Wednesday, March 16, 2005

Japan to halt fresh yen loans to China in FY08

Kyodo News, March 16, 2005

TOKYO, March 16, Kyodo - The Japanese government has decided to halt new yen loans to China in fiscal 2008 to coincide with Beijing's hosting of the Olympic Games, government officials said Tuesday.
The officials said the government has been working with China to cut around 10 percent of Japan's fresh yen loans to the communist country in fiscal 2004 as part of Japan's policy to phase out yen loans excluding those for ongoing projects.

Yen loans account for about 90 percent of Tokyo's official development assistance to China. The government plans to seek approval of its aid policy for China at a joint meeting of the ruling Liberal Democratic Party's panels tasked with foreign affairs on Thursday, the officials said.

The two countries have basically agreed on Tokyo's plan to phase out its yen loans to Beijing. Japanese Foreign Minister Nobutaka Machimura and Chinese Foreign Minister Li Zhaoxing apparently reconfirmed their informal agreement during a telephone conversation on Tuesday evening. The Japanese government is under pressure to reduce or end its ODA to China due to China's booming economy and big military spending. Some LDP lawmakers are demanding an immediate halt to yen loans to China due to the incursion of a Chinese nuclear-powered submarine into Japanese waters last November and other unfriendly actions.

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