CONFIDENTIAL
OTHER DONERS' CAPITAL AID TO CHINA
1.
2.
The main provider of soft finance to China is Japan.
Japanese credits for China have included
ANNEX B
(i) May 1979: agreement on a $2bn loan for coal and oil development,
repayable over 15 years at 62.
(ii) December 1979 and December 1980: 2 aid loans of approximately
Yen 50billion (£106 million) at 3% interest over 30 years, with 10 years grace, to finance six energy-related infrastructure projects.
(iii) It was reported in August 1982 that Japan would provide Yen 65 billion (£146 million) in official loans to China on the same terms as described under (ii) during the year ending March 1983. This was said to be 8.3 per cent higher than was provided in the year ending March 1982.
Belgium, Denmark and Sweden are providing soft finance for smaller capital
projects:
3.
(i)
(ii)
Total
In March 1981 Belgium notified a 30 year interest free loan with a 10 year grace period, totalling 300 million Belgian francs (roughly £3.5 million) to be used for "miscellaneous projects" Belgium Capital Aid for China is understood to consist of 2 such 300 million Belgian franc loans. The first of these was spread over the three years 1980, 1981, and 1982. The second over the years 1983 and 1984.
In May 1982, Denmark notified a 25 year interest free loan with a 7-year grace period, totalling 125 million Danish kroner (about £8.5 million), to be used for financing contracts to be approved over 3 years.
The projects to be covered include a dairy products plant in Heilingjiang Province, a light-weight aggregate and aggregate products plant in Guangdong Province and various equipment for the Peking dairy products company.
(iii) In July 1982, Sweden notified 2 soft loans
(a) one in the range of £1.6 - £2.7 million, interest free over
6 years, for paper coating machinery;
(b) one in the range of £5 10 million, at 2%, interest over 8 years,
for plant to produce fibreboard.
Italy is known to be discussing an aid programme with the Chinese. There have been reports of a possible $500 million credit of which $100 million might be at 2% and the balance at 7%. However these details have yet to be confirmed by the Italians.
4.
Canada is understood to be proposing an aid programme of perhaps Canadian $80-100 million over 5 years, but details are not available.
No comments yet.
Private notes are available after approval.