.

The two countries have a lot of potential to further economic ties as China can learn from Japan's economic success. China should shift its export-driven growth to focus more on the domestic market and improve its service sector, areas where Japan can serve as an example, said Muto.

The former banker also mentioned the aging society, a looming challenge in both China and Japan, indicating another area where the two countries can work together.

Trade has infiltrated daily life in the two countries, with various products involved, said Muto. He called for closer economic ties in difficult times to mutually benefit both the Chinese and Japanese people.