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The Bush administration will not object if Japan resumes aid to China despite continued U.S. economic sanctions in reprisal for Beijing's crushing of the pro-democracy revolt, the White House said Saturday.

President Bush was not prepared to enter a multinational aid-to-China agreement but was "willing to discuss the matter," press secretary Marlin Fitzwater said. He said Bush wanted to hear Japan's explanation of why it plans a $5.2 billion loan package to its giant neighbor.Bush told reporters Saturday that Japan is a "sovereign nation" that can make up its own mind "on a lot of questions." He was replying to a reporter's question on whether he would urge Japanese Prime Minister Toshiki Kaifu in their Saturday talks to refrain from resuming aid to China.

"They work very cooperatively with the United States, but sometimes they have interests that predominate," Bush said.

Most non-communist nations imposed sanctions on Beijing after the brutal crackdown in Tiananmen Square last year against hundreds of thousands of pro-democracy demonstrators.

However, Bush has backed away from a totally hard line on the China question, sending high-level emissaries to begin opening the way to eventual renewed relations, easing some parts of the sanctions, and stating that he does not believe such an important geopolitical giant should be isolated.

Meanwhile, the China's Communist Party chief said the leaders of the seven industrialized powers should avoid meddling in China's internal affairs.

Jiang Zemin said the Group of Seven should "confine themselves to discussion of economic and other issues among themselves," the official Xinhua News Agency said in a report Saturday that paraphrased his remarks.

During the summit, Kaifu is expected to push for ending the punitive ban on development loans to China. Officials have indicated Japan would likely go ahead with its own massive loan plan to Beijing in any event.

Japan has been China's main source of credit and had planned $5.2 billion in a five-year program of loans. Now, Kaifu and other Japanese government officials say, it's time to open the credit window again to avoid isolating China or contributing to economic unrest there.

Japan has its own special problem with Soviet aid, contending Japanese assistance would be impossible until Moscow has settled a 45-year-old territorial dispute over four islands north of Japan that have been occupied by the Soviet Union since World War II.

Secretary of State James A. Baker III said Saturday that the summit, scheduled to run from Monday through Wednesday, was likely to conclude without a common position on Soviet aid.

Baker, interviewed by Cable News Network, said he was surprised by Soviet President Mikhail Gorbachev's recent statement that his leadership group should be replaced if his economic reform program does not succeed in the next two years.