The pact provides for meetings between both nations' defence officials and a mechanism for their naval vessels to communicate at sea to avert maritime incidents.
China's relations with Japan have also always been poisoned by what Beijing sees as Tokyo's failure to atone for its occupation of parts of China before and during World War Two.
China and Japan will also launch a public-private sector council to consider cooperation projects related to China's Belt and Road initiative, while China will allow Japanese investors to buy up to 200bn yuan (US$31.4bn) worth of securities in Chinese onshore markets.
Chinese Premier Li Keqiang has finished his three-day visit to Japan and is due back in China later today.
Meetings between leaders from both countries can make great strides in ties, and the two countries have agreed to expand cooperation in fields such as finance and trade, Abe said.
For his part, Abe hailed Li's remarks at their meeting on Wednesday that bilateral relations are setting sail again and will sail further.
A new chance has emerged for the improvement and development of bilateral relations, Li said, urging the two neighbors to take new steps for their ties to progress and to bolster the confidence of the two peoples and of the entire worldwide community in the development of China-Japan relationship.
Forty years later, the two sides should continue to follow the spirit of the treaty, said the premier.
More than 20 Japanese representatives attended the meeting, including former Japanese Prime Minister Yasuo Fukuda, former Speaker of the House of Representatives Yohei Kono.
Oshima congratulated Li for his successful visit to Japan.
"The volume of trade in the China-Japan-South Korea zone is 23 percent of the global trade turnover, while in the European Union and NAFTA the figure stands at 21 percent and 27 percent, respectively".
But signs of warming ties emerged late previous year, when Abe attended a celebration marking China's National Day at its embassy in Tokyo, and expressed interest in joining Beijing's "Belt and Road Initiative" spanning Asia, Europe and Africa.
Premier Li Keqiang engages in conversation on Thursday with Japan's Emperor Akihito (left) at the Imperial Palace in Tokyo. They can work jointly in innovation and high-end manufacturing as well as in the financial industry, the premier noted.
Mr Li also announced that China would present Japan with a pair of endangered crested ibises.
The progress made by China is worth learning from, said Kono, adding that China and Japan should learn from each other to achieve common prosperity and make joint contribution to the development of the world.