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Cablegate: Daily Summary of Japanese Press 01/07/08

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RUCNDT/USMISSION USUN NEW YORK 7677

UNCLAS SECTION 01 OF 15 TOKYO 000035

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: DAILY SUMMARY OF JAPANESE PRESS 01/07/08


INDEX:

(1) Poll on political situation, global warming (Mainichi)

(2) Scope column: LDP's Machimura faction concentrates efforts on
strengthening capabilities by enlisting think-tank for policy
proposals; building network of contacts in U.S., Europe, China;
creating own website; and broadcasting its general meeting live
(Tokyo Shimbun)

(3) Next Lower House election: LDP, DPJ aiming at enemy's strong
constituencies; LDP to place emphasis on organized votes, DPJ on
urban areas (Mainichi)

(4) Eco-war: Japan hard-pressured to come up with measures against
climate change (Asahi)

(5) Farm produce growing areas could change drastically nationwide
due to global warming: Agriculture ministry to speed up studies on
countermeasures; Tangerines go off more quickly while in storage;
Vegetable prices collapse due to concentrated shipment time (Tokyo
Shimbun)

(6) Japan-U.S. defense interests (Part B) (Sentaku)

(7) Next midterm defense buildup plan to be frontloaded (Nikkei)

(8) U.S. nuclear-powered submarines made 48 port calls in Japan in
2007; Okinawa's White Beach most frequently visited (Akahata)

ARTICLES:

(1) Poll on political situation, global warming

MAINICHI (Page 8&9) (Full)
January 6, 2008

Questions & Answers
(T = total; P = previous; M = male; F = female)

Q: It is said that the House of Representatives is highly likely to
be resolved for a general election in 2008. Are you interested in
the next election for the House of Representatives?

T P M F
Very interested 39 48 31
Somewhat interested 43 39 45
Not very interested 11 7 14
Not interested at all 3 3 3

Q: Which political party between the Liberal Democratic Party and
the Democratic Party of Japan (Minshuto) would you like to see win
in the House of Representatives election?

T P M F
LDP 33 31 34
DPJ 46 55 38
Other political parties 13 8 16

Q: In the election for the House of Representatives, 300 persons
will be elected from single-seat constituencies and 180 from 11
proportional representation blocs across the nation. Which one do

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you think is important?

T P M F
Single-seat constituencies 68 74 62
Proportional representation 21 20 21

Q: What do you think is most important when you vote for candidates
in the House of Representatives election?

T P M F
Personal character 15 15 15
Image 3 4 3
Career, actual results 9 8 9
Policy 51 54 49
Their political parties 11 13 9
Request from acquaintances, relatives 2 1 2

Q: What would you like elected politicians to pursue first?

T P M F
Policies for the whole nation 62 64 60
Ties with senior government officials, political party executives 4
4 4
Contribution to home constituencies 27 27 26

Q: Do you think the government has changed in nature with Prime
Minister Shinzo Abe going out and Prime Minister Yasuo Fukuda coming
in?

T P M F
Changed for the better 14 15 12
Changed for the worse 11 14 8
No change 68 67 69

Q: A United Nations conference on global warming was held from Dec.
3 in Bali, Indonesia. Are you interested in the issue of global
warming?

T P M F
Yes 89 92 88
No 4 5 4


Q: What do you think about global warming?

T P M F
I have a strong sense of crisis 33 34 31
I have a vague feeling of anxiety 38 37 39
I believe we can overcome it 21 23 19
It's a natural phenomenon, so we don't have to worry 2 2 2

Q: It is said that global warming will have various effects. What is
the matter of primary concern to you?

T P M F
Midsummer heat 7 7 8
Abnormal climate like a heavy rain 27 26 28
Water, food shortages 29 31 27
Sea level rise 16 19 13
Animal, plant extinction 12 11 12

Q: What do you do to prevent global warming? Pick only one.

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T P M F
Set moderate air conditioning 32 29 34
Turn off TV and lights when unused 22 24 21
Abstain from using a car 9 13 6
Don't ask for plastic shopping bags at stores 16 10 20
Buy energy-saving electric appliances 7 9 5
Do nothing in particular 7 10 4

Q: There is an argument calling for an environmental tax to curtail
greenhouse gas emissions that cause global warming. Do you support
this initiative?

T P M F
Yes 47 51 43
No 42 41 42

Q: The Kyoto Protocol, which sets greenhouse gas reduction goals,
mandates Japan to cut 6 PERCENT of its CO2 emissions from 1990
levels. There is a view saying the people will need to lower their
current standard of living so as to attain the goal. Can you do so?

T P M F
Yes 49 51 48
No 41 42 40

Q: What do you think Japan should do to attain its Kyoto Protocol
CO2 reduction goal?

T P M F
Hold down CO2 emissions even at the sacrifice of economic growth 14
14 13
Subsidize wind- and solar-power generation 41 44 39
Subsidize afforestation 29 28 29
Buy emission credit from foreign countries 3 3 2
No need to attain the goal at any sacrifice 4 4 4

Q: It is said that atomic power generation is effective to prevent
global warming. Do you support the idea of building more atomic
power plants?

T P M F
Yes 39 50 29
No 50 43 56

(Note) Figures shown in percentage, rounded off. "No answer"
omitted.

Polling methodology: The survey was conducted Dec. 15-16 over the
telephone across the nation on a computer-aided random digit
sampling (RDS) basis. Answers were obtained from 1,528 persons.

(2) Scope column: LDP's Machimura faction concentrates efforts on
strengthening capabilities by enlisting think-tank for policy
proposals; building network of contacts in U.S., Europe, China;
creating own website; and broadcasting its general meeting live


TOKYO SHIMBUN (Page 2) (Full)
January 3, 2008

Miyuki Ando

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The Machimura faction, the largest in the ruling Liberal Democratic
Party (LDP), has decided to work on strengthening its policy-making
capability this year. The faction will work together with a
think-thank to come up with policy proposals. It will also send a
delegation to the United States, Europe, and China. With an eye on
the political situation after the next Lower House election, the
faction intends to consolidate its unity and boost its presence in
the party.

In its policy proposals, the subject the faction will ponder most
over will be an economic growth strategy. Japan saw its per capita
gross domestic product (GDP) fall in 2006 and the country is now
ranked 18th in the world. Prime Minister Fukuda, as well, is
troubled that Japan's nominal GDP has stayed flat for the past 10
years. The Machimura faction will draw up a reform plan to use in
order to put the economy, which seems likely to stall again, back on
the growth track.

Because a lack of policy measures for rural areas contributed to the
LDP's suffering a devastating defeat in the last Upper House
election, the faction is placing emphasis on agricultural policy.

On the question of how to manage the Diet, when the ruling bloc
holds a majority in the Lower House and the opposition controls the
Upper House, the faction will compile the results of discussions
conducted since last fall at its policy committee. The Machimura
faction intends to suggest promoting discussions between the ruling
and opposition parties in a pragmatic way by using sub-committees
that are free from the fetters of regular meetings.

The Machimura faction will publicize its proposals and will seek
approval from other policy groups in the party.

The purpose of sending a delegation to the U.S. is to build a
network of contacts with the new U.S. administration that will come
in after the fall presidential election in the fall. Based on the
results of the prime minister's visit to China at the end of last
year, the faction, by sending its delegation to China, will strive
to strengthen cooperation with the Chinese Communist Party. Its
delegation to Europe plans to visit the Royal United Services
Institute for Defense and Security (RUSI).

The Machimura faction will also create its own website and to post
its proposals and the results of its overseas trips. Moreover, it is
considering introducing a system of delivering streaming images and
broadcasting live the general meeting that it holds once a week.

The Machimura faction has produced four prime ministers in
succession, namely, Yoshiro Mori, Junichiro Koizumi, Shinzo Abe, and
Yasuo Fukuda. It has 84 Lower and Upper House members at present and
is glorying in their ascendancy. But this situation will not
continue indefinitely.

The Koga and Tanigaki factions in the LDP have agreed to merge by
this spring. The Yamasaki faction recently invited former Policy
Research Council Chair Nobuteru Ishihara to join the faction.
Ishihara is now a member of the Yamasaki faction. Former Minister of
Economy, Trade and Industry Shoichi Nakagawa of the Ibuki faction
organized a cross-factional study group of conservative lawmakers.

With an eye on when the next Lower House election will occur,

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factions in the LDP are becoming active. The Machimura faction
intends to counter other factions by enhancing its capabilities.

(3) Next Lower House election: LDP, DPJ aiming at enemy's strong
constituencies; LDP to place emphasis on organized votes, DPJ on
urban areas

MAINICHI (Page 5) (Full)
January 5, 2008

A dead heat is expected in the battle between the ruling Liberal
Democratic Party (LDP) and main opposition Democratic Party of Japan
(DPJ or Minshuto) in the next House of Representatives election,
which is expected to occur before the end of the year. The two
parties are desperately trying to implant an awareness of their
being in a war mode into the minds of their members and supporters
by making their senior members stump nationwide. Both parties are
aiming at beating the other party to the punch. The LDP is now
trying to return to its past election strategy of conducting an
organized election. The DPJ is placing importance on gaining support
in urban areas. The two parties are already locked in battle to win
votes in the Lower House election.

The LDP has been on the offensive owing to such issues as the
pension record-keeping fiasco. The fact is that there is little hope
that Prime Minister Yasuo Fukuda will be able to show a "strong
character" that the party could use to gain support from
unaffiliated voters in the next Lower House election. The LDP will
be forced to carry out a defensive election in the next Lower House
race, in contrast to the 2005 election in which the party won a
landslide victory. Under such circumstances, the LDP has called on
its members to conduct an organization-based election of the kind it
used to carry out.

Election Committee Chairman Makoto Koga spent much time stumping
nationwide until the end of last year because of the party's
crushing defeat in the 2007 House of Councillors election when
voters in the regions distanced themselves from the LDP. He attached
special importance to maintaining a dialogue with
construction-related associations, paving the way for a drive to
increase the number of party members, centering the effort on
industrial associations. This will also lead to a strategy of
crushing the DPJ's policy stances. Consideration for local areas was
pronounced in a draft national budget for fiscal 2008 that the
ruling camp approved late last year. The tactic is to give priority
to incorporating policies which the LDP thinks will be able to win
the election.

Against the background of criticism that structural reforms have
lost their effectiveness, the LDP increased grants to local
governments for the first time in three years. It also placed
emphasis on the allocation of budget money to agricultural areas.
The LDP apparently intended to prevent the differences in major
policies between it and the DPJ that showed up in the 2007 Upper
House election from coming to the fore.

Regarding the criterion of selecting candidates, the LDP abolished
in principle the slot for woman candidates to run in the
proportional representation segment introduced in 2005. It also
urged some of the so-called "Koizumi children," who were elected in
the 2005 Lower House election from the proportional representation
segment, to run in single-seat constituencies. It aims to increase

TOKYO 00000035 006 OF 015


the number of votes to be gained by creating a sense of alarm among
candidates.

The DPJ, however, has adopted a strategy that would allow it to grab
the reins of government in one election. Taking a serious view of
its defeat in urban areas in the 2005 Upper House election, the
party has come up with a strategy of focusing on urban areas in the
next Lower House race, slightly correcting its policy of placing
importance on rural areas that it used in the 2007 election.

At a press conference last December, Ozawa underscored:

"Gaps have grown between the urban and local areas. There is also a
growing gap in incomes and employment in the urban areas. This will
become a major issue in the Lower House election"

Lower House elections differ from those of the Upper House, in which
the number of single seats up for grabs determines whether the party
will win or lose. Ozawa's remarks indicate that expanding support in
the urban areas which have many seats is the key to win the race.

The DPJ, however, is facing a challenge in the urban areas. Due to
the aftereffects of the landslide defeat in the 2005 Lower House
polls, there remain many single-seat constituencies in which the DPJ
has been unable to field candidates. Although Ozawa took the
initiative in coordinating, he failed to resolve the situation.

The DPJ is having trouble cooperating with the Social Democratic
Party and People's New Party in 25 to 30 constituencies in the
election. It had planned to end coordination bye the end of last
year, but there is no electoral district in which the DPJ has agreed
with the SDP and PNP on election cooperation.

(4) Eco-war: Japan hard-pressured to come up with measures against
climate change

ASAHI (Page 3) (Abridged)
January 6, 2008

Shinnji Inada and Naoki Shoji

Climate change will be addressed as a major subject in the Group of
Eight (G-8) summit conference in Lake Toya, Hokkaido, slated for
this summer. In the 13th Conference of the Parties (COP13) to the
United Nations Framework Convention on Climate Change (UNFCCC) in
Bali, Indonesia in December, Japan was severely criticized for its
irresolute attitude. In his New Year's press conference, Prime
Minister Fukuda declared that he would attach importance to the
environmental problem as well as reform of the pension system. Can
Japan redress its bad reputation heard in Bali?

Prime Minister Fukuda follows his predecessor-developed "Cool Earth
50"

The Fukuda administration has been since the beginning of the year
demonstrating its proactive stance toward the environmental issue.
The basis for his approach against global warming is "Cool Earth
50," a long-term vision hammered out by his predecessor Abe
administration.

At one point Japan appeared to move forward under its slogan "Cool
Earth," but its measures against climate change have been drifting

TOKYO 00000035 007 OF 015


now, being put behind the question of whether to resume the
Self-Defense Forces' (SDF) refueling mission in the Indian Ocean and
the defense interests-related scandal.

In Japan, business leaders and the Ministry of Economy, Trade and
Industry (METI) are opposing any idea to put a strict limit to
corporate activities. METI's rollback began at the end of last
November at a meeting of a joint session between the Ministry of
Environment (MOE) and METI, where both ministries discussed a
domestic-emissions trading system and a green tax.

Attention was paid to which of the two ministries would assume the
role of summing up the session after the discussion. The two
ministries are wide apart (over measures against climate change), so
which of the two would play that role could have suggested a
direction Japan would head for in dealing with global warming. It
was MOE's turn to sum up the discussion, but METI strongly asked MOE
to change places. As a result, both ministries decided, though
unusually, to sum up the discussion together. Tohoku University
Prof. Junsen Asuka, who attended the session, noted: "At a time when
the decision was made that both ministries would sum up the session
together, I thought Japan decided to put off a conclusion (about its
measures against climate change)."

The confrontation between the two ministries also affects Japan's
diplomatic strategy. Prior to the COP13 conference in Bali in
December, relevant ministries and agencies formed Japan's policy
line to deal with the post-Kyoto Protocol age.

A proposal Japan submitted to the Climate Change Secretariat gives
the highest priority to establishing a working group which major
emitters of greenhouse gases take part in. The proposal makes it
ambiguous, however, what Japan would do to reduce the total
emissions of carbon dioxide (CO2), an aspect that has encountered
strong opposition from economic circles. A senior MOE official said,
"High on agenda in the Bali conference was a roadmap, so whatever
was written in the proposal other than that would not be discussed."
A senior Foreign Ministry official made this comment: "At a time
when we are making efforts to bring the United States and China,
which do not like setting numerical targets, into the discussions,
it is not a good idea for Japan to mention numerical targets." A
head-on confrontation between MOE and METI was avoided thanks to
various concessions and speculations. In the meantime, there was no
sign that the Prime Minister's Official Resident (Kantei) had
intervened to come up with a proposal overcoming ministerial
interests.

Business leaders are also making requests about climate change. In
early December, the Japan Business Federation's (Nippon Keidanren)
Chairman Fujio Mitarai met with Environment Minister Kamoshita and
others before they headed for Bali and warned them: "If irrational
restrictions on the total emission of greenhouse gases are set like
the Kyoto Protocol did, Japan would be certain to suffer a weakening
of its international competitiveness."

At the Bali conference, Japan's proposal came under criticism more
than expected because of its vagueness. Environmental
non-governmental organizations reacted sensitively to Japan's move
with one NGO member arguing, "Japan, which produced the Kyoto
Protocol featured by setting total reductions of greenhouse gases
country by country, is now going to throw away the protocol."


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Hironori Hamanaka, chair of the Institute for Global Environmental
Strategies' Board of Directors who had been involved in global
warming negotiations for many years, sensed the mood of the Bali
conference by saying: "I think it has become considerably difficult
for Japan to restore its image."

Setting numerical targets imperative for Japan after suffering "Bali
shock"

Coming under heavy fire in the Bali conference, Japan turned around
its previous position suddenly at the end of December.

On Dec. 27, a meeting of four cabinet members was held to discuss
Japan's international strategy against climate change. Prime
Minister Fukuda plans to attend the World Economic Forum in Davos,
Switzerland, slated for late January and address the forum about
Japan's basic position toward the G-8 summit in Lake Toya.

In the cabinet ministerial session, Environment Minister Kamoshita
held up an English language daily issued in Indonesia. The daily
carried the big pictures of the faces of Prime Minister Fukuda, U.S.
President Bush, and Canadian Prime Minister Harper with the caption
reading, "No targets -- Just global disaster coming soon. The world
should not give in." This was a full-page ad placed by an
environmental NGO.

"Japan is regarded by the rest of the world as a force of
resistance, but is this all right?" asked Kamoshita. In response,
Chief Cabinet Secretary Machimura suggested, "How about setting
Japan's numerical targets for cutting emissions of greenhouse
gases?" Machimura was given support from Foreign Minister Koumura.
METI Minister Amari, who was reluctant to set numerical targets,
left the conference room without making his position clear.

The Kantei then came round to the thinking that Japan should work
out its mid-term goal. Around then, Fukuda appointed former Nippon
Keidanren Chairman Hiroshi Okuda, advisor to Toyota Motor, as a
special advisor to the Cabinet, anticipating Okuda would play the
role of urging other business leaders to change their minds.

Meanwhile, the major opposition Democratic Party of Japan (DPJ)
began preparations to send its President Ozawa to the World Economic
Forum and display its measures against climate change to world
leaders. The DPJ is ready to put forward a bill intended to set up a
headquarters to deal with global warming shortly and present a bill
aimed at establishing a domestic emissions trading system. Its
Deputy Policy Research Council Chairman Tetsuro Fukuyama said, "Now
is the right opportunity for us to make (the environmental issue) a
campaign issue in the next general election." The DPJ's offensive is
also irritating the government and the ruling parties.

On Jan. 4, Fukuda held his New Year press conference, in which he
described the global warming issue as a "task that can't wait."

The cabinet made a sudden about-face and began emphasizing the
environmental issue. This has perplexed government officials with
one high-level official noting: "If the cabinet sets an unattainable
target as a result of being overly conscious of climate change, it
could assume a risk in the upcoming G-8 summit."

(5) Farm produce growing areas could change drastically nationwide
due to global warming: Agriculture ministry to speed up studies on

TOKYO 00000035 009 OF 015


countermeasures; Tangerines go off more quickly while in storage;
Vegetable prices collapse due to concentrated shipment time

TOKYO SHIMBUN (Page 3) (Full)
January 7, 2008

The National Agriculture & Food Research Organization (NARO located
in Tsukuba City, Ibaraki Prefecture) conducted a nationwide survey
from 2003 through 2005 on the impact of global warming on fruit,
vegetable and rice farming in Japan. The survey confirmed poor color
development of grapes and apples and a decline in rice quality
nationwide.

The opinion survey was conducted to sample views of public
agricultural research organs throughout the nation on the impact of
global warming.

Respondents in all of 47 prefectures answered that there are
experiencing the impact of global warming in terms of growth and
development, crop yields, quality, or pests and diseases. Global
warming affected vegetables, flowers and ornamental plants in 90
PERCENT of the prefectures and rice in 70 PERCENT of the
prefectures.

Regarding a major impact on fruits, Toshihiko Sugiura, senior
researcher at NARO, said, "Unlike vegetables and rice, which are
planted each year, fruits are harvested from the same trees for many
years, It is, therefore, not possible to adjust the time for
planting. Coming up with measures for fruit cultivation is of urgent
necessity."

As concrete effects of global warming, the survey respondents cited
increased cases of poor color development of apples, grapes and
tangerines, which is ascribable to higher night temperatures,
sunburn caused by high temperature on the surface of fruits and the
softening of fruits due to overriping.

Respondents also cited an increased case of vegetables and fruits
budding and flowering earlier and suffering from damage of frost
caused by the recurrence of cold. It is also noteworthy that pear
trees are not leafing out or flowering in the spring, because they
were not exposed to low temperatures in the winter because of the
warm weather.

Shizuoka Prefecture, a tangerine-producing area, has adopted a sales
strategy of shipping tangerines for a long period of time from the
turn of the year through March, by storing harvested products.
However, the quality of stored tangerines reportedly deteriorates
more quickly than before due to global warming. The early ripening
phenomenon seen among vegetables is affecting the sales of the
products, disabling a relay shipment system of each production area
staggering the time for shipments. As a result, concentrated
shipments are reportedly collapsing shipments. There is also a
vacuum period when there are no products on store shelves.

As cases of the impact of global warming on rice farming, there are
white immature grains with deteriorated quality and split grains.
Both grains are the results of excessively high temperature when
ears of rice plants grow. Though causal correlation has yet to be
proved, there is an increase in spotted rice grains with ears of
rice eaten by increased number of shield bugs.


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The Ministry of Agriculture, Forestry and Fisheries (MAFF) also
carried out as of last year a survey of prefectures on the impact of
global warming on agriculture and obtained similar results.

MAFF also ran a simulation on the moving of areas suitable for fruit
cultivation according to the advancing of global warming. According
to the simulation, areas suitable for growing apples and mandarin
oranges would move north. Temperatures in areas that are currently
suitable for growing those fruits would rise too high, changing the
map of major growing areas. The MAFF simulation also projected that
if national average temperature goes up 3 degrees centigrade in the
2060s, harvest yields of rice in Hokkaido would increase 13 PERCENT
, while those in areas south of the Tohoku region would drop by
between 8 PERCENT -15 PERCENT .

Following such survey results, MAFF will map out measures to deal
with impacts that are seen now. At the same time, it intends to
release a policy of strengthening studies on mid- to long-term
measures with the aim of giving a boost to efforts to accelerate
global warming preventive measures.

(6) Japan-U.S. defense interests (Part B)

SENTAKU (Pp. 110-113) (Almost full)
January 2008 issue

Kyuma's betrayal over Futenma replacement facility

As seen in the case of Armitage Associates, Yamada Corp.'s Miyazaki
made tremendous efforts to build his channels of communication to
U.S. lobbyists. Miyazaki frequently traveled to the United States to
have business lunches with several lobbyists. Meanwhile, Miyazaki's
friend, Naoki Akiyama, a director of the Japan-U.S. Center for Peace
and Cultural Exchange, also successfully gained access to some U.S.
Representatives and Senators. His connections also turned into
Miyazaki's ammunition. Needless to say that in order for Yamada to
become General Electric's exclusive agency and gain intimate access
to the then Defense Agency by beating other giant corporations, it
needed every connection to influential U.S. figures it could get.

Last fall, a group of ten prosecutors and administrative officials
from the special investigation squad of the Tokyo District Public
Prosecutors Office flew to Okinawa on a special mission. Their aim
was to look into the project to build a replacement facility for
Futenma Air Station in which it had been decided that the relocation
site would be along the coast in the Henoko district of Nago City.
The project, having attracted the attention of political and
business circles in Japan and the U.S., has now become a carbon copy
of the "Guam interests" model.

In 1996 during the administration of Prime Minister Hashimoto, Tokyo
and Washington reached an agreement to return Futenma Air Station to
Japan. The event was lauded as the greatest achievement since the
reversion of Okinawa. In 1997, the government drew up a plan to
construct as Futenma's replacement facility a heliport at Camp
Schwab with a 1,300-meter runway.

Recalling those days, a source connected with the Defense Ministry
said: "Around that time, general contractors and trading companies
vied fiercely to join the project, making contacts with defense
officials." Because major steel companies, shipbuilders, and general
contractors in Tokyo, such as Nippon Steel Corp., came forward, and

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Nissho Iwai Corp. (currently Sojitz) served as the coordinator, many
local companies reacted fiercely, saying, "Are the Tokyo-based firms
going to monopolize interests in Okinawa?"

At that point, Bechtel stepped in. Bechtel wanted to be the company
to build an airport on reclaimed land off Camp Schwab by teaming
with up with Kokuba Gumi Co., Okinawa's largest construction
company, and enlisting the general trading house Itochu to serve as
the coordinator. Bechtel secretly prepared an airport development
plan in 1998. Two runways were shown on the plan combining an aerial
photograph with computer graphics. It was a prototype of the
V-shaped pair of runways.

An Okinawa prefectural assemblyman noted:

"When Bechtel held a briefing session for Okinawa assemblymen,
former Secretary of Defense William Perry also came all the way to
promote the Bechtel plan. That really surprised us. Because the
reclaimed land plan would benefit local gravel suppliers, the
Okinawa side, including Governor Keiichi Inamine, started calling
for reclamation."

After many twists and turns, then Vice Defense Minister Moriya in
2005 introduced a ground-based plan. The design would have the
runway built at Camp Schwab.

A Defense Ministry source explained:

"Building a runway at Camp Schwab would not benefit Bechtel very
much, so the U.S. side fiercely opposed it. In the end, an agreement
was reached to reclaim land off Camp Schwab."

In 2006, Mayor Yoshikazu Shimabukuro of Nago, the relocation site
for Futenma Air Station, and Higashi Kaihatsu and other local
businesses poured cold water on the government's Camp Schwab coastal
plan, coming up with an offshore plan to build runways two
kilometers off the coast.

A local assembly man said:

"Realizing the loss of steam of the Keiseikai in the Liberal
Democratic Party under the Koizumi administration, local business
circles after much thought made huge donations to LDP lawmaker Taku
Yamasaki, a defense policy specialist, in the hope that he would
apply pressure on his close friend, Prime Minister Koizumi."

But their plan fell through, and the government eventually adopted a
plan to build a V-shaped pair of runways based on the coastal plan.

The local assemblyman also added:

"But in January 2007, Defense Minister Kyuma raised an objection to
the government plan, saying, 'I think building a single runway will
suffice.' Kyuma thus began siding with local business circles that
were fixated on the offshore plan. Extremely irritated by Kyuma's
attitude, Moriya who wanted to steamroll the government plan ordered
the Intelligence Service Command to uncover Kyuma's secret meeting
with local business leaders."

"Do not add fuel to the Yamada scandal"

Kyuma stands at the head of defense interests associated with U.S.

TOKYO 00000035 012 OF 015


force realignment. Under his wing are local assemblymen, as
exemplified by House of Representatives member Mikio Shimoji. They
have been scurrying around trying to bring those interests to
Okinawa.

In early November 2007, shortly before Motonobu Miyazaki was
arrested, U.S. Secretary of Dense Robert Gates visited Japan to urge
Prime Minister Yasuo Fukuda and government leaders to swiftly resume
Japan's refueling operation in the Indian Ocean and implement the
U.S. force realignment plan. Showing up at a Tokyo hotel around the
same timeframe was former Defense Secretary William Cohen and
defense adviser William Schneider. They attended the Japan-US
Security Strategy Conference, chaired by Naoki Akiyama. The
conference also brought together executives of major defense
companies, such as Mitsubishi Heavy Industries, Boeing, and
Lockheed.

Former Defense Minister Kyuma also delivered a videotaped message
underlining the need to discuss essential defense issues without
being bound by trivial matters. The gathering of Japanese and U.S.
defense officials at that particular timeframe was not coincidental
but to send a clear message to Japanese prosecutors not to add fuel
to the Yamada scandal.

The Lockheed scandal, which was originally a bribery case over
defense interests over the P3C antisubmarine patrol aircraft, was
replaced by interests over ANA commercial planes. The
Douglas-Grumman scandal came to a deadlock before sticking the knife
into Nissho Iwai and the defense industry. The U.S. defense industry
is untouchable, and any attempt to touch it would result in the
arrest of even prime minister on trumped up charges. The expiration
of the tenure of Hiroaki Yagi as chief of the special investigation
squad is approaching. Even the Lockheed scandal failed to shed light
on the dark side of Japan-U.S. defense interests. The road ahead is
fairly steep.

(7) Next midterm defense buildup plan to be frontloaded

NIKKEI (Page 2) (Full)
January 6, 2008

The government and ruling parties are looking into the feasibility
of discontinuing Japan's current midterm defense buildup plan in its
final fiscal year to frontload the next-term defense buildup plan
one year earlier than scheduled. The current midterm defense buildup
plan is set for a period of five fiscal years up to 2009. However,
the Defense Ministry was involved in scandals over its procurement
of equipment for the Self-Defense Forces. The government and ruling
coalition judged that such events marred the current midterm defense
buildup plan's reliability. The government, now reviewing the
Defense Ministry's procurement system, will set about working out
the new defense buildup plan at an early date. The government was
expected to decide under the current plan to introduce the follow-on
mainstay fighter plane (FX) model for the Air Self-Defense Force. FX
introduction will be rescheduled under the next-term defense buildup
plan.

A midterm defense buildup plan caps Japan's defense spending for a
period of five fiscal years, and it specifies procurement plans for
each new five-year period. This planning formula was introduced in
fiscal 1986. Each midterm defense buildup plan is based on the
National Defense Program Guidelines (NDPG), which was formerly known

TOKYO 00000035 013 OF 015


as the National Defense Program Outline or NDPO for short.

The current midterm defense buildup plan (for fiscal 2005-2009) was
adopted in a cabinet decision of December 2004. Its spending totals
approximately 24.24 trillion yen, incorporating a plan to introduce
a missile defense (MD) system, such as enhancing the capability of
Aegis-equipped ships, and a plan to introduce the FX model.

The midterm defense buildup planning formula is also meant to
ratchet defense spending. Last year, however, a defense contractor's
bill-padding practices were brought to light. On Jan. 4, Akihiro
Ota, who heads New Komeito, the ruling Liberal Democratic Party's
coalition partner, said the government should basically abolish
occasional contracts. In addition, Ota also suggested the need for
the government to check defense contractors' overestimates.

The government set up a panel at the prime minister's office for an
overhaul of the Defense Ministry. This panel is studying a new
procurement system, including the option of making a package
purchase of defense equipment. "It's a consensus of the government
and the ruling parties to have an improvement plan reflected in the
next-term defense buildup plan," a senior Defense Ministry official
said yesterday.

The panel will come up with an interim report in February. Based on
the interim report, the Defense Ministry will create the next-term
defense buildup plan for fiscal 2009-2013, starting in April. The
government is expected to make a cabinet decision in December this
year to adopt the new midterm defense buildup plan. The government
will likely retrench the new defense buildup plan's total cost in an
aim to emphasize a reform of the Defense Ministry.

The Ground Self-Defense Force looked to introduce the AH-64D Apache
as its mainstay combat helicopter model. However, the United States
has now discontinued its production. The Defense Ministry will
therefore have to reduce the number of new choppers to be procured
for the GSDF under the current midterm defense buildup plan. This is
also one of the reasons why the new defense buildup plan will be
moved up one year earlier than scheduled.

Meanwhile, the ASDF currently has about 90 F-4 fighter planes. These
ASDF F-4 fighters, however, are now superannuated. The Defense
Ministry has plans to replace the F-4s with the FX model. The
current midterm defense buildup plan specifies a plan to introduce
the first seven FX-model jets. The ASDF is interested in the F-22
Raptor, a U.S.-developed state-of-the-art stealth fighter jet model,
as a likely FX candidate. However, the United States embargoes the
F-22. The Defense Ministry's FX selection is therefore facing rough
going.

The Defense Ministry will now push back FX introduction under the
next-term defense buildup plan. Instead, the Defense Ministry would
like to introduce more than seven FX-model fighters under the
next-term defense buildup plan. This FX introduction will likely be
controversial in connection with financial circumstances.

(8) U.S. nuclear-powered submarines made 48 port calls in Japan in
2007; Okinawa's White Beach most frequently visited

AKAHATA (Page 4) (Full)
January 6, 2008


TOKYO 00000035 014 OF 015


In 2007, 12 U.S. Navy attack nuclear-powered submarines made 48
calls at Japanese ports in 2007, according to statistics by local
governments hosting such ports. Above all, White Beach in the city
of Uruma in Okinawa Prefecture topped the list with a record 24 port
calls (an increase of eight from the year 2006). The number of calls
at the Yokosuka base in Kanagawa prefecture dropped by one from the
year 2006 to 13 calls, and the Sabebo base in Nagasaki Prefecture
also dipped by five to 11 visits. Although the number of ships
declined by four as a whole, the number of calls increased by two,
hovering around the 50 level over the last several years.

In September 2006, radiation was detected in waters off Yokosuka as
the USS Honolulu left the port, resulting in a serious problem. It
was also found in October 2007 that the USS Hampton that entered
Yokosuka and White Beach had faked data to conceal the fact that it
failed to conduct a daily examination of radioactive substances for
a month during its seven-month western Pacific cruise, exposing its
extremely sloppy safety management.

It has also become clear through a declassified U.S. government
document obtained by international affairs researcher Shoji Niihara
that the governments of Japan and the United States concluded a
secret pact in 1971 not to monitor radioactive contamination in the

SIPDIS
air within 50 meters of U.S. Navy nuclear-powered submarines when
they enter Japanese ports.

Planning to deploy the nuclear-powered aircraft carrier George
Washington to Yokosuka in 2008, the U.S. government and the U.S.
Navy have played up the safety of nuclear-powered ships. But their
assertion has now been proven groundless.

The bow of the nuclear-powered Newport News also hit Kawasaki Kisen
Co.'s oil tanker Mogamigawa in the Strait of Hormuz in the Arabian
Sea in January 2007.

The move to realize the U.S. Defense Department's strategy
(Quadrennial Defense Review established in February 2006) of
deploying 60 PERCENT of the U.S. submarines in the Pacific for
securing its interests progressed smoothly in 2007, and Japan is now
an important base for it.

The Seawolf class attack nuclear-powered submarines Seawolf and the
Connecticut were transferred from the Atlantic Fleet to the Pacific
Fleet in 2007. The Connecticut that entered a Japanese port in
November took part in a large joint exercise with the Maritime
Self-Defense Force. The Hampton has also been assigned from the
Atlantic Fleet to the Pacific Fleet. The Atlantic Fleet-based
Providence has also repeatedly made port calls in Japan.

In many cases, U.S. submarines visited Sasebo and White Beach for
less than one hour, and that trend continued in 2007 as well. In
fact, of the 10 calls at Sasebo, five calls lasted less than one
hour (additionally, one visit marked 71 minutes) and of the 24 calls
at White Beach, 17 were shorter than one hour.

Duties of U.S. attack nuclear-powered submarines include ground
attacks with cruise missiles, antisubmarine and anti-surface
warfare, injecting and collecting special operations troops,
intelligence, surveillance, and reconnaissance activities. U.S.
submarines seem to make short port calls to transport special
operations troops and reconnaissance units and transmitting
monitored signals, in addition to replenishing supplies.

TOKYO 00000035 015 OF 015

DONOVAN

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