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Why Japan Adjusts Its Assistance Policy to China?
Starting from 2001, as is reported by news media, Japan has made an adjustment of its assistance policy to China: JPY loans in aid to China will depend on a yearly accumulative amount of loans instead of a five-year package for projects to be launched in China.
The specific procedures are: China is to put forward a project list involving a loan equivalent to a three-year demand and pick out some of the projects for further talks with Japan. Only when a consensus is made, can an amalgamated loan be approved. There will be no fixed loans to be provided from year to year. The sum of JPY loans shall be on an accumulative amount of loans according to the demand of projects to be launched.
Japan claims that a raise is thus to be achieved in the adaptability of the loans and help promote the usage efficiency of the loans according to a change of the economic situation.
However, for China, requirements become more exacting. Only for projects in accord with Japan's demand, instead of those in dire need in China, can loans be given green light. Projects elected otherwise may lead to a gradual cut in the amount of loans in aid to China.
Sugimoto Nobuyuki, minister of Economy of Japan's embassy in China, told the journalist in an interview that Japan's loans to China will focus on environmental protection and education items in inland regions. In principle, it will no longer provide similar loans for infrastructure projects in eastern regions in China.
To provide JPY loans is one of the major means of the Japanese government in aiding China. Since 1980, Japan has for four times helped China with JPY loans to a sum totaling 2667.7 billion yen. The loans have been used in 171 construction items in connection with transportation, environmental protection, energy, farming and forestry, communication and water conservancy, etc. Japan has been a country providing most preferential loans to China.
Japan's latest commitment is to provide China with 197.2 billion yen of loans in 2000. The two sides exchanged letters on March 30, 2001. The loans will be used on 23 construction items, of which, 20 are related to environmental protection and 15 items are in central and western regions of China.
East China's remarkable development in recent years has won increased respect from other countries. Nevertheless, Japan faces difficulties in economic structure, plus the Asian financial crisis and increased bad assets of banks, Japan sees slow recovery in its economy and intensified difficulties in finance.
Under such circumstances, a cut of external assistance has been demanded in Japan and its assistance to China is included without doubt. Some even suggest a 30 percent cut of its aid to China. Though the Japanese Government has made efforts for an expected amount of loan to China, an adjustment in its assistance policy to China becomes imperative.
In fact, Japan has already made some adjustments in its past loans to China. Capital used in infrastructure, industry, energy and transportation become less, while more and more money were invested in areas for environmental protection, education and construction projects in central and western regions of China.
Sugimoto Nobuyuki spoke highly of China's usage of JPY loans. He pointed out that China has never fallen into arrears in repayment. The Japanese government always trusts in the credit and repayment ability of the Chinese government.
Sources say, by the end of January this year, China had used 1653.9 billion yen of loans in contracts actually implemented. The amount of principal with interests repaid to Japan hit 571.4 billion yen.
He Ning, deputy director general of International Trade and Economic Affairs under MOFTEC, said that Japan's assistance to China has played an active role in China's economic construction. China has made full use of every cent of loans from Japan.
He also emphasized that Japan's assistance to China is not only beneficial to China, but also favorable to promote a sustaining development of the economic and trade relationship between the two countries. China's development will create a sustainable market to Japan and a "two-win" situation as well.
By PD Online staff member Du Minghua
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