CHINA / National
Japan unfreezes delayed loans to China
(Reuters)
Updated: 2006-06-06 10:15
TOKYO - Japan said on Tuesday it had decided to grant 74 billion yen
($659 million) in low-interest loans to China, more than two months after
a decision on the aid was delayed due to strained bilateral ties.
The decision on the loans for the year ended last March, made at a top
government panel on foreign aid strategy, follows signs of a potential
thaw in chilly Sino-Japanese ties.
Relations between the two countries have deteriorated since Prime
Minister Junichiro Koizumi took office in 2001 and began annual visits to
Tokyo's Yasukuni shrine, where some convicted war criminals are honoured
along with Japan's war dead.
The two countries have also feuded over territorial rights and energy
resources and have expressed mutual suspicions about each other's
military strategies in the region.
Koizumi told reporters that the decision had been made after an overall
assessment of the situation, adding that he "always attached importance"
to Sino-Japanese ties.
But Farm Minister Shoichi Nakagawa, known for taking a hard line against
Beijing, said he was perplexed by the decision.
"Why are we giving aid to China. To be honest, today's meeting was
bizarre," Nakagawa told reporters.
International bodies like the World Bank insist that despite China's
economic boom in recent years, the country still needs international
support to lift its people out of poverty.
Japan, however, has scaled back its aid to China in recent years, partly
because of concern among some lawmakers that the funds are funnelled into
military spending.
Japan decided in March 2005 to extend about 85.9 billion yen worth of
loans, bringing its total loan aid to China to more than 3 trillion since
1979, but has already decided to halt fresh loans by the time of the
Beijing Olympics in 2008.
CHINA TIES IN PM RACE
Japanese media said a meeting between Foreign Minister Taro Aso and
Chinese Foreign Minister Li Zhaoxing in Qatar last month, the first
foreign ministerial contact between the two nations in about a year, had
cleared the way for the aid decision.
Relations with China have also emerged as a focus of debate in the race
to succeed Koizumi when he steps down in September.
Chief Cabinet Minister Shinzo Abe, the frontrunner in the leadership
race, has criticised Beijing for refusing to hold leaders' summits
because of the dispute over Koizumi's visits to Yasukuni shrine. But on
Sunday Abe declined to say whether he would continue the practice if
elected prime minister.
His main rival, veteran ruling party lawmaker Yasuo Fukuda, supports a
proposal to build a new, secular war memorial where Japan's war dead can
be honoured without offending China and South Korea, where bitter
memories of Japan's aggression persist.
Chinese Commerce Minister Bo Xilai last week blamed slowing growth in
trade between China and Japan on the political tension triggered in part
by Koizumi's Yasukuni pilgrimages.
Sino-Japan trade rose just 9.9 percent last year, slower than China-EU
and China-U.S. trade, Xinhua news agency said.
Japanese business leaders have also expressed concern about the fallout
of the diplomatic feuding on economic ties.
The Japanese government decides its total aid budget before the start of
each fiscal year in April but usually does not decide on the final
breakdown until the end of the year.
Foreign Ministry officials had stressed that the delayed decision on aid
to China was not a freeze and that the flow of money had not been halted
since project loans are often disbursed over several years.
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