way to deal with this question is not to isolate China but to engage China

in a friendly, frank, and constructive dialogue, through which we

convey our views and concerns and encourage them to make moves in

the right direction. The isolation of China is not conducive to the peace

and stability of the world, especially of Asia. The maintenance of stable

relations between Japan and China is essential to the peace, stability and

prosperity of Asia,including East Asia. One good

good example of

encouragement of the international community being successful to China

is the decision of China to adhere to the Nuclear Nonproliferation Treaty.

This decision was conveyed to the Japanese side during the meeting

between the prime ministers of the two countries at the time of Prime

Minister Kaifu's visit to China of the last year.

Japan has also consistently supported the reform and openness

policy of China which started in late 1970'. To the efforts of China to

develop and modernize its economy, Japan has extended yen loans,

grants and other forms of official development assistance(ODA). ODA

extended by the Japanese Government to China represents about one

third of the total ODA received by China from abroad. To China, Japan is

the largest donor, while to Japan, China is one of largest ODA receiving

countries. I believe that economic development will lead to the raising of

the people's livelihood and the political stability which, in turn, will

further develop the economy. In this cycle, the society will achieve

advances in politics and the society will become more open. I believe

also that the economic development of China is in the interest of Hong

Kong.

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