Thu Mar 23, 2006 2:00 AM EST
TOKYO — Japan said Thursday it is freezing loans to China at least through the end of this month because of worsening relations between the two Asian heavyweights.
Chief Cabinet Secretary Shinzo Abe said Japan will not give any more loans to China during the current fiscal year, which ends March 31, but that the government may start releasing the loans again next month if the situation improves.
"We have decided to waive a plan to provide loans for the fiscal 2005, considering the current situation surrounding the Japan-China relations," Abe said. "We will monitor future development in Japan-China relations while continuing discussion (on the loans) within the government."
Ties between Japan and China have deteriorated sharply in the past year. The two are feuding over maritime gas deposits, interpretations of World War II history and other issues.
Japanese aid to China has also come under increasing domestic scrutiny the past few years as Beijing's economy has boomed while Japan's had wallowed in a decade-long slowdown. Japan has already said it would end new loans to China by the start of the Beijing Olympics in 2008.
China has been notified of the decision through diplomatic channels, Kyodo News agency said.
Japan's loans to China began in 1979 and Tokyo has so far provided a total of $25.6 billion as of May 2005, the Foreign Ministry said on its Web site.
After peaking in 2000, the amount has steadily declined. Japan provided $735 million in loans to China in the 2004 fiscal year, which ended March 31, 2005, according to Kyodo. The amount for the 2005 fiscal year was not immediately available.
Earlier this month, Japan rejected China's proposal to jointly develop gas fields near disputed islands in the East China Sea, extending a long-running feud over territory claimed by both countries.
China has also been angered by Japanese Prime Minister Junichiro Koizumi's repeated visits to a war shrine that honors Japanese war dead, including convicted war criminals. China was invaded and occupied by Japan in the first half of the 20th century. Koizumi has refused to rule out further visits to the shrine. |
