CHINA'S Foreign Trade Minister yesterday held talks with the president of a Japanese aid fund to try to improve co-operation over a 203 billion yen (HK$13.39 billion) loan. The discussions in Beijing came amid reports of tensions between the two countries. Wu Yi hoped the loan would be directed to development projects in central and western China as well as environmental protection, the China News Service reported. She said there had been some 'unpleasantness' during part of the loan transactions but this had now disappeared. The news agency did not give details. It was the sixth visit to China by Akira Nishigaki, president of the Overseas Economic Co-operation Fund - an arm of the Japanese Government that supplies development assistance loans. The fund has planned to help finance 14 projects this year, details of which have yet to be negotiated. The first instalment of 170.5 billion yen was injected into 22 projects last year. Ms Wu said previous loans from the fund had helped China's modernisation and strengthened economic links between the mainland and Japan. She hoped the latest loan would achieve the same results. Mr Nishigaki pledged that the fund would continue assistance to China, its largest recipient after Indonesia. Last year was considered a tough time for Sino-Japan relations with tensions raised over China's nuclear tests, the freezing of Japanese yen loans and the Diaoyu Islands disputes. Ms Wu stressed the Chinese Government attached importance to the trade link between two nations. Trade problems could be solved through consultation, she said.