End of Japan ODA heralds new partnership

By Chen Yang Source:Global Times Published: 2018/10/30 18:43:41

Illustration: Liu Rui/GT

According to Japanese news agency Jiji Press, Japanese Prime Minister Shinzo Abe said Thursday in Beijing that his government will end official development assistance (ODA) to China and "the historic mission [of the ODA] is completed". Previously a spokesperson of the Chinese Ministry of Foreign Affairs acknowledged ODA's contribution to China's economic growth, saying this is a significant part of Sino-Japanese partnership for mutual benefits.

ODA is an aid program initiated by the developed world to help developing countries with economic growth and social welfare. The grant element of the aid is supposed to be at least 25 percent. Japan started providing ODA to China in 1979 since the latter's opening-up to the rest of the world. In the last four decades, Japan has provided a total of 3.65 trillion yen ($32.4 billion at current exchange rate) in yen loans, grants and technological cooperation to China. The funds were used to help China modernize through the construction of infrastructure, including railways, airports and harbors. Beijing Capital International Airport, Shanghai Baosteel Group Corporation and China-Japan Friendship Hospital are some of the significant projects developed with the help of ODA.

ODA played an important role in the reform and opening-up and accelerated China's modernization. We should thank Japan for its continuous aid for the last 40 years.

Before both countries signed a joint declaration to normalize ties in 1972, Japan was worried that China might demand indemnity for the damage and suffering caused by it during World War II. But Chinese leaders decided to give it up for the greater good of both nations, and then Japanese prime minister Kakuei Tanaka made the decision to visit China. Providing ODA to China, in one way or another, is how Japan shows gratitude for China's generosity, because if China, the biggest victim of Japan's atrocities, had demanded war reparations, the Japanese would have been under heavy financial burden.

As the Chinese economy achieved tremendous growth in the past 40 years, it is inevitable that ODA realized its mission and came to an end. On the one side, China's GDP surpassed Japan's and helped the nation become the second largest economy in the world since 2010, which makes a lot of Japanese believe that China does not need economic aid anymore; on the other side, the Japanese economy has been in a slump since the 1990s, which has resulted in the continuous reduction of Japanese ODA.

According to the Japanese foreign ministry's statistics, the country's total ODA budget has plummeted from its peak of nearly 1.17 trillion yen in 1997 to 583.8 billion yen in 2018. On a budget, the Japanese government has to make every penny count by exploring new ways of cooperation with China.

ODA is not only a contributing factor in China's modernization, but also makes Japan a beneficiary of China's development. By funding and supporting China's infrastructure, which generates easy access to raw materials, energy and labor, Japan has seen a lot of its companies becoming increasingly confident and willing to explore the huge Chinese market and make investments. Meanwhile, ODA has helped Japan improve its image in China and encouraged both countries to enhance people-to-people relationships and mutual trust.

Although it is hard to accurately calculate how much contribution ODA has made to Japan's economy, we can find some clues in China and Japan's trade statistics. According to Japan External Trade Organization, from 1979 to 2017, the volume of China-Japan bilateral trade has surged from $6.65 billion to $329.28 billion.

The end of ODA heralds a new era for China-Japan relations. Tokyo started suspending ODA aid 10 years ago as China's GDP was about to surpass Japan's. In 2007, Japan stopped offering grants for general projects in China, and the next year, all loans were cut off. In 2008, China and Japan announced the Joint Statement on All-round Promotion of Strategic Relationship of Mutual Benefit, which pushed bilateral ties to a higher level. The end of ODA means both countries are no longer in a donor-recipient relationship, but working toward a new partnership of mutual benefit, which will contribute to global prosperity.

The author is a Global Times editor and an observer of Japan issues. opinion@globaltimes.com.cn



Posted in: ASIAN REVIEW

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