Japan says it has lodged a protest after uncovering evidence that China has started extracting gas in a disputed area near their border in the East China Sea.
Japan suspects China now has seven drilling rigs in operation out of 16 it has positioned in the disputed waters, officials say, the latest twist in a row over gasfields in waters claimed by the two countries.
"We are protesting with the Chinese side through a diplomatic channel," chief cabinet secretary Yoshihide Suga told a news conference on Wednesday.
"It is extremely regrettable that the Chinese side ... has unilaterally gone ahead with the development while the border has not yet been settled," Suga said.
Japan and China agreed in June 2008 jointly to develop the undersea reserves in the disputed area, with a ban on individual drilling.
"China needs to abandon its unique obsolete argument, that no other countries adopt, that no international rulings have admitted - that its rights extend along the continental shelf" to near Japan's southern Okinawa islet chain, a senior foreign ministry official told reporters on condition of anonymity.
China is also embroiled in a separate row with Japan over disputed islands elsewhere in the East China Sea.
The islands are controlled by Tokyo, which calls them the Senkakus, which Beijing claims them as the Diaoyus. Chinese ships and aircraft regularly test Japanese forces in the area.
In the South China Sea, which China claims almost in its entirety, it has disputes with several other nations.