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VII AID TO CHINA
The two countries which have so far offered aid loans to China are:-
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Japan which in April 1980 concluded an agreement to give China Tow interest loans totalling 50 billion yen (approximately £100 M); a second tranche of 56 billion yen was announced in November 1980. The loans which are in principle untied are repayable over 30 years, including a 10 year grace period, at an annual interest rate of 3%; they are part of a longer-term programme totalling about £650M. A $60M grant towards Peking hospital construction was also made. In May 1979 a resource development loan of $2 billion was made, repayable over 15 years at 6%.
Belgium which agreed in November 1979 to grant loan of BF 300M (£4.75M) at zero interest, repayable over 30 years with a ten year grace period; it was maintained that the decision on this loan was quite co-incidental to the announcement of an import contract, valued at £115M for Belgian power stations. Further tranches of BF 300M in 1981 and 1982 are in prospect.
In addition Denmark confirmed in September 1980 that they had told the Chinese that they would "view sympathetically" applications for aid loans of up to DKr100 M (£7M) per year at no interest over 25 years with a grace period. The grant element would be 25-30% and availability would be conditional upon identifying suitable projects to which the loans could be tied. Germany has also recently been reported as preparing a DM15M T£4M) development aid programme.
Apart from the limited funds made available to facilitate student exchanges under the Scientific and Technological Agreement, the UK has not made bilateral aid available to China. Apart from objections in principle it has proved difficult to identify suitable projects which would not swamp available funds such as the uncommitted part of the aid/trade provision. A new development will be the committing of about £300,000 from the UK's UNIDO contribution to support development of a pesticides centre in China.
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