Tokyo May End Loans to Beijing Within 3 Years
3.18.05
Wall Street Journal, Asian Edition
By Martin Fackler
TOKYO -- Japan's foreign minister said his country could soon end a large part
of its development aid to China, amid growing concerns in Japan that it is
helping build an emerging economic and political rival.
Speaking to a committee in the Diet, Japan's parliament, Foreign Minister
Nobutaka Machimura said Japan could end yen-based loans to China before 2008,
when Beijing will host the Summer Olympics. Mr. Machimura said he had informed
his Chinese counterpart, Li Zhaoxing, during a telephone call earlier in the
week.
The loans have made up some 90% of Japan's total development aid to China in
recent years. Last year, the loans accounted for 96.7 billion yen, or $928.3
million, of Japan's 108-billion-yen aid package to China. Japan has given China
3.34 trillion yen in development assistance since it started providing aid to
China in 1979.
Stopping the loans would mark the end of an era in relations between the two
Asian giants. While China was still a relatively primitive developing economy,
Japan was able to demonstrate its dominant position in Asia by showering it with
aid. Though Tokyo never used the term, the aid was widely seen as money given
out of guilt for Japan's 1930s invasion of China that led to the deaths of
millions.
Experts say Japanese aid has contributed to China's spectacular rise. For
instance, Beijing's modern glass-and-steel airport, a showpiece of China's
modernity to visitors from overseas, was built with Japanese financial
assistance.
Now that China has emerged as an economic powerhouse, clocking a growth rate
of 9.5% last year, and is increasingly flexing its diplomatic muscle overseas,
there is a growing chorus within Japan that assistance is no longer needed. Many
in Japan now fret that their country is bankrolling a growing economic and even
military threat.
Critics of the aid policy, many of them younger politicians in Japan's ruling
Liberal Democratic Party, point in particular to China's fast-growing military
budget, which has risen by double digits in recent years. China's image as a
possible military threat was reinforced last fall, when a Chinese nuclear attack
submarine violated Japanese waters, sparking a pursuit by Japanese destroyers
and aircraft. Critics also cite China's successful manned space flight,
something Japan has yet to achieve.
"China is this looming threat on Japan's horizon," said Michael Auslin, a
professor of Japanese diplomatic history at Yale University. "Japan is asking,
`If they can put a man into orbit, why do we need to keep building their
roads?'"
China's official response was muted. Liu Jianchao, a spokesman for China's
Ministry of Foreign Affairs, said in a statement that Beijing is continuing
negotiations with Tokyo on the issue, and hopes the two sides can reach an
"appropriate solution in the interest of overall bilateral relations."
Jiang Lifeng, director of the Institute of Japan Research of the semiofficial
Chinese Academy of Social Sciences in Beijing, said China is likely to seek some
form of continued aid from Japan in such areas as environmental protection,
though perhaps based on more market-oriented support.
Opinions remain divided in China's foreign-policy community over the issue. Some
say China no longer needs aid from Japan, while others say Japan should continue
to provide some sort of aid, which they see as compensation for Japan's invasion
of China. Still, "any long-term government-to-government loans with low interest
rates must end eventually," Mr. Jiang said. "China totally understands that."
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Qiu Haixu in Beijing contributed to this article.
