European Union leaders offered trade and diplomatic perks to Asian nations at the opening of a two-day Asia-Europe Meeting of 46 nations while insisting on the need for the yuan to be revalued.

But Chinese Premier Wen Jiabao, first non-EU speaker at the summit and indisputably the star guest of the talks, resisted international pressure.

"We must work together to promote world economic growth," Wen said.

"We should intensify macroeconomic policy coordination, manage with caution the timing and pace of an exit strategy from economic stimulus and keep the exchange rates of major reserve currencies relatively stable," he said.

There was a quick response from the EU. "We believe the yuan is totally under-valued," said a spokesman for Jean-Claude Juncker, the Luxembourg premier who also heads the eurozone finance ministers group.

"This is contributing to global imbalances. We want China to assume its responsabilities as a world power," Juncker's spokesman Guy Schuller told AFP.

Europe and the United States have butted heads with China over its currency, accusing Beijing of deliberately keeping the yuan artificially low to boost exports, causing a huge trade imbalance.

Opening the two-day talks, European Union president Herman Van Rompuy said: "the EU needs to look East. Not only in words but in facts."

Among sweeteners held out to Asia are more voice on the world's political and economic stage and improved trade, including a historic free trade deal being signed with South Korea on Wednesday during two separate EU summits with Seoul and Beijing.

China too was in the spotlight amid renewed tension between Beijing and Tokyo over disputed islands in the East China Sea.

Japan's Prime Minister Naoto Kan and Wen met briefly on the sidelines of the summit and agreed "to improve ties", a Japanese spokesman told AFP.

"There was an encounter after dinner," said Noriyuki Shikata, deputy cabinet secretary for public relations.

"They agreed to improve relations, to resume exploring ties." There was no immediate confirmation from the Chinese side.

Japanese government spokesman Satoru Satoh said earlier Kan would not hang out the dirty washing in public and put the territorial dispute on the table during official sessions, .

But he would explain Tokyo's position during bilateral talks with leaders of Australia, France, Germany, South Korea as well as top EU officials.

For the European Union, the get-together of dozens of heads of state and government in the gilded Goya-hung halls of the Belgian royal palace opens a window of opportunity to strengthen ties with Asia at a time of fast global change.

"The European Union is committed to be a stronger actor on the world stage and a stronger partner for Asia," said Van Rompuy.

Economic issues are dominating the ASEM forum, which represent 60 percent of the world's population and global trade.

But the informal talks, accompanied by a slew of bilaterals, parallel visits to NATO headquarters and contacts between business leaders, will also touch on piracy at sea, terrorism, nuclear weapons, human rights and climate change.

ASEM leaders will urge Myanmar's military rulers to release political prisoners and ensure November elections, denounced as a sham by rights groups, are free and fair, according to a draft final statement obtained by AFP.

ASEM, which meets every two years, groups the EU, the 10-member Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, India, Pakistan and Mongolia, and new members Australia, New Zealand and Russia.

Reform of the IMF was high on the agenda after the EU last week signalled its willingness to cede some power at the international lender to emerging nations, which say Europe is over-represented.

A South Korean official welcomed an EU proposal to rotate two of its seats with emerging markets as a "great improvement" ahead of a G20 summit in Seoul on November 11-12 that will discuss IMF.

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