Nobuyuki Sugimoto, economic affairs minister with the Embassy of Japan, said making the decisions annually will allow Japan to take into account its financial situation when deciding on how much yen loans to give to China in that year. Yen loans are an integral part of Japan's ODA for China, which also includes free aid and technological co-operations. China's stable development is crucial to the peace and development of Asia, and is also in Japan's interest, said Sugimoto. He said Japan will continue to offer financial aid to China's economic development. The loans were made every five years, in line with China's sixth to ninth five-year plans respectively.
Official statistics show Japan accounts for about one-half the foreign aid that China receives.
The aid is mainly used on infrastructure construction, such as transportation, energy, airports, railways, ports, power stations and water-pollution control. Both Chinese and Japanese officials expressed their satisfaction over the use of the yen loans. Yu Zhensheng said the yen loans have done a great deal in helping the implementation of China's sixth to ninth five-year plans. The low-interest loans have helped shore up China's capital shortage in the construction of key projects. Annual interest rates of the yen loans are as low as 0.75 to 2.2 per cent, with terms of up to 40 years.