Why Japan slashes financial aid provided to China?
Last Updated(Beijing Time):2004-11-24 16:41
The Japanese government started to provide government development assistance to China in 1979. Such financial aid is also known as "yen loan" as most of them are in the form of yen loans. According to statistics, over the past twenty-five years financial aid from Japan to China totaled 3.3 trillion yen, or US$30 billion. In 2000, Japan's financial aid provided to the Chinese government hit a peak of 214.4 billion yen, or $1.95 billion. It started to fall in 2001 year by year. In 2003, it came to 96.7 billion yen, or $879 million. In only three years, the development assistance was cut more than half, amounting to only 45 percent of the peak.
The development assistance is conductive to a certain extent in strengthening China's infrastructure establishment and promoting economic development of China. China has never denied such positive effect. However, it is by no means free lunch or alms. It also brings interests and benefits to Japan.
First of all, it produces huge economic benefits for Japan. In the business sector, Japan's financial aid is largely used for Japanese enterprises' exports to China and Japan's projects in China. That has saved numerous Japanese factories and enterprises on the verge of bankruptcy and closedown. Thus, Japanese enterprises profit enormously from the program. In the government sector, China entered into a peak period of loan repayment to Japan in 2002. That year, Japan lent to China121.2 billion yen and China repaid 96.2 billion yen to Japan. In 2003, Japan lent to China 96.7 billion yen, and China repaid 105.4 billion yen. In other words, from 2003 on, the amount of loans that China repays to Japan is much higher than that Japan lends to China.
It can be seen that the development assistance provided by Japan to the Chinese Government is paying off, and it is very rewarding. In addition, with the depreciation of US dollar and the appreciation of yen, the loans repaid by China become more and more valuable. Japan is fully aware of this; it just does not express its happiness about it.
Secondly, Japan achieves immense political interest. For decades, Japan has always posed as the leader in Asia. It regards itself as the leading player of economic development in this region and a key pole for Asia's security and stability. More importantly, Japan does not deeply reflect over its invasion and crimes committed during the WWII. Rather, it is eager to have a try in the international political arena, and covets the status of a permanent member of UN Security Council. A very important reason is that, in Japan's view, it is entitled to do so as it makes contribution to Asia and the world through government development aid and participation in UN peacekeeping actions and anti-terrorist campaigns.
Thus, it is obvious that the government development assistance provided by Japan to China is mutually beneficial. Then why does Japan drastically slash the assistance? Japan gives the following grounds:
First of all, China sees rapid economic development. Some Japanese politicians, especially those unfriendly to China, argue that If Japan continues to provide financial aid to China, it will further expedite China's economic development and render unfavorable situation to Japan.
Secondly, some Japanese are critical of China's increased military expenditure. Some Japanese right-wing extremist groups that are hostile to China criticize China as it increased military expenditure and spread the rumor that China's military power poses a severe threat to Japan's security and interest. Thus, the Japanese Government's attitude toward development assistance provided to China has changed dramatically.
Thirdly, Japan did not achieve its political purpose. Some Japanese think the development assistance did not work to improve Japan-China relations: China becomes increasingly cold and tough in handling its relations with Japan. Under such circumstances, the Japanese is under heavy pressure in continuing to provide development assistance to China. Thus, it has to keep curtailing the assistance.
China cherishes its self-dependence heritage. It never counts on other countries' assistance or gives up its political principles to beg for assistance. China advocates economic cooperation based on mutual benefit and win-win scenarios; it hopes that Japan treats and utilizes the government development assistance provided to China in the right mentality.
Source:CE.cn
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