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Japan to end official development aid to China

This file photo dated September 2002 shows a pier facility for loading coal in the port of Qinhuangdao in northeastern China built with a yen loan extended as official development aid from Japan. (Mainichi)

TOKYO -- The government of Japan has decided to end its official development assistance (ODA) to China after almost 40 years as the recipient has grown into the world's second-largest economy surpassing even the donor, people familiar with the matter said.

The decision will be conveyed to Beijing when Prime Minister Shinzo Abe visits China from Oct. 25 through Oct. 27. The two countries are now discussing the possibility of creating a new governmental framework for supporting third countries.

Japan began providing ODA to China in 1979, the year after the two countries signed the bilateral Treaty of Peace and Friendship. The assistance totaled some 3.65 trillion yen, contributing to China's economic expansion and its policy of reform and openness. As the Chinese economy took over Japan's in 2010 in terms of GDP, Japanese officials began to discuss the wisdom of continuing the financial support to Beijing.

Most Japanese official assistance to China was provided in the form of low-interest loans for the construction of major infrastructure facilities such as power stations and railway networks. The program peaked in fiscal 2000 at some 214.4 billion yen in loans, but it underwent reviews as the Chinese economy grew, and low-interest yen loans ended in fiscal 2007. Since then, Japanese ODA has focused on areas such as technical cooperation including dispatching medical experts, or small-scale grants in aid for projects such as building schools in rural areas.

Even such focused assistance has dwindled in recent years, shrinking to some 540 million yen in fiscal 2016 from approximately 4.1 billion yen in fiscal 2011. For this fiscal year, the two countries are discussing programs such as sending Japanese medical and educational experts to China.

But even in those areas accepting assistance, China has made enough technological and other advances to enable the end of Japan's ODA, according to government officials. An individual close to the Japanese Ministry of Foreign Affairs said that the termination of the assistance program will usher in "a new phase in the relationship" between Japan and China. "Now we want to cooperate with China to support other (foreign) regions."

(Japanese original by Shinichi Akiyama, Political News Department)

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