The Foreign Ministry plans to extend around 17.2 billion yen in loans to China under a program to help countries that were hit by the 1997 Asian financial crisis, ministry sources said.
However, some ruling party members could voice opposition because of Chinese naval operations close to Japanese territorial waters.
The Cabinet is expected to approve the loans later this month. The ministry will likely extend up to 14.11 billion yen for construction of a 40-km railway line in Beijing, a project designed to alleviate traffic jams and air pollution, the sources said Wednesday.
Up to 3.09 billion yen is for expansion of a passenger terminal and construction of hangars at Xianyang airport in Shaanxi Province, a key airport for inland provinces, the sources said.
The ministry estimates that more than 50 percent of the loans will be used to procure materials and equipment such as rolling stock and automatic toll collection systems from Japanese companies, the sources said.
Japan has been providing loans to countries hit by the Asian financial crisis of 1997 to help them build infrastructure necessary to underpin economic activity. The loan period is for up to three years.
Vietnam, Malaysia and the Philippines have so far been beneficiaries of the loans.
China has requested some 70 billion yen in loans to finance 18 projects under the program, the ministry said.