Document for the Vice Minister from the Aid Policy Division, Economic Cooperation Bureau

(Document for the Vice Minister)

Secret

Indefinite Duration

June 21, 1989

Aid Policy Division, Economic Cooperation Bureau

(1) Overview

(a) How to advance modernization and opening is China’s internal affair.

(b) However, with Western countries joining together and increasing their criticism, it would be inappropriate to give the impression of Japan as "a country that acts only according to economic interests."

(c) On the other hand, in relations between Japan and China there are special aspects that cannot be regarded as the same as relations between the Western countries and China. 

(d) In addition, in view of the overall situation in which China’s stability is indispensable to that of our country and, further, to the stability of all of Asia, and as our country’s economic cooperation has become an important measure in support of China’s modernization, opening, and, in turn, the improvement of the lives of the Chinese people, there is no reason to change it as long as modernization and opening are maintained on the whole. 

(e) The position of keeping commitments and agreements that have been made is also important.

(f) Considering the above, making our country’s basic policy of economic cooperation with China reflect humanitarian and human rights issues, such as acts of military suppression and the ongoing arrests of "opposition forces," would be going too far from the viewpoint of long-term relations with China.

(2) Future Specific Responses

(a) The subject can be divided broadly into "ongoing projects" and "new projects."

            (a) In principle, we will continue ongoing projects.

- For ongoing projects that have been suspended due to such reasons as those involved having returned to Japan, we will shift to their continuation if the situation has completely returned to a state of calm and following confirmation of the individual circumstances.              

            (b) New projects – position of delay for the time being

- The Third Yen Loan (810 billion yen over six years, from 1990 through 1995, for which Prime Minister Takeshita made a statement of intent in August last year) is not a formal agreement and is a new project, but we will not violate our commitment. However, as for the dispatch of a survey team in this connection, paying particular attention to its relation to international trends, we will maintain the situation of "wait and see" for the time being (at least until the mid-July Summit).

- As for other projects in the planning stage for which we planned to make commitments, we will refrain for the time being from such related actions as requests for Cabinet deliberation, signings, and survey team dispatches. As a result, there will be some delays in project implementation, including the Prime Minister’s project, "Japan-China Environmental Center Cooperation (Grant Aid)," but it cannot be helped. (In regard to responding with care concerning new projects, be careful not to use such phrases as "freeze," "cancellation," or "fundamental revision.")

- We will examine from a comprehensive viewpoint when and under what circumstances we begin to get these new projects going, taking into account such factors as whether or not the evacuation advisory and martial law are lifted, confirmation of the "line of reform and opening," confirmation of the system for accepting economic cooperation, and international trends.

(b) We should pay particular attention in relation to international trends to refraining to the utmost from acts that would make the Government of Japan or Japanese companies appear to be "standing out" or "taking advantage of the situation." On the other hand, the Chinese side will probably maneuver to pull in the Government of Japan and Japanese companies. On this point, the participation of Japanese companies in new international tenders announced by the Chinese side will require particular care.

(c) We would like to explain this basic response of ours to the Foreign Minister at the time of his visit to the United States. In addition, in giving external explanations, the West’s "sensitivities” and China’s face vis-a-vis foreign countries [TN: rest of sentence is missing and presumably continued on a following page, which is missing].