BEIJING: Japan has inked an agreement with Taiwan to allow Taiwanese vessels to fish within 12 miles from the disputed Diaoyu Islands in a surprise deal that has shaken China.

The deal threatens Beijing's campaign to reclaim the disputed area in East China Sea from the Japanese control with Taiwan’s help. China had received encouraging signals from Taiwan after a group of Taiwanese activists visited Diaoyu to protest Japan's occupation in January.

Observers believe the US, close to both Taipei and Tokyo, may have brokered the deal, which has angered China particularly due to its territorial claims over Taiwan.

“China's position on Taiwan's foreign exchanges is clear and consistent. We are extremely concerned about Japan and Taiwan discussing and signing a fishing agreement,” Chinese foreign ministry spokesman Hong Lei said.

The deal comes after 17 years of negotiations and strengthens Japan's claim over Diaoyu.

Japan's chief cabinet secretary Yoshihide said the deal was about the protection of maritime resources in the East China Sea, while maintaining that Diaoyu Islands “are inherently our national territory” and “therefore no issues are being shelved here’’.