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The release of Japan’s new assistance program for China has been delayed by strained relations between the two countries, according to Foreign Ministry officials.

The plan was originally scheduled to be published in March but was delayed because of a change of prime ministers, from Yoshiro Mori to Junichiro Koizumi, in April.

The Foreign Ministry obtained approval for the plan from Foreign Minister Makiko Tanaka after consulting with other ministries in June.

However, the ministry has not yet consulted with the ruling coalition over the program due to a deterioration in bilateral ties stemming from trade disputes and Koizumi’s planned visit to a Shinto shrine in Tokyo that honors war dead and Class A war criminals, the officials said.

If the new program includes a reduction in the amount of aid to China due to fiscal constraints, anti-Japan sentiment in China will increase, the officials said. China is the second-largest recipient of aid from Japan after Indonesia.

The new program outlines a basic policy over three to five years from fiscal 2001.

The program will include Japan’s withdrawal from infrastructure development in China’s coastal provinces, though it will continue to provide aid for environmental conservation, improvement of the standard of living in inland provinces and development of human resources.

Japan has concluded that China, with its rapidly growing economy, can build railways and road networks in coastal provinces on its own, the officials said.

Once the new program is approved, the government will begin selecting projects that will be financed by yen-denominated loans from Japan and determine how much to disburse to each project.

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

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