The negotiations came at a time when relations are at their worst in decades because of differences over Japan's wartime past and its campaign for a permanent UN Security Council seat.
A spokesman for the Japanese Embassy in Beijing, Keiji Ide, said talks were under way on Tuesday, but gave no details of what diplomats had discussed so far.
The meetings began on Monday at a government guesthouse in the Chinese capital.
Japanese Trade Minister Shoichi Nakagawa said he believed the two Japanese envoys were "making clear Japan's claims to the Chinese side". He refused to provide any other details.
Nakagawa said the two countries should also hold talks on other issues to improve their troubled relations.
"We should realise that the rest of the world is watching how we deal with the problems between Japan and China, the two economic powers and Asian neighbours," he said in Tokyo.
"We should just sit down and talk"
Japanese Trade Minister
"Our confrontations are unfortunate... We should just sit down and talk, just like we are doing right now over the gas exploration in the East China Sea."
The Japanese delegation was headed by Kenichiro Sasae, director of the Asia and Oceania Bureau at Japan's Foreign Ministry.
The Chinese Foreign Ministry said it would be represented by Cui Tiankai, director of the ministry's Asian bureau.
The two sides have been feuding over rights to drill for gas in the East China Sea, which lies between China's east coast and Japan's southern island of Okinawa.
China has set up a drilling platform and begun exploring gas fields along their sea border.
Japan's wartime past sparked
violent riots in China last month
It protested last month when Tokyo said it would allow drilling in a disputed section of the sea. The area where Tokyo has approved drilling is east of the line that Japan regards as its sea boundary with China, but Beijing disputes that demarcation.
The rivalry over energy resources comes amid Chinese complaints about Japan's wartime past and its campaign for a permanent UN Security Council seat - issues that sparked violent anti-Japanese protests in China last month.
Relations between the two sides have soured since the protests.
Tensions flared again last week when Chinese Vice Prime Minister Wu Yi abruptly cancelled a meeting with Japanese Prime Minister Junichiro Koizumi during a visit to Tokyo and left the country.
Chinese officials said Koizumi's comments about visits to a Tokyo shrine that commemorates Japanese war dead, including convicted war criminals, had ruined conditions for Wu's visit.