The government and ruling coalition parties on Friday approved a development assistance plan that would scale back aid to China and shift the focus to environmental conservation measures, officials said.
The Liberal Democratic Party held a joint meeting with three foreign affairs and overseas investment panels and endorsed the draft for fiscal 2001 after making some additions. The draft was originally compiled by the Foreign Ministry.
The additions called for prioritizing environmental conservation steps and demanded China take a cautious stance on increasing military expenses and building up its nuclear arsenal. They also urged China to improve transparency in its economic aid to third nations, the officials said.
Prime Minister Junichiro Koizumi is scheduled to brief Chinese President Jiang Zemin and seek his understanding on the draft plan when the two leaders meet Sunday on the sidelines of the summit of the Asia-Pacific Economic Cooperation forum.
Koizumi left for the summit Friday evening. It will take place today and Sunday in Shanghai. Under the plan, Japan would basically stop providing assistance for infrastructure development projects in China's coastal regions, projects which Tokyo had seen as a key area for assistance.
Instead, assistance would focus on improving people's livelihood in inland regions. As a result, yen loans to China, which comprise the bulk of Tokyo's official development assistance to Beijing, will likely be reduced.
However, Muneo Suzuki, chairman of the LDP's special committee on external economic cooperation, told reporters the new plan "would not make a drastic cut."
The draft of the new plan was supposed to be completed by the end of March but was postponed due chiefly to a row with China and South Korea over Japan's school history textbooks and Koizumi's visit to Yasukuni Shrine, where war criminals are honored alongside the nation's war dead.