Japan will consider bilateral ties as well as China's economic development in its policy on future economic aid to Beijing, the Foreign Ministry said in an annual white paper on official development assistance.

The government already plans to reduce ODA to China by 20 percent from the previous year to 96.7 billion yen in fiscal 2004. India will thus be the largest recipient of Japan's ODA.

Japan has sharply reduced economic aid to China in recent years amid strong doubts raised over the wisdom of offering hefty aid to a country enjoying rapid economic growth and building up its military.

In fiscal 2004, ODA to China will be less than half the 214.4 billion yen provided in fiscal 2000.