Japan PM Abe appoints China-friendly lawmakers to key posts

New Secretary-General of Japan's ruling Liberal Democratic Party Sadakazu Tanigaki, top, and new Executive Council Chairman of Japan's ruling Liberal Democratic Party Toshihiro Nikai, center bottom, arrives at Prime Minister Shinzo Abe's official residence in Tokyo, in this combination photo on Sept 3, 2014. [Photo/Agencies]

TOKYO - Japanese Prime Minister Shinzo Abe picked two veteran lawmakers with friendly ties to China for top party posts on Wednesday in an apparent signal of hope for a thaw in chilly ties with Beijing and a summit with Chinese leader Xi Jinping.

The change in executives in Abe's Liberal Democratic Party (LDP) was twinned with a cabinet reshuffle in which Abe gave the health and welfare portfolio to a reform-minded lawmaker, kept core ministers and boosted the number of women in an effort to polish his image.

In a move welcomed by Tokyo stock market players, Abe drafted Yasuhisa Shiozaki, 63, a proponent of an overhaul of Japan's Government Pension Investment Fund (GPIF), to head the ministry of labor, health and welfare, which oversees GPIF.

The fund is finalizing plans to boost the weighting of domestic stocks in its portfolio.

Abe also gave women almost a third of the posts in his 18-minister cabinet to show his commitment to promoting women as part of his "Abenomics" growth strategy.

But he retained powerful cabinet members such as Chief Cabinet Secretary Yoshihide Suga, Finance Minister Taro Aso, 73, Economics Minister Akira Amari, 65, and Foreign Minister Fumio Kishida, 57, signalling policy continuity.

Abe's new line-up faces a number of challenges, including how to repair ties with China that have been frayed by rows over disputed territory and Japan's wartime history, and whether to go ahead with a planned sales tax rise next year despite signs the economy is faltering.

"A positive economic cycle is kicking off," Abe told a news conference after the new line-up was announced.

"We're only halfway through in reforms and we need to deal with new challenges. I reshuffled my cabinet so that we can tackle these challenges boldly and vigorously," he added. "The biggest challenge now is ... to revive the regions of Japan."

In a bid for party unity, the hawkish Abe tapped outgoing Justice Minister Sadakazu Tanigaki, his predecessor as LDP leader, for the key party post of secretary-general, the LDP's de facto election campaign chief.

Tanigaki, 69, is from a moderate wing of the LDP that favors better ties with China. He was also an architect of a plan to hike the sales tax in two stages to curb Japan's huge public debt. Implementation of the second stage is now in doubt due to a string of gloomy economic data.

Veteran lawmaker Toshihiro Nikai, 75, who also has close ties with China, was appointed to a second top party post. Outgoing administrative reform minister Tomomi Inada, 55, a close conservative ally of Abe, became LDP policy chief.

"He is sending a strong message to China that he wants to improve ties. Not only Tanigaki but Nikai have good ties with China," said political analyst Atsuo Ito.