Japan to halt new development grants to China, says report

PUBLISHED : Tuesday, 14 December, 2004, 12:00am
UPDATED : Tuesday, 14 December, 2004, 12:00am

Japan will stop approving new aid grants to China in the form of official development assistance (ODA) after 2006, according to a weekend report in the Yomiuri Shimbun, one of Japan's leading daily newspapers.

A Tokyo official told the newspaper the Japanese government would also gradually decrease its ODA loan programme, bringing it to an end after the current grants ceased, Xinhua reported.

According to Xinhua, the Yomiuri report said the Japanese government would discuss the phasing-out of ODA grants with Beijing.

A spokesman from the Japanese embassy in Beijing said yesterday the report had not been confirmed.

'It is just a report, not an official decision. Our government has not made the final official announcement.'

Vice-Foreign Minister Wu Dawei has told mainland media that a decrease in ODA will not have an impact on Sino-Japanese relations.

'The crux of Sino-Japanese relations is to solve political problems,' Mr Wu told Xinhua earlier this month.

'Let things take their own course because the current economy of China is different from what it was before.'

Mr Wu's comments came two days after Japanese Prime Minister Junichiro Koizumi hinted that Tokyo would stop extending official development assistance to China.

Foreign Minister Nobutaka Machimura told parliament last month that it was 'about time China graduated' from Japan's aid programme.

Japan has pledged the mainland 3.33 trillion yen ($245 billion) in official development assistance since 1979, including ODA loans, grants and technical co-operation. So far, it has has paid off 1.5 trillion yen of the ODA loans.

ODA loans to the mainland have been decreasing by 20 per cent a year since 2001.

Xinhua's report coincided with the 67th anniversary of the Nanking Massacre yesterday, an issue which inflames Chinese nationalism.

Hundreds of contributors to the internet portal Sina.com said China should strive to become stronger without Japanese aid.