Japanese loans suspended
24 March 2006
Japan has suspended new yen loans to China because relations between the two countries have become so badly strained, the Financial Times reported. This is the first time a reduction or freezing of loans has been directly linked to politics. Shinzo Abe, chief cabinet secretary, said Tokyo would �put off making a decision on yen loans for this fiscal year to China�because of various situations surrounding Sino-Japanese relations�. In the past, Japan has cited China's growing economic power as a demonstration that the country no longer requires large amounts of aid. Japanese soft loans of US$25.7 billion have helped to build much of the infrastructure in China's booming coastal metropolises.