It is reported that Japan plans to terminate its main aid to China by 2008, when Beijing is to host the Olympic Games.
This is in light of China's growing economic and military power.
Tokyo will gradually reduce the amount of low-interest yen loans, which account for some 90 percent of Japanese aid to China; pahsing them out completely by the 2008 Olympics.
Since 1980, Japan's yen loans to China have exceeded $29BN for projects including; the building of highways, airports, sewage systems and other infrastructure.
Japan has now concluded that Beijing will no longer need the cheap loans, they will divert resources to Africa.
Grants and technical assistance accounted for some 10 percent of Japan's total aid to China in the year to March 2004.
Calls for ending Japanese aid to China have increased, as their rleations become more strained.
China has been angered by Prime Minister Junichiro Koizumi's pilgrimages to a Tokyo shrine that honors Japan's World War II dead, including those convicted for war crimes committed during Japan's occupation of China.
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