The ruling Liberal Democratic Party on Thursday approved a 17.2 billion yen special loan package for China despite Japanese protests over recent Chinese naval activities near Japanese waters, LDP officials said.
The LDP's approval came during a joint meeting of the party's panels charged with foreign affairs, they said.
Chinese civilian and military ships have entered Japan's exclusive economic waters 17 times so far this year, according to a Foreign Ministry report submitted to the LDP on Aug. 8.
The low-interest yen loans are earmarked for a Beijing railway project and an airport terminal expansion plan in Xi'an, Shaanxi Province, under a program designed to help countries hit by the 1997 Asian financial crisis.
The government outlined the loan plan to the LDP on Aug. 2 in the hopes of having it formally endorsed at a Cabinet meeting and signing an agreement with China.
But the LDP, headed by Mori, balked at the loan package, with one LDP lawmaker saying, "If we extend the loans now, it will send the wrong message."
Foreign Minister Yohei Kono conveyed the LDP position to China during his visit to China from Aug. 28 to 31.
LDP lawmakers had said the Chinese acts were of great concern to Japanese security and sovereignty.