The Japan-Taiwan agreement signed Wednesday in Taipei would allow Taiwanese fishing vessels to operate near the islands.
The Japan-controlled Senkaku Islands in the East China Sea have been a source of intense territorial dispute with China, which also claims the islands. China calls the islands Diaoyu. The islands also are claimed by Taiwan, which refers to them as Diaoyutai Islands.
Beijing raised its one-China policy relating to Taiwan while expressing concern over the fishery agreement.
Chinese Foreign Ministry spokesman Hong Lei said his government's position on Taiwan's external interactions and other issues is clear and that it expects "Tokyo to earnestly stick to its commitments on the one-China policy as well as the Taiwan question, and deal with Taiwan-related issues in a prudent manner," the official China Daily reported.
The newspaper quoted Feng Zhaokui, an expert at the Chinese Academy of Social Sciences, as warning that the fishery agreement would become a serious issue if it labels Taiwan as a "country," which would go against Japan's previous commitment to the one-China policy treating Taiwan as part of China.
Under the Japan-Taiwan agreement, fishing vessels from both countries can operate in a large area within the designated zone without being subject to the jurisdiction of the other side, the Taipei Times reported. The two sides have been negotiating the fishery talks since 1996.
Taiwan's Liao Liou-yi and Japan's Mitsuo Ohashi, who signed the agreement, called it a big step forward in bilateral relations, the Times reported.
The agreement did not deal with their territorial dispute over the islands as they decided to set it aside.
Meanwhile, the island dispute between China and Japan has worsened after Japan nationalized the uninhabited islets last September. The issue has triggered violent protests in China and affected the $350 billion annual Japan-China bilateral trade. There have also been occasional tense incidents stemming from Chinese patrol boats operating around the islands, which are believed to be rich in maritime and energy resources.