Japan has decided to discontinue its 40-year official development assistance projects for China, Foreign Minister Taro Kono told a news conference on Tuesday, as the need for the aid has receded since China’s economy becoming the world’s second largest.
As the two countries marked the 40th anniversary of a bilateral peace and friendship treaty on the same day, it was revealed that Japan will instead propose a new joint initiative for Asia’s two biggest economies to help build infrastructure in developing nations.
At a news conference earlier in the day, Chief Cabinet Secretary Yoshihide Suga said Japan’s ODA for China since 1979 has “fulfilled its role” given the economic growth and progress in the development of technology in the country.
During that period, China’s economy outpaced Japan’s to take the No. 2 spot behind the United States.
Prime Minister Shinzo Abe is expected to propose these plans during his talks with Chinese Premier Li Keqiang on Friday in Beijing, according to the sources.
Japan has provided China with assistance totaling ¥3.65 trillion ($32.4 billion) for infrastructure, humanitarian support and environmental protection.
Tokyo stopped giving low-interest loans — a major part of its assistance program for Beijing — in fiscal 2007, while it has continued providing financial aid for relatively small projects such as those to cope with air pollution and infectious disease.
Japan has been a major donor of funds, especially to developing nations in the Asia-Pacific region, since the start of the overall initiative in 1954, and it helped open the China-Japan Friendship Hospital in Beijing in 1984, among other major projects under its programs.
Questions have been growing over whether it is appropriate to keep providing ODA to such a large economic power. “Terminating the ODA to China is long overdue,” a senior official at the Foreign Ministry said.
The Japanese government now plans to launch a new framework with China to study ways to cooperate in helping developing nations, the sources said.
Abe is scheduled to pay a three-day visit to China from Thursday to hold summit talks with Li and President Xi Jinping in a sign of improving bilateral ties.
It will be Abe’s first visit to China to primarily discuss bilateral issues, rather than attend international meetings, since he returned to power in late 2012.