BEIJING (Reuters) - China hailed a visit by new Japanese Prime Minister Shinzo Abe on Sunday as a "turning point" in relations as they agreed to upgrade ties and expressed deep concerns over North Korea's plan for a nuclear test.

Beijing had refused summits with Abe's predecessor Junichiro Koizumi, who stepped down last month, because of his repeated pilgrimages to Tokyo's Yasukuni Shrine to war dead, seen by critics as glorifying Japan's past militarism.

But Chinese leaders struck a conciliatory tone and Abe expressed "deep remorse" for past Japanese actions as he broke with tradition in making his first trip abroad since taking office on Sept. 26 to China, rather than the United States.

"Your ongoing visit is serving as a turning point in China-Japan relations and I hope it will also serve as a new starting point for the improvement and development of bilateral ties," China's Xinhua news agency quoted Hu as telling Abe.

At a meeting with Chinese Prime Minister Wen Jiabao, both sides expressed hope of overcoming animosity linked to Koizumi's regular war shrine visits, which angered China and hampered progress on territorial, trade and energy disputes.

Wen urged Abe to "properly" handle the issue of visits by Japanese leaders to the Yasukuni Shrine.

Chinese leaders agreed in principle to an invitation from Abe to visit Japan, China's foreign ministry said. State television also quoted Wen as saying China and Japan should keep up mutual visits by state leaders, suspended since 2001.

Mending ties is key to addressing last week's threat by reclusive North Korea to conduct a nuclear test, an issue high on the agenda during Abe's two-day visit to Beijing, host to stalled six-party talks on the North Korean nuclear issue.

A joint statement issued after Abe's talks said the two sides "expressed deep concern over the recent situation on the Korean peninsula including an issue involving a nuclear test".

Abe flies to South Korea on Monday for talks with President Roh Moo-hyun that are also expected to focus on North Korea's threat.

China and Japan agreed to "elevate" relations to a higher level, Japan's Kyodo news agency said.

"To develop our friendly cooperative relations serves the basic interests of our peoples," Wen said. "We ought to work on our China-Japan relations in line with the world trend and the necessity of our peoples," he said.

Abe said he wished to "build a relationship of trust with Chinese leaders". "Sixty years of Japan's post-war history is built on our deep remorse for our country inflicting grave damage and suffering and left scars on the people of Asia," Japanese officials quoted Abe as saying. "And it will not change in the future."

Abe's Beijing visit is seen as a chance for a fresh start for the two countries, whose economic interdependence has grown despite the political chill.

China replaced the United States as Japan's top trade partner in 2004. Japan's trade with China, including Hong Kong, reached $212 billion last year.

"The change of government gives an opportunity for both sides to build a new relationship regardless of what has happened up to now," an aide to Abe told reporters in Beijing.

Both China and South Korea had refused summits with Koizumi because of his pilgrimages to Yasukuni, which honours war criminals among war dead and has been criticised for glorifying militarism by Japan, which occupied parts of China from 1931-45.

Abe, at 52 the first Japanese premier born after World War Two, has defended Koizumi's visits to Yasukuni. Abe has also paid his respects there in the past, but again declined on Sunday to say whether he would do so as prime minister.

Experts have warned that his diplomacy could backfire in Beijing and Seoul if he later visits Yasukuni.

Abe is hoping his summitry will win plaudits from voters at home, and ease concerns in Washington about regional tensions.

Japan will never forget 'enormous damage' inflicted on Asia: Abe

Abe said that Japan will never forget the "enormous damage and pain" it caused in Asia during World War II.

Abe, an outspoken nationalist, has in the past largely avoided expressions of regret for Japan's wartime behavior.

But Abe said he told Chinese leaders that Japan reflected on its history.

"I told them that Japan once caused enormous damage and pain and scars to the people of Asian nations. With this deep self-reflection, we have lived the past 60 years," Abe told a news conference in Beijing.

"This is something common among people including myself who have lived in the past 60 years. This will not change in the future," Abe said.