ABSTRACT
Japan’s ODA yen loans were cut in FY 2002 (starting April 1) by 25 per cent from the previous year’s level. Because yen loans make up over 90 per cent of Japanese ODA to China, this implies an overall reduction of over 20 per cent. In addition, new priority is being given to environmental and social welfare activities. These changes reflect a new approach in Japanese ODA policy toward China that was announced in October 2001 (See Appendix I). The key shifts may be briefly summarized as follows: 1) from the creation of physical assets to human and institutional capacity; 2) from the support of coastal industrial and trade sectors to inland region social and environmental sectors; 3) from impersonal aid to “aid with a human face;” 4) from high spending to lower spending; and 5) from little political conditionality to greater political conditionality. This is not to suggest that there will be large movement in all dimensions; only that there will be movement with the extent to be determined in each case by organizational interests and evolving political circumstances. This shift in ODA policy toward China will likely influence the future of Japanese ODA, and it has implications well beyond the narrow confines of ODA as a functional policy area, because Japan’s change in ODA policy toward China reflects changes in Japanese thinking about its broader comprehensive security needs.
