Tensions between China and Japan have mounted this year in the East China Sea over disputed islands. Beijing's decision last month to declare an air defense identification zone in the area has added to the fraught atmosphere.
Mr. Abe, since coming to power a year ago, has promoted Japan as an ally for Asian countries that also are wary of Beijing's growing regional clout.
These include Myanmar, a resource-rich nation that has long been in China's sphere of influence, but whose military rulers have given way to a nominally civilian administration and opened the country to other foreign investors.
On Sunday, Mr. Abe met with Myanmar's president, Thein Sein, on the sidelines of a summit between the leaders of Japan and Southeast Asian nations in Tokyo.
Mr. Abe pledged the increased aid to help Myanmar, one of the region's poorest nations, develop infrastructure, according to a spokesman for the prime minister. Japan also pledged ¥100 billion in aid to Vietnam, another nation that is embroiled in territorial disputes with China.
The Japanese prime minister said Japan would make an "effort to cooperate" with Myanmar and Thailand to develop the Dawei industrial zone in southern Myanmar.
Myanmar and Thailand are planning to develop a 6,000-acre project in Dawei, a southern port town close to the Thai border, and have sought to persuade Japan to join. The project envisages building crude oil storage facilities and a pipeline across the border, greatly reducing the cost of shipping oil to Thailand. But the plan, which was being backed by a Thai company, has stalled due to lack of capital.
Mr. Abe's support for the development, although lacking details, is the strongest sign yet that Japan could join the consortium.
Japan's more activist role in Myanmar is likely to be viewed in Beijing as part of attempts by the U.S. to contain China in the region, analysts say.
The U.S. and Japan have been among the most vocal opponents of China's air defense zone in the East China Sea.
"It is clear that the Chinese view Japan in Myanmar as linked to the U.S. policy of containment against it in the region," said David I. Steinberg, a specialist on Myanmar at Georgetown University in Washington.
Myanmar's military rulers began a reform process in 2011 that led to elections. The U.S. and European Union, in return, have greatly scaled back economic sanctions on the country imposed after the military regime killed thousands of pro-democracy protesters 25 years ago.
A number of nations and companies have lined up to invest. Japan has been more active than the U.S., whose investors remain constrained by sanctions that Washington continues to impose on individual business leaders in Myanmar.
Tokyo has canceled $2.72 billion in debt owed by Myanmar. The foreign aid pledge on Sunday brings Mr. Abe's total aid for Myanmar since coming to power to $1.5 billion. Japan also has embarked on large-scale investment projects in the Southeast Asian country, including the 2,000-acre Thilawa industrial zone outside Yangon, the commercial capital. Japan is helping planners upgrade the city's aging transport system and sewage works.
Japan's push is part of a wider strategy in Southeast Asia, where it has pledged $20 billion in aid and development loans for the next five years and engaged in closer military ties with governments.
China still remains by far the largest investor in Myanmar, with which it shares a border. The country has invested or pledged $14.2 billion in the country, a third of all foreign investment. That compares with $292 million from Japan.
Still, Japanese investors pledged $54 million in the fiscal year ended April, up tenfold from the year before that. Chinese investors pledged $407 million, down from $12 billion invested in the preceding four years.
China denies that it sees Japan's growing role in Myanmar as a threat.
Yang Houlan, China's ambassador to Myanmar, said in an interview that "all foreign investments could and should be a blessing for Myanmar." He added: "Just because they are in, it doesn't mean we are out."
For years, Chinese companies made huge investments in Myanmar's rare gems industry and in infrastructure. A $2.54 billion oil-and-gas pipeline that traverses Myanmar to China, and was funded and built by Beijing, opened earlier this month.
But there have been signs of strain in economic ties between the two nations. In 2011, Myanmar canceled plans for China to build a $3.6 billion dam in Myitsone, citing environmental concerns. Other resource projects have met protests.
"We have witnessed Chinese companies only interested in extracting natural resources from Myanmar, enjoying favors from the former military government while destroying a lot of the natural environment," said Ye Lin Myint, a board director at the Dawei Development Association, a nongovernment group that is monitoring development at the Dawei economic zone.
Japan's involvement in the project, he hopes, will "stop the invasion of Chinese economic colonizers."
John Lee, a visiting fellow and China expert at the Singapore-based Institute for Southeast Asian Studies, said China's frustrations in Myanmar might open the door for Japan.
But China is unlikely to pull out of such a strategic area, Mr. Lee said. "If China wants to continue to pour politically-motivated money into Myanmar, then Japanese firms will find it hard to get a foothold."
source: WSJ
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