Japan is planning to concentrate its financial assistance to China on environmental conservation and improving the standard of living in inland provinces, according to a framework of Japan’s new aid program obtained Saturday.

Japan will consequently withdraw from infrastructure development in coastal provinces but will continue to provide aid for poverty reduction and environmental projects in these areas.

Japanese officials say they have concluded that China can build railways and road networks in coastal provinces on its own.

They believe human resource development and technology transfer to relatively poor inland provinces should be prioritized.

The framework also includes a plan to reduce financial assistance to China, the second-largest recipient of Japanese aid.

after Indonesia, apparently due to fiscal constraints. With the framework set and scheduled for disclosure next month after approval from the ruling coalition, the government will start selecting projects to be financed and determine the amount to disburse to each project.

Yen loans comprise the bulk of Japan’s official development assistance, which also includes grants in aid, or outright offers of financial assistance. Japan provided $1.23 billion worth of ODA to China in 1999.

Japan will also replace its previous one-off payment of aid for projects that extend over multiple years with a plan to select projects each year, beginning fiscal 2001.

Japan formulates country-specific assistance plans for a period of three to five years with the aim of increasing transparency in its aid policy.

A plan for China was scheduled to be published in March but was delayed because of a change in administration. The latest plan is based on proposals drawn up late last year by government officials and policy planners of the Liberal Democratic Party.

The framework notes that Japan will call on China to respect Tokyo’s policy of disbursing aid to countries that curb defense expenditures and promote democratization, the officials said.

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