Germany has agreed to provide 76 million euros (US$91.2 million) in grants and soft loans to China this year to support the country's environmental protection, health and training and microfinance programs as well as credits for small and medium-sized enterprises (SMEs).

The commitments were made during the 22nd Sino-German negotiations on development co-operation, which ended on Friday in Beijing.

Sino-German development partnership, initiated in 1982 by the two governments, has brought China more than 2.8 billion euros (US$3.36 billion) in funds in the forms of financial aid and technical support from Germany, with more than 70 million euros (US$84 million) in new commitments made annually over the past few years.

Though China has maintained rapid economic growth in recent years, it still needs to tackle many issues, like poverty relief, during its development. And Germany wants to work together with China to that end, said Rainer Goerdeler, Director for Asia, South-Eastern Europe and Afghanistan at the Federal Ministry for Economic Co-operation and Development of Germany, at a press conference on Friday in Beijing.

"We are also conducting co-operative projects with some private enterprises in China," he said.

As listed in the commitments for 2004, Germany plans to offer another 9 million euros (US$10.8 million) in funds to offer credit loans to SMEs in China, which is to be done via arrangements with China's Ministry of Finance and contracted local banks.

Its microfinance program will also give 3 million euros (US$3.6 million) in new funds this year. Such programs are to give small-volume lending to individuals or small businesses that may find it hard to acquire bank loans.

Germany has been the second-biggest financial supporter to China, said Xu Fangming, director of the Finance Department at the Ministry of Finance, the major undertaker of grants and loans from Germany.

It has helped with many transportation, energy, infrastructure, health and poverty relief projects in China and offered advanced expertise and technologies, he said.

"We can also make use of their expertise in many issues during the financial reform," Xu said. For example, Xu's ministry will work together with German experts on the construction of the credit guarantee system in China.

China's Ministry of Commerce will also undertake 20 million euros (US$24 million) worth of technical co-operative projects funded by Germany this year.

The money will be used to fund re-employment training, natural resource protection, energy-saving projects and co-operative programs in legal sectors, according to Zhu Hong, deputy director of the Department of International Trade & Economic Affairs at the Ministry of Commerce.

(China Daily June 12, 2004)