BEIJING (June 1, 2002 2:56 p.m. EDT) - A charity created by Microsoft billionaire Bill Gates will donate $37.5 million to combat hepatitis B in China, where two-thirds of those infected with the potentially lethal disease are found.

The Vaccine Fund's gift will be used to help immunize 35 million infants over the next five years against the blood-borne ailment, fund Executive Vice President James Jones said Friday.

The Chinese government will spend another $37.5 million on the project, which will buy vaccines to immunize newborn children in poor rural areas.

The money will also buy 500 million self-disabling syringes - specially designed to be used only one time. Reuse of dirty needles and syringes has been a leading cause of hepatitis B infection in China.

Every year, as many as 400,000 people in China die from liver cancer and other liver ailments caused by the disease, Jones said.

"People forget that two-thirds of hepatitis B infections worldwide are in China. If we can make progress here, we're getting somewhere," Jones said.

He said the project will be finalized in an agreement to be signed Saturday in Beijing by The Vaccine Fund, the Chinese government and the U.N.-backed Global Alliance for Vaccines and Immunizations.

UNICEF, which is part of the alliance, will help train Chinese health workers and monitor the money's use.

Some 60 percent of China's 1.3 billion people have had hepatitis B in their lifetime. Most recover without problems, but about 100 million have become permanent carriers - meaning they can spread the disease and are vulnerable to liver illnesses.

Like the AIDS virus, hepatitis B is spread through sex or contact with blood.

Experts say the disease in China is often spread among children, as doctors reuse needles and syringes while administering routine immunizations against other illnesses. This mostly takes place in poor rural areas.

"It's usually not a matter of bad training or even malice. It's a matter of poverty," Jones said.

He said one aim of the project is to supply enough self-disabling syringes to use in every immunization in China, not just hepatitis B shots.

The Bill & Melinda Gates Foundation created The Vaccine Fund three years ago with a $750 million grant. Donations by Western governments have helped increase the fund's size to $1.1 billion.