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Japan lifts temporary freeze on loans to China

Japan decided yesterday to lift a temporary freeze on aid loans to China following signs of a thawing in chilled relations, extending annual funds of ¥74 billion (US$658 million), officials said.

The loans, which cover the fiscal year up to March 2006, are ¥12 billion lower than the previous term.

Japan said in March it was delaying approval of aid to its neighbor, which it usually finalizes by the end of the fiscal year, due to sour relations caused in part by disputes over war-time memories and energy resources.

However, Tokyo decided to unblock the aid after conducting a comprehensive study, Chief Cabinet Secretary Shinzo Abe said after a meeting of a panel on foreign aid strategy including the foreign, finance and trade ministers.

"We made the decision considering the significance of Japan-China relations, environmental issues and anti-Japanese sentiment in China," he said.

The delay had upset Beijing which appealed for talks to resolve the issue.
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