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Cablegate: Japanese Morning Press Highlights 12/31/07

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RUEHUL/AMEMBASSY SEOUL 6935
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UNCLAS SECTION 01 OF 09 TOKYO 005690

SIPDIS

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 12/31/07


Index:

Fukuda in China:
1) Prime Minister Fukuda's successful China trip ushers in a new
phase in Japan-China relations (Tokyo Shimbun)
2) Fukuda quite pleased with the accomplishments of his China tour
(Yomiuri)

Defense and security issues
3) China warplane over-flights of gas-field sea area in mid-Sept.
may have been simulation of a Taiwan contingency (Asahi)
4) Prime Minister Fukuda asks security panel to hold off report on
collective self-defense scenarios, one of former Prime Minister
Abe's priority goals (Nikkei)
5) Government and ruling camp to begin readying next month a
permanent bill for overseas dispatch of SDF troops that would not
require a UN resolution (Sankei)
6) Nago City to go along with a lengthening of the proposed new
runway at the , site for the relocation of Futenma base (Mainichi)


Political agenda:
7) Prime Minister Fukuda hints at cabinet shuffle in January, but
Diet dissolution would only be considered after the G8 summit
(Asahi)
8) Talk about cabinet shuffle on Jan. 13 or 14 (Nikkei)
9) Democratic Party of Japan (DPJ) to present bill unifying pension
system to next regular Diet (Tokyo Shimbun)
10) DPJ's proposed policy platform differs greatly from what
President Ozawa has been saying (Mainichi)

11) METI wants G8 Summit to adopt an international pact that would
aim at stopping counterfeit goods (Sankei)

Articles:

1) President Hu expects Japan-China relations to enter new phase,
confirms promoting mutually beneficial relationship in meeting with
Fukuda

TOKYO SHIMBUN (Top play) (Full)
December 29, 2007

Kei Sato, Beijing

Prime Minister Yasuo Fukuda had his first summit meeting on the
night of Dec. 28 with Chinese President Hu Jintao at the Chinese
State Guest House Diaoyutai. The two leaders affirmed that their
countries would strengthen cooperation in various areas: the
environment, energy, and information telecommunications. Hu
expressed his hope that Japan-China ties would enter a new phase,
noting, "I would like to work together with the Japanese leader in
order to carve out a beautiful future for Japan and China. I firmly
believe that both of us will enhance the mutually beneficial and
strategic relationship and open up a new age for our countries."

Fukuda: "Gaps are shrinking" over joint development of gas fields

The dialogue included a dinner party that lasted for some two hours.
In the session, Hu highly appreciated Fukuda's China visit this
time, noting, "It will surely contribute to facilitating the
mutually beneficial and strategic relationship and developing

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Japan-China relations." Hu continued: "The Chinese government and I
attach great value to Japan-China relations."

Apparently keeping in mind such issues as the joint development of
gas fields in the East China Sea, historical views, and the Taiwan
issue, Hu stressed; "I hope to resolve delicate issues in an
appropriate manner." Speaking of his visit to Japan planned for next
spring, Hu expressed his enthusiasm, saying, "I want to convey to
Japan a specific itinerary as soon as possible."

In response, Fukuda, aware of such issues as the joint gas-field
development, pointed out: "It is impossible for both sides to reach
agreement on every aspect, but the gaps of views between the two
countries are shrinking." Fukuda emphasized his intention to
tenaciously continue negotiations on the outstanding issues between
the two countries.

On the issue of jointly developing gas fields, Fukuda stressed at a
joint press conference (with Premier Wen Jiabao) held earlier:
"There has been positive progress in terms of resolving the issue in
specific terms. Both of us share a firm determination to resolve the
issue as swiftly as possible." Premier Wen, too, noted: "We are
willing to carry out joint development. We have taken one step
forward from the previous agreement."

In his meeting with Wen, Fukuda mentioned a referendum Taiwan plans
to conduct next year to ask the public about whether to approve of
Taiwan's membership of the United Nations and called on Taiwan to be
prudent, noting, "If it leads to changing the current situation
one-sidedly, Japan can't support it." The two prime ministers
confirmed that Hu would travel to Japan next spring.

2) Prime Minister Fukuda stresses significance of China visit

YOMIURI (Page 2) (Full)
December 31, 2007

In his four-day visit to China, Prime Minister Yasuo Fukuda was
impressed by the Chinese government's great hospitality and
thoroughgoing preparations.


Fukuda emphasized the significance of his China visit to reporters
yesterday:

"It was an extremely meaningful visit. I was able to carry out
in-depth discussions with Chinese leaders. If Japan and China
cooperate, we will be able to show the strength that the two
countries have. If we don't have cooperative relations, it will be
not good for the rest of the world."

At a dinner party on Dec. 29 hosted by the secretary general of
Shandong Province, Fukuda referred to the visit to Japan by
President Hu Jintao planned for the spring, when the cherry blossoms
are in bloom, proudly stating: "My China visit is a trip to produce
plum blossoms."

The last leg of his tour was the city of Qufu in Shandong Province
where Confucius grew up. Fukuda's visit to the city was realized at
his request. He said: "I would like to confirm that Japan and China
have common interests in our thinking from a long time ago." The
Chinese government hastily removed the barriers that protect the

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cultural assets and cleaned them carefully. They welcomed Fukuda by
showing a native dance.

What surprised everyone was Fukuda and Premier Wen Jiabao playing
catch ball on Dec. 29. In their meeting on the 28, Fukuda told Wen:
"I would like to do so." The Chinese side then offered him the next
day a baseball uniform and cap with the capital letter C. The game
of catch between the two leaders then occurred.

China's preparations for welcoming Fukuda also mean the country has
an iron hand. There is a view in the government and ruling camp that
it would be difficult for the Prime Minister to talk about sensitive
subjects with China after he was so well treated by it.

3) Chinese military planes found to have frequently flown over gas
fields in mid-September, possibly as part of training in preparation
for contingency surrounding Taiwan

ASAHI (Page 1) (Excerpts)
December 31, 2007

Tsuyoshi Nojima, Taipei

SIPDIS

Chinese bombers flew over the Chunxiao (Shirakaba in Japanese) gas
field area in the East China Sea more than 40 times during the
period of only two days this past September, to which Japanese
Self-Defense Forces (SDF) planes scrambled, a Taiwanese military
source revealed. The Japanese government has admitted the fact. This
move by China is seen as part of the Chinese forces strategy to
boost its military activities in the East China Sea

The sea area around the Chunxiao gas field is a disputed area
between Japan and China over marine resources, but it is unclear
whether such Chinese military planes' activities around that area is
related to the dispute. However, it appears certain that that area
is definitely a very important area for the Chinese forces.

The bombers were the Hong 6 (H-6) bombers (H-6) assigned to the
Huaining Air Station, Anhui Province. They flew over that oceanic
area 20 times on Sept. 11 and 23 times on Sept. 12. They were flying
over the Chunxiao gas field.

Japan's Air Defense Identification Zone (ADIZ) covers the west side
of that gas field, so the F-4 fighters assigned to the Naha base
scrambled four times on Sept. 11 and eight times on Sept. 12.
"Japanese and Chinese planes approached within a radius of five
kilometers," the above Taiwanese military source said.

The sea area around the Chunxiao gas field is the sea lane for U.S.
carriers stopping over in Yokosuka and other locations to head for
Taiwan.

4) Prime minister puts collective self-defense on hold, instructing
experts panel to partially amend report

NIKKEI (Page 2) (Excerpts)
December 31, 2007

A panel of experts tasked with looking into the propriety of the use
of the right to collective self-defense has finished their report
and had planned to announce it this fall, but Prime Minister Yasuo
Fukuda has instructed them to partially rewrite the report,

TOKYO 00005690 004 OF 009


according to informed sources. Fukuda said: "There is no need to
urgently study" some of the discussion themes. The panel was pressed
to reconsider the contents of the report and to delay the submission
to early next year or later.

The government's "council for discussing ways to rebuild the legal
framework for national security, chaired by Shinji Yanai, was
launched in April at the instruction of former Prime Minister Shinzo
Abe, who was eager about the challenge to enable the Self-Defense
Force to use the right to collective self-defense. The panel studied
four specific cases, including a case in which Maritime Self-Defense
Force (MSDF) ships provide cover to U.S. Navy vessels under attack
in international waters near Japan. Based on these scenarios, the
panel planned to suggest in its report necessary constitutional
revisions and legal arrangements.

According to several officials concerned and the panel members,
Fukuda has doubts about the use of the right to collective
self-defense in connection with the Japan-U.S. alliance, arguing:
"The panel should not present unrealistic proposals." A panel member
said that the Fukuda remark may be taken to mean that priority
should be given to matters that can be actually initiated (like
future options for the nation's international contributions)."

In deliberations on the bill that would allow the MSDF to resume its
refueling mission in the Indian Ocean, Democratic Party of Japan
President Ichiro Ozawa specified the mission as violating the
Constitution. Some observers take the view that the prime minister
might have feared the negative impact on the Diet deliberations of a
report on collective self-defense, which could lead to a review of
the interpretation of the Constitution.

5) Government and ruling parties to launch effort next month to
draft a permanent law for SDF dispatch overseas that will not need a
UN resolution (Sankei)

SANKEI (Top play) (Excerpts)
December 31, 2007

The government and the ruling parties yesterday adopted a policy
course of starting full-scale efforts from mid-January to draft a
permanent law that would allow at any time the overseas dispatch of
the Self-Defense Forces (SDF). Although it was rumored that the idea
of a permanent dispatch law came out during the two summit meetings
this fall of Prime Minister Fukuda and Democratic Party of Japan
DPJ) President Ozawa, the notion later disappeared. The government
and ruling parties in order for Japan to make a visible contribution
to the international community in the war on terror, judged that
preparing a permanent legal arrangement would be indispensable. The
plan is to speed up the effort to draft a bill immediately after the
antiterrorism special measures bill is passed, and urge the DPJ to
present its own counterproposal.

According to an informed government source, the outlook is that the
permanent dispatch bill will not be limited to cases of the United
Nations having adopted a resolution, and will let the SDF
participate in activities within the scope recognized by
international law.

As the for contents of such activities, consideration will be given
to activities centered on the framework of what the SDF has carried
out until now, including humanitarian assistance in Iraq, refueling

TOKYO 00005690 005 OF 009


operations in the Indian Ocean, and United Nations peacekeeping.

Weapons-use standards will now be the focus of attention for the
bill.

6) Nago now likely to accept proposed length of runways but to
continue calling for shifting relocation site offshore

MAINICHI (Page 2) (Full)
December 31, 2007

Nago City is now studying the possibility of approving the length of
two V-shaped runways (1,600 meters each, a total of 1,800 meters if
the length of an overrun included) proposed in the government's plan
to relocate the U.S. Marine Corps Futenma Air Station in Ginowan
City, Okinawa to Nago. The municipal government, which initially
insisted that the length should be shortened, has begun to show a
positive stance. But both Okinawa and Nago intend to continue
calling on the central government to shift the proposed relocation
site offshore as far as possible.

According to those familiar with negotiations on the Futenma
relocation issue, a senior prefectural government official said
during negotiations to coordinate views with Nago City: "The length
of the runways is one of the basic matters in the plan agreed on
between Japan and the United States. A call for changing the length,
besides a call for moving the relocation site offshore, might be
interpreted as denying the agreed plan from its foundation, so it
will be difficult." In response, Nago Mayor Yoshikazu Shimabukuro
gave the nod. Yet, some citizens in Nago are still calling for
shortening the length.

7) Prime Minister Fukuda to consider shuffling cabinet at beginning
of New Year with eye on Lower House dissolution in summer or after

ASAHI (Top Play) (Full)
December 30, 2007

Takeshi Sato, Jinan (Shandong Province, China)

Prime Minister Yasuo Fukuda, now visiting China, revealed his
intention on the night of Dec. 29 to reporters accompanying him that
he would consider shuffling his cabinet before the regular Diet
session, which is scheduled to be convened on Jan.18. In
consideration of calls for an early shuffle of the cabinet from
within his Liberal Democratic Party (LDP), he told the reporters:

"I want to look into (a cabinet shuffle) after the New Year after
thinking it carefully schedules for next year. Since there are
various views in the party, they are completely right."

He also revealed his intention to dissolve the House of
Representatives to call a general election after the G-8 summit,
which Japan will host next July in Hokkaido.

Following the sudden resignation of Shinzo Abe, Fukuda assumed the
prime minister's post in September. He retained, however, most
ministers Abe had appointed in his cabinet, appointing only two
ministers. Because of this reason, former Prime Minister Yoshiro
Mori and other senior LDP members have called for him to form his
own cabinet before the regular Diet session.


TOKYO 00005690 006 OF 009


After the current extraordinary Diet session is closed on Jan. 15,
the largest opposition Democratic Party of Japan (DPJ or Minshuto)
and the LDP will hold their conventions on the 16th and the 17th.
The ruling parties plan to convene on the 18th the regular session,
which will deliberate the bill on the state budget for fiscal 2008.
If Fukuda shuffles his cabinet, it would be ideal to do so on the
13th or 14th at the end of the extra session. However, if an
override vote on the special measures bill on Japan's refueling
mission is delayed to the end of the ongoing session, it would be
difficult for the Prime Minister to find the right timing for
shuffling his cabinet.

Fukuda, meantime, expressed his intention to dissolve the Lower
House after the July G-8 summit, saying:

"At first we should pass the budget bill. The summit will be held in
the summer. Japan as host country of the summit has to fulfill its
responsibility. Until then, I don't think there will be time to
dissolve the Lower House."

Regarding a bill revising the special taxation measures law,
including a plan temporarily maintaining the gasoline rate, Fukuda
checked to constrain the DPJ, which calls for abolishing the special
measures law, arguing: "It will create a great confusion in gas
stations," if the law expires at the end of next March.

8) Possibility of cabinet shuffle on Jan. 13 or 14, with ruling camp
aiming to complete such during current Diet session (Nikkei)

NIKKEI (Part 1) (Excerpt)
Eve., December 28, 2007

A proposal was floated today within the ruling camp to have a
cabinet shuffling while the current Diet is still in session. It
closes on Jan. 15. The Fukuda Cabinet is a reappointment of almost
all of the members of the previous Abe Cabinet, so the judgment was
made to bring in one with a Fukuda policy imprint prior to the next
Lower House dissolution and general election. Coordination is in the
direction of having the shuffle on Jan. 13 or 14, right after the
Lower House override vote of the Upper House's rejection of the bill
to allow the Maritime Self-Defense Force to resume refueling
operations in the Indian Ocean.

Only four new appointments were made last Sept. 26, when the Fukuda
Cabinet was formed to replace the Abe Cabinet. The remaining 13
members all stayed on. In order o ensure continuity since Prime
Minister Abe had suddenly resigned his post, and because there was
insufficient time, priority was given to being able to deal with the
Diet by such means as having a cabinet who could answer questions in
the session.

The new refueling-mission bill, which has been the main focus of
attention in the current Diet session, is expected to be rejected in
the Upper House by the opposition parties on Jan. 11. After that,
the ruling camp will readopt the bill in the Lower House the same
day, so the final pending issue will be immediately resolved.

9) DPJ to submit bill designed to unify pension programs

TOKYO SHIMBUN (Top Play) (Excerpts)
December 31, 2007


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The Democratic Party of Japan (DPJ) decided yesterday to submit to
the ordinary Diet session next January a bill that would boldly
revamp the nation's pension system. The bill includes measures to
unify various policy plans. It also calls for using all consumption
tax revenues to finance basic pension benefits. The bill is expected
to clear the House of Councillors, where the opposition bloc holds a
majority. With the submission of the bill, the debate between the
ruling and opposition parties on pension system reform, which is now
losing steam in the aftermath of the pension record-keeping fiasco,
is likely to pick up speed again.

The DPJ set forth the drastic reform of the pension system as a key
policy in its manifesto for the July Upper House election.

The bill includes these specific measures: (1) Unify the basic
pension (kokumin nenkin), the public pension (kosei nenkin) and the
mutual pension (kyosai) programs into a new system composed of the
basic pension portion and the earnings related portion; (2) use
consumption tax revenues to finance basic pension payments; (3)
maintain the current level of earnings related payments; (4) limit
benefits for high income-earners.

The party policy platform on tax reform - adopted earlier -
specifies that the current 5 PERCENT consumption tax rate should be
kept unchanged.

Akira Nagatsuma, minister for pension affairs in the "next cabinet,"
will start legislation work early next year.

The main opposition party has crafted a strategy to force the Fukuda
administration into dissolving the House of Representatives for a
snap election at an early date. Keeping this possibility in mind,
the party has judged it necessary to submit the bill in order to
underscore its intension to establish a stable pension system so
that the party will be able to demonstrate its eagerness for pension
reform in the election campaign even if the Lower House is dissolved
during the ordinary Diet session.

10) DPJ includes reflection on grand coalition move in action plan
for 2008

MAINICHI (Page 1) (Full)
December 31, 2007

It was learned yesterday that the main opposition Democratic Party
of Japan (DPJ or Minshuto) incorporated the party's reflection of
the "grand-coalition" issue in a report on its activities in 2007
and in its action plan for 2008, which will be presented at a party
convention on Jan. 16.

DPJ President and Prime Minister Yasuo Fukuda tried to find a way to
form a grand coalition, but a majority in the DPJ rejected it.
Ozawa, however, still advocates a grand-coalition idea, believing
that it would be a shortcut for taking power. Therefore, there
appears a gap between the party's policy and remarks by its head.

The report on the 2007 action plan affirms that the DPJ will topple
the Liberal Democratic Party (LDP) in the next general election of
the House of Representatives and it rejects the notion of a grand
coalition with the LDP. Reflecting the internal uproar over party
head Ozawa's on again off again resignation, the report also notes
that the party deeply reflected on its conduct of making its

TOKYO 00005690 008 OF 009


supporters worry and has learned its lesson.

As if to back up the report, the action plan for 2008 emphasizes the
party's determination to aim at forming a DPJ-led government on its
own effort. Specifically, the plan writes that the party will put
its energies into election measures, including increasing
contributions from individuals, corporations and organizations.

11) Japan aims to conclude international treaty preventing
counterfeit goods by time of G-8 summit in Lake Toya, Hokkaido

SANKEI (Page 2) (Excerpts)
December 31, 2007

The Ministry of Economy, Trade and Industry (METI) yesterday
announced its intention to aim to sign by the time of the Group of
Eight (G-8) summit in Lake Toya, Hokkaido, slated for next July, an
international treaty intended to prevent pirates and counterfeit
goods, which are both proliferating internationally. At present the
World Trade Organization (WTO) under its treaty puts restrictions on
pirated and counterfeit goods, but the treaty lacks any rule to
exercise control over countries exporting counterfeit goods, as well
as effectiveness. It simply serves as a "minimum standard,"
according to METI. Aiming to be able to make a report on the
concluding of a new international treaty (to prevent pirates and
counterfeit goods), METI intends to boost discussion on that
treaty.

The international treaty METI aims to sign is a "treaty for
preventing the proliferation of counterfeit goods and pirates."
During the G-8 summit in 2005 in Gleneagles, Britain, then Prime
Minister Junichiro Koizumi suggested such a treaty. Full-scale
discussion is underway among 12 countries and regions, including,
Japan, the United States, the European Union (EU), Switzerland, and
South Korea.,

The WTO has the restrictions on imitations and pirated goods, but
because the WTO gave the highest priority to the restrictions being
approved by some 150 countries, the restrictions do not impose any
obligations on countries exporting counterfeits. In addition, they
appear questionable in terms of effectiveness, too, because they do
not assume any sales of counterfeits on the Internet.

Japan and the United States drafted a treaty, aiming to have it
signed as swiftly as possible. The draft treaty attaches importance
to preventing counterfeits in the stage of distribution, which is
viewed as a most effective means. The draft obligates both importer
and exporter nations to exercise control over fakes in order to
avoid cases of fakes slipping through the meshes of the treaty at
the water's edge as Chinese companies, which may be the focus of
control, may export counterfeits via third countries in order to
falsify their origin.

Moreover, in some cases fakes and fake brand labels are manufactured
in separate countries, so the draft regulates exports of fake
labels. If such exports are found, criminal punishment will be
imposed.

In order to deal with e-trade of fakes, the draft allows providers
to remove information on fakes to come up for auction, and it also
widely expands the objects of the regulations so that information on
those who bring goods under the hammer will be disclosed.

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DONOVAN

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