The changes in Japanese ODA to China

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For a plentifulness of grounds many Chinese people do n’t cognize much about Japan ‘s ODA to China. However since 1979, about 30 old ages ago, Japan ‘s ODA to China has played a really of import function in China ‘s reformation every bit good as in the societal and economic development. During this period China has obtained about 3.4 trillion Nipponese Yen loans in the sum ( about 224,800,000,000 Chinese Yuan ) every bit good as other types of proficient cooperation aid and grant assistance etc. Over the past 30 old ages Japan became the largest donor state to China, as good China is besides the first recipient state to Japan. Japan ‘s official assistance to China make up over 60 % of all bilateral aid provided to China in all donor states. Many large-scale undertakings that have been built from Japan ‘s Yen loans or grant assistance can be found in China ‘s states, independent parts and municipalities. There is no uncertainty that Japan ‘s ODA to China has made a great part for China ‘s societal and economic development every bit good as people ‘s populating degree betterment. The thesis will get down researching the inquiry from this point, viz. what is ODA, the related background about Japan ‘s ODA to China, it ‘s features every bit good as it ‘s great accomplishments during the class of China ‘s development in economic system and people ‘s populating status betterment etc. , Nipponese changing policy to China. and in the terminal the thesis draws a decision that Japan ‘s ODA to China has made great part to China ‘s Development and discourse the function of assistance in the future Japan-China relationship which have already shifted from one of common “ good neighbor and friendly relationship ” to a new “ partnership of friendly relationship and co-operation ” for peace and development in Asia.

1 What is ODA?

1.1 The definition of ODA

ODA is an English Abbreviation for Official Development Asistance. ODA means that the official sections or bureaus of developed states implements a sort of grant assistance or loan assistance to the developing states, for the aid of their economic development and betterment in people ‘s life conditions, inclusive of over 25 % grant component. As declared, we may see three critical features of the definition. First, the fiscal assistance financess provided to the development states are from the developed states official sections, including the cardinal and local disposals or their executive bureaus ; secondly, the chief intent of ODA is to do part for economic and societal developmemt of developing states ; and thirdly, ODA is a particular asistance for the development states, at least inclusive of over 25 % grant component.

1.2 The types of ODA

Most of Documents show that ODA should include three parts: grant assistance, proficient cooperation and loan assistance. Therefore this thesis will province hereinafter.

Grant Aid

Grant assistance is fiscal asistance that is extended to recipient states without enforcing an duty of refund.

Techinical Cooperation

Technical cooperation involves the engineerings being provided to recipient states to distribute the usage of engineering among people in developing states and better proficient degrees.

Loan Aid

Loan assistance involves the proviso of loans under relaxed conditions ( low involvement, long refund period ) to recipient states. ( these are in rule unfastened loans )

2 Brief Introduction about Japan ODA ‘s History in Postwar

In October, 1954 Japan joined in “ Colombo Plan ” with a position to implement assistance to the South Asia and South-east Asia. In 1955 Japan authorities appropriated 38.4 million Nipponese Yen from the budget for asistance program, and officially started to direct experts to abroad and accepted research workers from the other states. It was the first clip for Japan to supply proficient cooperation asiatance after the World War Two. In October,1958 Japan authorities signed an understanding with India authorities, assuring to supply Yen loans to India from 1958 to 1961. This Hankering loans are regarded as the beginning of Nipponese Yen loans to developing states. From 1960 to 1963 Japan authorities individually took portion in the multiple-lateral asistance program activities, and provided the related assistance to Pakistan, Negiria and Kolumbia. These activities were organized by World Bank. In April, 1964 Japan officially joined OECD, and for the first clip in a developed state province started to supply official asistance to developing states. In 1968 Japan became the asistance Centre of Asia. In 1969 DAC officially defined the economic aid organized chiefly by authoritiess as official development asistance ( ODA ) . During the 1970s Japan ‘s ODA started to accommodate new international environments. Under influence of energy crisis Japan ‘s ODA made some new adjustmens, and this period Japan provided assistance chiefly to the Middle East and the Gulf states. It was from so that ODA ‘s contents started to hold the significance of safety guard and strategic assistance significance. After the 1980s Japan ‘s ODA developed really fast. In 1989 the entire sum of Japan ‘s ODA surpassed the U.S.for the first clip, and became the largest aid-giving state. From 1991 to 1995 Japan ‘s ODA keeps the No.1 place.

3 Reason on Japan ‘s ODA to China

3.1 Related history background about Japan ‘s ODA to China

In relation to Japan, China normalized its diplomatic dealingss with Japan in September 1972 by the “ Joint Declaration ” issued during the visit of then-Prime Minister Tanaka to China. In August 1978, the “ Japan-China Peace and Friendship Treaty ” was signed. In November 1978 Chinese leader Deng Xiaoping visited Japan, taging the constitution of the construction of Japan-China economic cooperation. In December 1979, during the visit of then-Prime Minister to China, the Prime Minister officially spoke to Deng Xiaoping about the thought of Japan ‘s ODA to China. In April 1980 the two states, for the first clip, signed the understanding of Nipponese Yen Loans to China. It was the first clip for Japan to assure a bundle of long period ‘s ODA to a foreign state. For China it ‘s besides the first clip to obtain ODA from the member state of DAC of OECD. In 1981 Japan started to supply grant assistance to China. Since so, the two states expanded their political, economic and cultural exchange and deepened their mutuality.

3..2 Reason Analysis about Japan ‘s ODA to China

First, we may analysis the ground for Japan ‘s ODA to China from the geopolitics scheme facet. The international environment in the seventiess urged Japan put priosity for the development to the Chinese friendly dealingss. As a consequence of the Chinese and American dealingss betterment, Japan ‘s major obstruction factor that Japan authorities desired to develop good dealingss with China was be removed. In1972 Japan and China ‘s friendly dealingss got normalized. Chinese authorities declared, for China and Japan people ‘s friendly relationship, China will give up Japan ‘s war reparations. Hence, many Nipponese that experient invasion of China war were moved profoundly. They thought the Nipponese economic system had developed, should supply the economic cooperation to China. In August 1978, the “ Japan-China Peace and Friendship Treaty ” was signed. In the same twelvemonth China authorities besides established the Open and Reform Policy. The Chinese and Nipponese intergovernmental fund cooperation status was mature bit by bit. Furthermore, under at that clip Nipponese and American economic clash was worsening. Japan bit by bit realized to follow US ‘s malpractice in the diplomatic negotiations, and considered it ‘s really necessary for Japan to enlarge diplomatic infinite. But at that clip Japan ‘s dealingss with former Soviet Union, owing to act upon on historical accrued grudges, territory struggle and safety menace, their dealingss did n’t got better. In the multiple factor drift, Japan was willing to develop the good dealingss with China. Second, we may see the ground from the foreign economical strategic facet. Therefore Japan paid more attending to energy trade with China. At the same clip Japan besides took involvement in the trade name new and huge market potency in China. Third, we may see from Japan ‘s bilateral policies to China. Japan ODA ‘s policies to China were established on the overall rating of political relations and economic system. In footings of political relations, Japan took the ODA accomplishments as concrete manifestation of Chinese and Nipponese friendly dealingss every bit good as the method of back uping China Reform and Open Policy. In footings of economic system, Japan hoped the ODA can advance China ‘s energy development and alteration China transit status. One side for Japan the energy import can spread out, and the other side the economic and trade dealingss between two states can besides be improved.

3.3 Time division of Japan ‘s ODA to China

Japan ‘s ODA to China may split into following three times.

Development period ( 1979~1989 )

This clip may be considered as the cupboard clip since China and Japan established diplomatic dealingss. For Japan, besides consideration of advancing the Chinese and Nipponese economic system dealingss, they besides assisted China ‘s reform and unfastened policy positively. Therefore this clip assistance has the suited consequence. Furthermore, in the grant assistance facet, we may see the symbolic accomplishments in Chinese and Nipponese friendly time- ” the Chinese and Japanese Youth Exchange Center ” every bit good as the celebrated “ China-Japan Friendly Hospital ” and so on.

Adjustment period ( 1990~2000 )

Although this clip ‘s Hankering loans still coordinated China ‘s development planand besides provided the immense assistance, after 1996, the 4th Nipponese Yen loan ‘s manner had the alteration. Originally five to six old ages as unit ‘s loan manner took three old ages as the foundation. The two parties agreed that above three old ages plan can widen two old ages to cover with, that means can accommodate the manner of “ three old ages plus two old ages ” . Simultaneously the undertakings provided, except those anterior substructure building contents like transit and electric power etc. , besides were increased some new points, such as environmental protection, inland development contens and so on. Particularly in 1999, the environmental protection undertaking occupies 14 points in full 19 undertakings. In 2000 there are 20 points in full 23 environmental points Furthermore this clip dealingss between the two states no longer like on last century 80 ‘s are so smooth, for illustration, the political relations job, military every bit good as national defence cause Japan no longer unconditionally to assist China.

Phasing out period ( 2000~2008 )

Along with the Japanese domestic finance environment deterioration, Japan ‘s full ODA budget has besides encountered the contraction. Furthermore, some domestic people in Japan raised ailment about Japan ‘s ODA to China. The sum of Nipponese Yen loans starts to diminish aggressively after making the extremum in financial 2000~2001. Provision methods of Nipponese Hankerings loans adjusted a new manner, that means the individual twelvemonth sum of Yen loans will be provided harmonizing to the long list. In add-on, before the 2008 Beijing Olympic Sports will be held, Nipponese Yen Loans of new

undertakings will be stopped.

4 The contents of Japan ‘s ODA to China and It ‘s features

4.1 The contents of Japan ‘s ODA to China

Japan ‘s ODA to China chiefly includes three parts: Nipponese Yen loan, grant assistance and proficient asistance. Nipponese Yen loan is the chief portion. China calls it the capital and fund cooperation between China-Japan authoritiess, whereas Japan names it “ Japan ‘s Economic asistance to China ” . As Yen loan and Grant assistance are listed into the point contents of ODA ‘s fiscal disbursals by Japan authorities, hence Japan frequently calls Yen Loan Aid “ ODA to China ” .

Nipponese Yen Loan belongs to repayment loan assistance. It supports the large-scale fiscal undertakings during the class of China ‘s economic development and societal development. It involves the proviso of loans under relaxed conditions ( low involvement, long refund period ) to China. ( These are in rule unfastened loans ) .For illustration, Yen loans in 2001, one-year involvement rate is 0.75 % ~2.2 % ; Yen loans in 2004 is 0.75 % ~1.75 % , but the repayment period is 30~40 old ages long, including 10

old ages valid period. From 1980 to 2000, Japan ‘s Official provided four times Yen loans to China. This sort of loan is suited for constructing large-scale undertakings with long on the job period, moreover the loan can be adapted for the orbit of national economic system 5th program to utilize. This is a particular intervention for China. Many large-scale, long-building period substructure undertakings in all over the state are done, or being built, these undertakings money are from Yen Loans. For illustration, through Nipponese loan assistance, Beijing Capital International Airport and Beijing Subway Building Project ;

Chongqing metropolis, Dalian metropolis, every bit good as Guiyang metropolis ‘s enviromental building point ; Hunan state, Hubei state every bit good as jiangxi state ‘s flood-proof building ; Inner Mongolia, Ningxia, Guizhou, Xinjiang, Gansu every bit good as Qinghai ‘s telephone extension points, etc. , these points fiscal assistance are from Nipponese Yen loan assistance. ODA to China began in 1979 and from that clip to the terminal of 2004, about 31,331 trillion Hankerings in loan assistance has been implemented, accouting for more than half of the other states loan entire value. By the terminal of 2006 Nipponese Yen Loans to China is 623 trillion Hankerings, playing a important function in the realisation of China ‘s current economic growing. Nipponese Grant assistance refers to a sort of assistance fund which provides to the Chinese authorities by Nipponese authorities for some particular undertaking, and this fund does n’t necessitate to refund. The intent of grant assistance is to back up cultural development and the higher instruction publicity, and simutaneously promote Japan-China ‘s cultural exchange every bit good as understanding reciprocally. The

contents of grant assistance includes: to supply the equipment, the installation and the auxiliary related package. The assistance object is higher instruction, civilization, athleticss, cultural relics saving, including university, research institute, library, athleticss installations, ruins, museum etc.

Technical assistance means that Chinese authorities dispatches the forces to travel to Japan to make research work. All disbursals concerned are paid by Nipponese authorities. Or the Nipponese side depatches the expert to travel to China to talk, learning related engineering or supplying the equipment. The purpose of proficient assistance is to assist China further the endowment, enable them to hold on the proficient know-how so as to back up China ‘s development and building. The Chinese Affair Agency of JICA is in charge of the proficient assistance and grant assistance to China. The harangue assistance and thchnical assistance all do non necessitate the Chinese authorities to pay disbursals. It belongs to the class which grants.

4.2 Features of Japan ‘s ODA to China

As particular dealingss between China and Japan, Japan ‘s ODA to China nowadayss different features with Japan ‘s ODA to other states.

First, the grant component contents of ODA addition endlessly. In the 1980s the grant portion of Japan ‘s ODA to China merely accounts for 20 % ( the lowest twelvemonth merely accounts for 10 % ) . In the 1990s the grant portion increases to 30 % . After 2001, the grant portion has already continuously increased to 40 % . In 2003 the grant portion about occupies one half of net payment sum of ODA. Second, the sum of Nipponese Yen loans to China is rather immense. Although the most developed states, like Germany, England, France and so on, besides provide the economic assistance to China, but Japan is China ‘s largest giver state ( chart 1, as stated ) . For illustration, the sum provided by Japan ‘s ODA to China in 2000 histories for 61.2 % of the entire sums provided by assorted states ODA to China.

Japan is the largest donor state

( Net payment sum, unit: million USD, in 2000 ) entire sum: $ 1,257.5 million dollars, Japan accounts for 61.2 % aˆ‚

Third, In order to organize with China ‘s economic building the proviso methods of Nipponese Yen loans use the multi-years program to help China ‘s Developmemt Plan ( Sixth Five-year Plan, etc. ) before 1999. ( Subsequently harmonizing to state of affairss alter the methods are adjusted as “ individual twelvemonth proviso ” ) . This is the particular intervention to China. In 1980s, Nipponese Yen loans are chiefly used to develop the eastern portion, costal country of China. Whereas nowadays the Hankering loans are chiefly used to develop the inland, undeveloped in-between portion and west country in China. In a word, the usage of

Nipponese Yen loans coordinates closely with the Chinese of import economic development contents. Fourth, at the get downing the Nipponese Yen loans are chiefly used to construct the infrastruture building facets, such as airdrome, seaport, railway, electric power, communicating etc. Afterwards more used at the urban building ( for case running H2O, sewerage intervention, metro and so on ) every bit good as the Fieldss of environmental protection, forces developing etc. Fifth, Japan ‘s ODA to China ever is one of nucleus contents of Nipponese policy towards China. In order

to show friendly relationship to China, the cabinet of then-Prime Minister ( a¤§a???­?eS? ) , for building of China and Japan ‘s Friendly Hospital, rendered 16,430,000,000 Nipponese Yen asistance gratis about equipment installations. Sixth, the political relations personal businesss between two countriesoften influence Japan ‘s ODA to China. For illustration, Japan weighed some factors as the development assistance criterion, such as China military outgo, the human rights, the democratisation, the market economic system and so on.

4.3 Policy Changes

In its latest five-year medium-term policy papers on ODA, announced in August

1999, the hereafter attack and precedence issues are outlined. Japan will emphasis DACs

“ Development Partnership Strategy ” in which the betterment of life criterions of all world is the chief aim of development co-operation. A figure of specific ends for societal development are besides formulated. They include a decrease by one half the proportion of people populating in utmost poorness, proviso of cosmopolitan primary instruction, and the riddance of gender disparity in instruction. The key to recognizing these ends lies in self-help attempts as developing states work towards economic take-off. The importance of bettering the environment for private sector activities and influx of private financess is emphasized, as is increased chances for Nipponese concern to take part in ODA undertakings every bit good as farther coordination between the different signifiers of economic co-operation ( that is ODA, OOF and private investing ) . Harmonizing to this policy papers, particular “ state aid plans ” are to be formulated for major receivers. The plans will stipulate the significance of the aid provided by Japan, its basic aims, the precedence issues and Fieldss and the signifiers of aid to be deployed. These plans will take into history coordination with other givers every bit good as the private sector. This is a considerable alteration from the earlier policy of O.K.ing ODA on a request footing. It will further beef up the Nipponese influence on how its assistance money will be used and

therefore it might non be so popular among the receivers. It besides implies that there will be stronger co-operation between the two implementing bureaus: JICA ( that deals with the grant assistance and proficient aid ) and JBIC ( that is in charge of the loan assistance every bit good as OOF ) .

5.The Japanese-Chinese ODA Relationship from Past to Show

War reparation from Japan was ne’er paid to the Peoples Republic of China although they suffered under the Nipponese aggression. After WW II both the Peoples Republic of China and Taiwan renounced reparations. The Nipponese Peace Treaty was non signed by the Peoples Republic of China in 1951 and a twelvemonth subsequently Japan, an ally of the Untied States, signed a pact with Taiwan. From the origin of its assistance plan, Japan extended aid to Taiwan. This continued until the induction of Japan.s diplomatic dealingss with the Peoples Republic of China in 1972.

An ODA plan to the Peoples Republic of China commenced after the declaration of an unfastened door policy and Prime Minister Ohira Masayoshi.s visit to China in 1979. Since that clip ODA has grown tremendously. Between 1982 and 1986, China was the individual largest receiver of ODA from Japan. The incident at Tiananmen Square in 1989 led to a impermanent surcease of ODA, but assistance was shortly resumed, Japan being the first state to reconstruct friendly dealingss with China8. In August 1989 it lifted the freezing on on-going undertakings and in October that twelvemonth the World Bank resumed its loaning to China for human-centered assistance. After that, Japan extended grant assistance and in July 1990 it announced that all assistance would bit by bit be resumed. Soon after that other industrialized states followed one after another. Since so China has

remained as one of the major, if non the top, receiver of Nipponese assistance.

On a bilateral degree Japan has been the largest subscriber of ODA to China. It has normally contributed twice every bit much as the 2nd giver and frequently more than the largest

many-sided giver IDA of the World Bank.

The largest portion of the assistance is given in the signifier of loans. This has made up 75 per cent of the entire assistance. The loans have been announced in the signifier of four bundles of five twelvemonth each, fiting with the Chinese five-year programs. In fact, the Nipponese loan-aid has been provided merely to undertakings included in the Chinese ain programs. This is a strong divergence from Japan. regular budgetary processs of one-year committednesss. This is a particular intervention that has been extended merely to China.

The five-year bundles have all been orally announced by Nipponese Prime Ministers to Chinese leaders on different occasions. This can be seen as a cogent evidence of the political importance of ODA loans to China. Such affairs are non delegated to the bureaucratism to manage but are presented by Nipponese Prime Ministers in connexion with meetings where other affairs are besides discussed.

The first two bundles of ODA loans ( 1979-1984: 331 billion hankerings and 1984-1989: 540 billion hankerings ) were characterized by the fact that funding for transit substructure undertaking, peculiarly for coal transit had been emphasised. In the 3rd bundle ( 1990-1995: 810 billion hankerings ) the range was slightly broader as was the figure of undertakings. In add-on to transit undertakings there were H2O supply and sanitation, gas supply, communicating undertakings to associate together several metropoliss, fertiliser works undertakings and substructure undertakings in economic development zones.

The grant by the Japanese to suit the Chinese five-year programs has a

figure of practical deductions. One of these is that it has been hard to do major alterations during this period even if the precedences of Nipponese ODA policy alterations.

When the Nipponese ODA charter was adopted in 1992 it could non be applied to the content of the 3rd hankering loan bundle as this had already been approved. That is one of the grounds why the Nipponese side now has decided to abandon the five-year bundle system and supply Nipponese ODA on a annual footing from 2001.

The Chinese atomic testing in 1995, which was in direct misdemeanor of Article 3 of the ODA Charter, led to a impermanent.freeze. of Nipponese grant assistance. This was partially due to a strong local sentiment in Japan against the testing. As grants are merely around six per cent of the entire assistance, it did non consequence the sum of assistance to China in any major manner. The freezing was ended when the testing was over in 1997. The withholding of assistance while China was doing atomic trials created a batch of bad will in China. The Chinese saw this as a major alteration from the yearss when assistance was given partially for geopolitical grounds such as a strong Nipponese involvement in Chinese natural resources and its market and partially as a compensation for the war reparations that were ne’er paid10. It was besides a divergence of the old Nipponese policy of seeking to divide political relations from economic sciences.

In a Nipponese clime where foreign assistance, and particularly that directed to China, is being questioned, there have been efforts to utilize ODA to set power behind Nipponese demands in other countries. The most recent illustration is the particular yen-loans for the.Beijing Urban Railway Construction Project. and the.Xi.an Xianyang International Airport Terminal Expansion Project. ( 17.2 billion hankerings ) . Agreement was supposed to be reached in the summer of 2000, but although there was no formal freezing, process was slowed down due to resistance raised in the opinion Liberal Democratic Parties foreign personal businesss commission. The chief ground for the resistance was that these were purely economic substructure undertakings, which were no longer a precedence country for Nipponese ODA. However, there were besides voices that opposed due to the addition of Chinese naval vas activities in Japans sole economic zone, which were perceived as a military threat.11 Foreign Minister Kono Yohei brought up this issue during his visit to China in August and at that clip the two states agreed to put up a formal presentment mechanism for naval vass come ining into their several sole economic zones. On September 7 the foreign personal businesss panel members approved the loans, and concluding sign language took topographic point in Beijing on October 10 2000 merely before the Chinese Prime Minister Zhus Rongjis. visit to Japan.

This new inclination of utilizing assistance as a purchase in treatment on other issues is likely to take to clash in the hereafter. During his visit the Chinese Prime Minister warned Japan against utilizing ODA to China as a diplomatic card.12 In China, such actions are seen as an effort to step in in their domestic personal businesss.

6 Japan ODA ‘s Outline and Related Contentss Adjustment to China

In 1992 Japan authorities formulated the lineation of ODA. The lineation stipulated the Japanese ODA ‘s end, the significance, the basic thought and the assistance policy and so on. 1n 1999, Japan authorities worked out ODA ‘ s midium policy, determined subsequently 5 twelvemonth ‘s assistance policy. In August 2003 the Nipponese Cabinet conference passed the lineation of Japan ‘s ODA. That means the authorities made the accommodation to the ODA policy once more since the 1990s in last century. As to Japan ‘s ODA to China, the Japan International Cooperation Agency ( JICA ) established an asistance research organisation about China for the first clip in 1989, and submitted a concluding research paper in 1991. The research paper proposed that ODA should back up China ‘s reform and unfastened policy, recognize the economic stablization and extinguish rising prices as the end, take substructure and riddance economic system development constriction as cardinal assistance policy. In 1997 JAIC established the 2nd asistance research organisation, and presented another concluding research paper. The paper suggested that ODA should decide the jobs related with the Chinese economic system rapid development as asistance policy. That means ODA should pay more attending to the development of the interior country, extinguish poorness and the local disparity, protect the envirnment, promote the agribusiness development and the grain supplies, push the market economic system establishment

building etc. After entry into the new century, confronting with the new environment, specially taking at the Nipponese domestic unfavorable judgment and the alienation, the Nipponese Ministry of Foreign Affairs widely sought for assorted sentiments, in October 2001 Japan authorities formulated “ Economic Asistance and Cooperation Plan for China ” . The program included new assistance policy for China. The concrete alteration manifests in the followers: In footings of Nipponese Yen loans, loan sum reduces well. For illustration, compared to the last twelvemonth, in 2001 financial twelvemonth Nipponese Yen loan is 1613 billion Hankerings, the sum reduces 24.7 % . It is the lowest sum since 1996.

Loan conditions raise every bit good. Because in 2002 China mean GDP per individual has amounted to 911 US dollars, entered the low income developing state ranks from the destitute developing state. Nipponese Yen loans lay peculiar accent on environmental asistance. For illustration, in March 2002 among 15 points of Nipponese Yen loans the environmental protection loans are 7 points, the loan sum histories for 54 % . Nipponese Yen loans put peculiar emphasis on the inland asistance. Along with China west large development scheme execution, Japan slao at the same time increased to the western country loan undertaking. Yen loans increase the forces preparation assistance. For illustration, among 15 points of Yen loans in 2002, 6 points belongs to forces developing. Compared to the beginning of Yen loans, after 2000 the coastal country infrastruture assistance reduces.

7 Japan ODA ‘s part to China development

7.1 Consequences achieved by Yen loans to China

Japan ‘s ODA to China includes three major parts: Nipponese Yen loan, grant assistance and the proficient asistance cooperation, in which Nipponese Yen loan sum is the biggest, the consequence is besides most singular. Over 30 old ages Nipponese Yen loan has constructed many big-sized undertakings successfully, such as in the field of energy and resources development, transit, communicating infreastructure building every bit good as in the agriculture and forestry, urban building, environmetal protection. Harmonizing to uncomplete statistics, its chief building undertaking approximately distributes in following 10 facets. Railway and main road building, seaport and airdrome building, urban communications betterment, electric power edifice, energy preservation,

telecommunication and information system, reservoir building, constructing fertiliser works, urban constrution and town gas every bit good as metropolis H2O supply and environmental protection. For illustration, Yen loans have been used to supply about 35 % ( about 4,600 kilometres ) of China ‘s entire electrified railroad extension ( about 13,000 kilometres ) , to construct about 13 % ( approxmately 60 ) of the big 10,000 dozenss positions in Chinese ports ( about 470 ) , and to supply about 35 % ( about 11 million dozenss a twenty-four hours ) . ( All figures as of 1998, from surveies conducted by the Japan Bank for International Cooperation. ) In the 1990s Nipponese Hankerings loans hold the really of import position in the Chinese capital building and the investing. At the really beginning of China reform, China faces the deficiency of the monolithic financess. Japan, at that clip, was the first state to back up China ‘s reform and unfastened policy and provided the fund to build substructure undertakings. From intermediate phases of 1990s, the cardinal point of Nipponese Yen loan starts to alter the contents from the facets of substructure building to the environmental protection and forces preparation, from the seashore to the inland.

After 2004, along with Chinese economic system lifting and foreign investing increasing, Nipponese Yen loan ‘s sum decreases continuously to 858.75 trillon Nipponese Yen. By the gap of Beijing 2008 Olympic Sports Meeting Japanese Yen loan ended its history destiny.

7.2 Consequences achieved by grant assistance and the proficient cooperation.

From 1980 grant assistance to China started to transport out in basic lives aspect, such as in medical wellness attention, environmetal protection, forces preparation and instruction field. By the terminal of 2004 the sum of grant assistance is 1,457 hundred million Nipponese Yen. For illustration, China-Japan friendly relationship Hospital that was established through grant assistance is one of the major medical establishments in the Beijing metropolitan country, handling about 3,000 patients each twenty-four hours. In the country of proficient coperation the Japan International Cooperation Agency ( JICA ) has accepted trainees from China

for the intent of supplying aisitance to cuitivate administrative forces. As JICA had accepted a cumulative sum of over 15,000 trainees, and the Association for Overseas Technical Scholarship ( AOTS ) had accepted more than 22,000 trainees to foster the human resources required of or industrial publicity. JICA has besides dispatched 5,000 experts to China. Past ODA undertakings in China included large-scale economic substructure undertakings, including the edifice of roads, airdromes and power of Stationss, substructure undertakings in medical and environmental countries every bit good as forces developing and directing experts to function China etc. These undertakings and AIDSs have played a important function in the realisation of China ‘s current economic growing and people ‘s populating degree betterment.

8.Policy Changes in Nipponese ODA to China

The 4th hankering loan bundle ( 1996-2000: 580 billion hankerings for the first three old ages and 390 billion for the undermentioned two ) , in add-on to the economic substructure undertaken so far, emphasized the environment and agribusiness and in footings of regional development, the development of the inland.

Environmental saving, set frontward as a precedence country for Nipponese ODA in general, received a portion of 16 per cent of the hankering loans. A bulk of the undertakings in the last two old ages of the forth hankering loan bundle, 18 out of 28, were directed at the inland country.

Figures from OECD13 show that the Peoples Republic of China was the individual largest recipient state of ODA in 1998. It received 2.4 billion US dollars, 6.7 per cent of all ODA. Japan is the chief supplier of ODA to China at present. A job with it is that it is non all that popular in Japan. Neither is ODA in general. Aid to China has been in the centre of the argument.

Harmonizing to the present program for ODA, Japan is to explicate a.country aid plan. for all the major receivers. MOFA ( the Ministry of Foreign Affairs ) is in charge of explicating such a plan and it started to make so for China three old ages ago. Due to severe unfavorable judgment of the assistance to China in the mass media and the political argument on the assistance to China even within the regulating LDP party formation of the plan was stopped16. The chief points of unfavorable judgment were that:

1.China itself is an aid-providing state and does non necessitate to be a recipient state.

2.Japan.s assistance to China is non seeable to the Chinese people.

3.Aid undertakings are non decently evaluated.

4.Aid allows the Chinese authorities to apportion more of its budget to a military physique up.

5.China must take its ain enterprise in work outing jobs such as poorness.

to work out the dead end over the state aid plan to China a unit of ammunition table conference composed of 15 people from academe, the private sector and non-governmental organisations was organized to give advice. In their study published in December 2000 they suggested extremist alterations of Nipponese ODA. These were adopted as official policy in the Autumn of 2001.

Aid determinations should be made harmonizing to the conditions at the clip and how good the undertaking matches with development precedences in the state aid plan. This is a extremist alteration. Before the alteration China, every bit good as many of the other receiver states in Asia, has known approximately how much money to anticipate every twelvemonth. Now China has to come up with suggestions that are considered interesting plenty for Japan to back up and can non take for granted that they will acquire a certain support.

Refering the precedence countries, a move from substructure development in the seashore

countries towards more environmental and societal substructure in the inland is adopted and the focal point on inland and environment has been be sharpened. There is besides a determination of more.soft. type of assistance such as aid to beef up the legal model for economic minutess every bit good as good administration. Other precedence countries are an addition of common apprehension through an addition in exchanges on a figure of degrees, poorness relief and different steps to back up Nipponese concern involvements in China. Money is besides put aside for the specific intent of doing the Nipponese assistance seeable in the signifier of advertizements etc. This new policy became clearly seeable when ODA hankering loans were extended in March 2002. Of the 15 ODA loan committednesss, seven undertakings or 54 % of the entire loan sum ( 161,366 million hankerings ) are for the environmental protection. Six undertakings or 19 % are for the higher instruction undertakings, two undertakings or 27 % of the entire loan sum are for the regional development undertakings. Of the 15 ODA loan committednesss, 13 undertakings or 85 % of the entire loan sum are for inland part aid undertakings and are expected to contract the income spread between the coastal and inland parts in a comprehensive manner.

9.The Role of Aid in the Future Relationship

As for ODA to China, it seems that the Nipponese authorities is now seeking to take the enterprise over what undertakings that its assistance money is used for. Up to now the determinations with respect to the most of import undertakings for economic development has been done by the Chinese authorities. Now there is a new thought that it is Japan that should put the precedence countries harmonizing to their ain policy and that Japan ‘s ain national involvements besides should be taken into consideration19. One mark of this is the surcease of the five-year loan-aid bundles coordinated with the Chinese five-year programs. Another is the accent on environment and anti-poverty steps, the countries that are non needfully the chief precedences of the Chinese authorities.

On the political degree, ODA will go on to be of importance in the two states. relationship. Nipponese Prime Ministers are likely to go on with their gift giving diplomatic negotiations in connexion with meetings with Chinese leaders where other affairs are besides discussed. In a sense ODA will hold the map of being the gum that keeps the dealingss together. The positive manner of utilizing ODA, holding it as a proverbial carrot, will still be of import. The negative usage, such as stop deading grant assistance in connexion with Chinese atomic testing, is likely to do clashs. The Chinese continued the proving harmonizing to its ain agenda and the freezing of assistance merely created a batch of sick feelings and a sense of misgiving. The prolonging of the process for the particular yen loans in the summer of twelvemonth 2000 is an illustration of how the public sentiment at place can do Nipponese politicians use ODA to do their protests against Chinese behaviour heard. This manner of utilizing assistance is rather hazardous nevertheless, as it might originate anti-Japanese feelings. The internal argument in Japan on ODA to China has besides clearly revealed Nipponese sentiments towards China20. To a certain extent ODA has already become another.issue between the two states.

Japan has strong motives for desiring to incorporate China into the universe community and assist it prosper instead than seeking to insulate it and enforce countenances. One, Japan is one of the chief holders of Chinese debt. Two, a policy of isolation would most probably besides hurt Nipponese concern involvements and, three, it might make instability in China, which is something Japan would non wish to hold.

Still, there is a great demand for capital in China as there are many undertakings that need funding. Nipponese ODA loans are one of the most favorable 1s available on a big graduated table, since IDA of the World Bank stopped theirs. This makes it likely that the Chinese will read the Nipponese state aid program carefully and seek to squash some of the undertakings they already have in the grapevine into the different precedence countries so that they will be eligible for assistance. To a certain extent they will hold to Nipponese ODA loans even for undertakings that might non be their highest precedence. The involvement is likely to diminish as conditions are increasing nevertheless and in no manner, will they allow Japan regulate their development procedure.

In the hereafter there is likely to be a lessening of ODA sing the policy alterations and the terrible financial state of affairs in Japan every bit good as the fact that China has reached a higher developmental degree itself and has a flourishing economic system. It should be pointed out that although China is the largest receiver ODA, it merely amounted to 0,2 per cent of Chinese GNP, which is instead low.21 Foreign direct investing and trade will turn in importance and there will be an addition in OOF alternatively of ODA. This will be the instance particularly in the coastal countries, that is non a precedence country of ODA any longer, but where there is a great involvement from the Nipponese concern community. Conditionss might be less favorable for OOF than for ODA, but this is a field were there is less transparence and Nipponese concern involvements can more easy be promoted.