China reacts coolly to Japan aid suspension, appealing for dialogue with Tokyo officials

China reacted coolly Thursday to a suspension of yen loans by Japan , appealing for dialogue over the decision which Tokyo blamed on deteriorating relations between the two sides.

Chinese Foreign Ministry spokesman Qin Gang said the two countries are facing "a complicated situation and we have severe hardship in our relations."

"We should have exchanges and consultations over the differences and problems and properly resolve those issues," he said at a regular briefing. "On Japan 's credit to China , we think this issue should also be resolved in line with this principle."

While Japan 's aid to China has played a positive role, Qin said the arrangement has also benefited Japan . He did not elaborate.

"Such an agreement is mutually beneficial," he said. "It is not charity given by one country to another country."

Chief Cabinet Secretary Shinzo Abe said Thursday that Japan will not give any more of the loans to China during the current fiscal year, which ends March 31, but that the government may start releasing the loans again next month if the situation improves.

The neighbors, though linked by billions of dollars in trade, are at odds over a range of issues, including clashes over their wartime history, China 's growing military power and rights to undersea gas and oil deposits that lie in disputed territory.

Japan 's yen loans to China began in 1979 and Tokyo has so far provided a total 3.13 trillion yen (US$25.6 billion; Ђ 21.21 billion) as of May 2005, Japan 's Foreign Ministry said in its Web site.

After peaking in fiscal 2000, the amount has been declining, reports the AP.


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