China and Japan signed an agreement on Friday 
relating to Japanese loans to China for last year, a gesture that could help 
warm the icy relations between the two countries. 
Japan will offer 74.8 billion yen (US$660 million) to China, according to the 
document signed by Vice-Foreign Minister Wu Dawei and Japan's Ambassador to 
China Yuji Miyamoto in Beijing. 
The loans will be used in 10 projects, involving environmental protection, 
human resource and education. 
Japan's cabinet traditionally approves yen loans during the fiscal year they 
are earmarked for. 
However, the procedure was put on ice last year due to the frosty state of 
relations between the two countries. 
Bilateral ties were strained because of friction over such issues as Japanese 
leaders' repeated visits to the Yakusuni Shrine which honours war criminals from 
World War II along with other war dead. 
Another thorny issue is the row over oil exploration in the East China Sea. 
Earlier this month, the Japanese Government decided to lift the freeze on aid 
loans amid signs of mutual efforts to ease tension. 
Analysts say the move on the part of Japan is apparently aimed at improving 
Sino-Japanese relations. 
This follows Foreign Minister Li Zhaoxing's agreement last month on the 
sidelines of the fifth ministerial meeting of the Asia Co-operation Dialogue in 
Doha to promote exchanges in economic, defence and other areas between the two 
nations. 
During the meeting, Japanese Foreign Minister Taro Aso told his Chinese 
counterpart that Sino-Japanese ties were improving. He said extending yen loans 
would further accelerate this trend. 
The low-interest loans date back to 1979, seven years after China and Japan 
established diplomatic relations. 
While China is among the top recipients of Japanese aid, the amount of yen 
loans to China has been declining since peaking in 2000, with 85.9 billion yen 
loaned in 2004. 
Japan plans to terminate aid to China by 2008, when Beijing hosts the Olympic 
Games. 
(China Daily 06/24/2006 page1)