The 55 billion dollar fund in the US-Japan trade agreement will only have 1%-2% used for investment, with the rest mostly being loans
Shirozawa Ryoji, Japan's chief negotiator, stated that Japan expects only 1% to 2% of the recently agreed 55 billion dollar fund with the United States to be invested, with the majority being issued as loans.
At the same time, Shirozawa told Japan's public broadcaster NHK on Saturday that through the agreement with the United States, Japan is expected to save about 1 trillion yen (approximately 6.8 billion dollars) through lower tariff rates. Details disclosed by Shirozawa indicate that Japan's actual concessions may be far less than they appear to be.
Shirozawa explained that this 55 billion dollar investment framework combines investments, loans, and loan guarantees provided by Japanese government-supported financial institutions. In this total amount, investments account for only 1% to 2%, and the US and Japan will split the profits from this investment in a 90 to 10 ratio. He also added that Japan initially proposed a 50-50 profit-sharing ratio.
Credit limit: domestic "credit line", for example, China National Petroleum Corporation has a total of 200 billion yuan in "credit lines" given by various banks - which means China National Petroleum Corporation can borrow up to 200 billion yuan from the bank.
However, China National Petroleum Corporation does not have so many projects under construction, and it doesn't need 200 billion yuan in loans at all.
Therefore, "credit limit" does not equal "actual investment amount", it only reflects the financing capability.
Original article: https://www.toutiao.com/article/1838930224314379/
Statement: This article represents the views of the author.