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CUTTING GRANT AID

Japan tries to

maintain stable

ties with China

TOKYO: Japan tried on Wednesday to defuse a row with China over aid cuts to protest against Beijing's nuclear tests, but China kept up its angry criticism of Tokyo's action.

Tokyo had announced on Tuesday it was freezing most of its grant aid to Beijing, which makes up the smallest portion of its financial assistance to China, and was also considering a cut in more important low-interest yen loans.

After a day of intense debate between foreign ministry officials keen to avoid harming Sino-Japanese relations and parliamentarians wanting stronger action, the government said on Wednesday it had decided not to touch the yen loans.

Chinese Ambassador Xu Dunxin was summoned to the foreign ministry by Japanese Vice Foreign Minister Sadayuki Hayashi and was told of the action Japan planned.

But Xu, who called Japan's decision "unwise", vehemently protested against Japan even cutting grant aid, saying this could harm bilateral relations.

A Japanese Foreign Ministry official quoted Xu as saying China opposed linking economic aid with political issues.

"Such a step will deeply hurt the feelings of the Chinese public. It is like dashing cold water on budding Sino-Japanese ties," Xu was quoted as saying.

"It will have a negative effect on Sino-Japanese relations," he said.

In a rare use of its diplomatic clout, Japan had decided to freeze most grant aid until China agreed to stop conducting any more nuclear tests. Beijing resumed nuclear tests in May and conducted a second test blast earlier this month despite a storm of worldwide protest.

Tokyo decided to curb grant aid to around 500 million yen ($5.20 million) in the current fiscal year, ending next March 31, down from about 7.8 billion yen ($81.2 million) the previous year.

Xu accused Tokyo of inconsistency in its nuclear policy, noting that despite its vocal anti-nuclear stance Japan was under the protection of the U.S. nuclear umbrella.

Xu also attacked Japan for making the decision in a year marking the 50th anniversary of the end of World War Two.

"In China we would hope that Japan would reflect on the damage it caused other nations (during the war) and take appropriate measures," Xu was quoted as saying.

Xu said China had been invaded many times by powerful countries in recent history, but he said Japan had caused the worst devastation. He said China had learned a painful lesson from its history -- that a weak country is bullied.

In response to Xu's criticism, vice foreign minister Hayashi rejected Xu's accusation of inconsistency and strongly denied Tokyo was singling out Beijing for political motives.-Reuter