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

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #0054/01 0080802
ZNR UUUUU ZZH
P 080802Z JAN 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 0806
INFO RUEKJCS/SECDEF WASHDC PRIORITY
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RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 7739
RUEHFK/AMCONSUL FUKUOKA 5344
RUEHOK/AMCONSUL OSAKA KOBE 9009
RUEHNAG/AMCONSUL NAGOYA 4032
RUEHKSO/AMCONSUL SAPPORO 5961
RUEHBJ/AMEMBASSY BEIJING 0975
RUEHUL/AMEMBASSY SEOUL 7043
RUCNDT/USMISSION USUN NEW YORK 7703

UNCLAS SECTION 01 OF 06 TOKYO 000054

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,
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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 01/08/08


INDEX:

(1) Defense Ministry plans three-fold more quarters for visitors at
Tsuiki base (Akahata)

SIPDIS

(2) Mitsubishi Heavy Industries to cut launch cost for H2A to the
same level as those for U.S. and European rockets (Nikkei)

(3) Fukuda administration's key persons: Koga, Tanigaki, Aso fail to
depict strategy for post-Fukuda (Nikkei)

(4) Editorial: Thoughts on the "China problem" at the beginning of
the year (Tokyo Shimbun)

ARTICLES:

(1) Defense Ministry plans three-fold more quarters for visitors at
Tsuiki base

SIPDIS

AKAHATA (Page 2) (Full)
January 8, 2008

Japan and the United States are now realigning the U.S. military
presence in Japan. Along with this move, the two countries carried
out joint combat training exercises in March and June last year at
the Air Self-Defense Force's Tsuiki base in Fukuoka Prefecture.
Meanwhile, the Defense Ministry revealed a plan yesterday to rebuild
more quarters for "visitors" at the base. The plan came out
yesterday in a Diet reply to a question asked by Seiken Akamine, a
House of Representatives member of the Japanese Communist Party.

The ASDF's Tsuiki base currently has four billets for ASDF
personnel. House 3, one of the four billets, was built in 1989 and
has rooms for 40 guests. According to the Defense Ministry's
explanation, House 3 will provide additional rooms for 20 more
guests. In addition, the Defense Ministry plans to rebuild Barracks
1 because it is old. Barracks 1, after it is rebuilt, will have 70
more guest rooms (for 50 men and 20 women). Accordingly, the base
quarters will have rooms for a total of 130 guests.

The Defense Ministry has already earmarked 1 billion yen in its
budget estimate for next fiscal year. The new quarters will be built
at the end of fiscal 2010. The ministry says the Tsuiki base houses
400-500 ASDF members at its quarters.

Late last year, the JCP's Fukuoka Prefectural Committee held a
meeting with the Defense Ministry. On that occasion, the Defense
Ministry declared that the ASDF could conduct training at the Tsuiki
base for the U.S. military's emergency use of the base, in addition
to bilateral joint training exercises. In addition, the Defense
Ministry plans to expand the Tsuiki base with an extended taxiway
and more fuel tanks. This plan was brought to light in November last
year. Faced with local objections, the Defense Ministry has
withdrawn its budget request for a base expansion survey.

The Defense Ministry says the base expansion plan has nothing to do
with U.S. military training. The ministry also says it will not
withdraw the base expansion plan. The billet rebuilding plan, as
well as the base expansion plan, is tantamount to a full-fledged
base buildup for the U.S. military's realignment.

(2) Mitsubishi Heavy Industries to cut launch cost for H2A to the

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same level as those for U.S. and European rockets

NIKKEI (Page 1) (Full)
January 7, 2008

Mitsubishi Heavy Industries will cut the launch cost for Japan's
leading rocket, the H2A, which is used to launch satellites, by 30
PERCENT to 7 billion yen by 2009 so that the price will be almost
the same set by launching firms in the United States and Europe.
Mitsubishi also will drastically revise its management system, such
as developing rocket control programs, and shorten the period for
delivery from the receipt of orders to the launching of the rocket
to one year or two-thirds of the current delivery time. Arming
itself with the competitive price and delivery time to counter rival
American and European firms, Mitsubishi aims to enter the business
of launching commercial satellites.

Demand for the launch of commercial satellites in the world is 20 on
an annual basis. Nearly half such satellites are launched by
Arianspace SA, followed by Russia's Khrunichev and America's Sea
Launch. Last spring Mitsubishi took over the H2A rocket business
from the government. When it comes to how many satellites Mitsubishi
has launched, the company launched two of the government's
satellites in fiscal 2007, and it only plans to launch one satellite
in fiscal 2008.

In order to make the launch business payable, Mitsubishi thinks it
is necessary to launch at least three rockets annually. It is
therefore indispensable for the company to enter the market for
launching commercial satellites for telecommunications or
broadcasting.

It is essential for Mitsubishi to review the past program
development process and the production and inspection systems so as
to reduce the launch cost and shorten the delivery time. As for
control programs, including flight paths, which have been previously
created every rocket launch, Mitsubishi will adopt a system to
re-use the past control programs that were successful by adding
adjustments to them. By so doing, the company will shorten the
period of creating such programs to three months, one-third of the
previous time.

Mitsubishi produced fuselages at its Tobishima Factory at Tobishima
Village in Aichi Prefecture on a made-to-order basis, but it will
shift to an anticipated production system. By front-loading the
production of a maximum of five fuselages per year, the company will
shorten the delivery time to one year so that it can launch the
rocket four to five times annually.

In the past Mitsubishi has inspected the fuselage both at the
Tobishima Factory and the Tanegashima Space Center (TSC) in
Kagoshima Prefecture, from which a satellite is launched, but it
will intensively inspect it at the TSC in the future. As for the
maintenance of the launching site, which Mitsubishi has been charged
with, negotiations are underway on such plans as having Mitsubishi
repair the launching site soon after the launch, but entrusting the
regular maintenance of the launching site to government hands.
Negotiations also are proceeding on a plan for the government to buy
flight data to make best use of them for national-level research.

If all those steps are taken, the current launch cost of 10 billion
yen could be reduced to 7 billion yen or so. In addition it would

TOKYO 00000054 003 OF 006


become easy to meet satellite companies' requested time for the
launch. Mitsubishi aims to receive orders for launching commercial
satellites during the period from January to March of 2009.

The launching price set by the largest launch company, Arianespace,
is 6-7 billion yen. In terms of the delivery time from receiving
orders to the launch, Mitsubishi's H2A will have an advantage over
the launch rocket by Khrunichev and that by Sea Launch. Mitsubishi
will counter its rivals by enhancing its competitiveness in terms of
the launch price and the delivery time.

(3) Fukuda administration's key persons: Koga, Tanigaki, Aso fail to
depict strategy for post-Fukuda

NIKKEI (Page 2) (Full)
January 8, 2008

Prime Minister Yasuo Fukuda delivered a speech on January 7, the
first day of work this year for the ruling Liberal Democratic Party
(LDP). Policy Research Council Chairman Sadakazu Tanigaki and
Election Committee Chairman Makoto Koga also attended the session.
Tanigaki was nodding sometimes while listening to Fukuda's speech
and Koga was listening to his speech with his eyes shut
occasionally. The Koga and Tanigaki factions, which were derived
from Kochikai (the former Miyazawa faction), will be merged into one
faction as early as April. It will be seven years since Kochikai
broke up. They are eyeing the political situation, including a
possible race to succeed Fukuda after the next House of
Representatives election.

Koga visited shrines in Omuta City, Fukuoka Prefecture, at the
beginning of the New Year. When asked about the timing for Lower
House dissolution to call for a snap election, he responded: "It is
desirable that such occurs next fall when the terms of Lower House
members expire." He indicated in his remarks that as the official
responsible for elections, he felt anguish. But he had not forgotten
his pride as a member of the conservative mainstream when he
stressed in a meeting in Hirokawa Town, Fukuoka: "We want to gain
power to stay in the inner sanctum of government."

In a meeting on Jan. 6 held by the LDP in Kyoto City, Tanigaki
called for support for the party-backed candidate running for the
February Kyoto mayoral election. After that, he underscored: "We
will do our best to break through Japan's political stalemate when
the time comes. We will experience a great political battle this
year." He stored up his energy by riding his bicycle over the
year-end and New Year's holidays.

Tanigaki has been unable to show his political presence in the tax
and fiscal policy debates and on the hepatitis problem, falling
under the shadow of Kaoru Yosano, former chief cabinet secretary. He
has obtained the Policy Research Council chairmanship, but his
methodical strategy has created the impression of his being
indecisive. There is no surge in party momentum to support him to
succeed Fukuda. A senior Koga faction member said:

"A prior condition for the unification of the two factions was to
have Tanigaki become prime minister and Koga assume the post of
Lower House speaker. But I now don't know whether Tanigaki will
become prime minister."

Taro Aso, who heads one of the LDP factions, held a morale-boosting

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rally in Iizuka City, Fukuoka Prefecture. He stated: "A man faces
challenges many times. It is not good for him to give up his
ambition even if he was defeated." Appearing on the NHK program
"Speak in English," he said: "I went once to a Meido (Japanese
phonetic for maid) cafe, where the service staff members dress as
elegant maids." He enjoys widespread popularity among the masses. He
is described in web sites as a politician who can understand the
public.

Aso's basic strategy is to keep a reasonable stance from the Fukuda
administration. He cooperates with Shoichi Nakagawa, who has
distanced himself from Fukuda, while expressing his support for the
prime minister. What is difficult for him now is to know when the
right time is for challenging Fukuda. If the ruling coalition fails
to hold a majority in the Lower House election, it will fall into
the opposition camp. But if the Fukuda government lasts a long time,
the chance for Aso to succeed Fukuda will slip away. A senior Aso
faction member quipped: "I am concerned about whether Aso's
popularity will end."

(4) Editorial: Thoughts on the "China problem" at the beginning of
the year

TOKYO SHIMBUN (Page 5) (Full)
January 8, 2008

Beijing will host the Olympic Games this summer. It is expected to
be an event symbolizing China's rise. But saddled with many
problems, China cannot afford to feel elated by its sudden rise.

The year 2008 marks the 30th anniversary of China's reform and
open-door policy. Achieving nearly two-digit annual economic growth
during this period, China's GDP now ranks fourth in the world after
the United States, Japan, and Germany. If China's economy continues
growing at the current rate, it is certain to surpass the size of
the Japanese economy in the near future.

Chinese economy also affects Japanese economy

The CIA has projected that in terms of purchasing power, taking
differences in prices into consideration, instead of nominal GDP,
China would become the world's second largest economy after the
United States with its economy growing to a size more than twice
that of the Japanese economy.

In terms of trading volume, China is a bigger economic partner for
Japan now than the United States is. The Chinese economy has an
influence on the Japanese economy. Japan and China are said to have
formed an economic community with a variety of sectors in Japan,
including the manufacturing and services industries, having shifted
to China. This is not a supposition but reality.

At the same time, as a member of the UN Security Council, China's
voice is becoming louder in the international political scene. One
might even wonder why China is not a member of the G8 Summit to be
held in July in Hokkaido's Lake Toya hot-spring resort area.

But Japan-China relations and the future of China and the world
around it warrant no optimism. China's defense spending has seen a
two-digit year-on-year increase over the last 19 years, surpassing
Japan's spending in 2007. China's military power, which is less
transparent than that of other countries, also worries us. Mao

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Zedong once said: "State power grows out of the barrel of a gun." In
such a country, the military has strong influence over politics.

Democracy in Taiwan has now grown to the level of directly electing
its president and legislators. China is set to use force against
Taiwan if it moves toward independence. The existence of opposition
parties is not allowed under the dictatorship of the Communist
Party, and the media is still under strict control.

China claims rights as a developing country

China has been an oil importer since 1993 because of a sharp
increase in consumption of natural resources due to rapid economic
growth combined with energy-consuming extensive development of
resources in the country. China has a strong urge to obtain energy
not only from the Middle East but also from Africa and Latin
America.

China has reportedly become the world's largest emitter of carbon
dioxide, overtaking the United States. Despite that, the country is
demanding treatment different from that of industrialized countries
as a developing country in the global effort to reduce greenhouse
gas emissions. Air and water pollution is also serious. Japan is
suffering from growing volume of yellow dust that blows over from
China due to progressive desertification in that country.

The widening rich-poor divide in China is also extremely serious.
The income disparity between urban and rural areas, which the
Chinese Academy of Social Sciences described as the world's largest,
remains huge. Working conditions for an estimated 120 million rural
migrants are harsh. Beijing has just started medical services and
old-age security for rural people and the urban poor who account for
70 PERCENT of the total population. Some researchers predict that
the pension issue will grow into a serious problem to rock China
around 2020 when the graying of its population sets in.

A question mark is hanging over China's sustainable growth and its
future stability. China's political and economic presence is
incomparably greater than that of the era before the reform and
open-door policy. Instability of China's domestic affairs might
result in a security issue in East Asia.

The "China problem" associated with its rapid development and its
growing national power has surfaced as the toughest challenge of the
21st century for its neighbors. Why is it so difficult to associate
with China?

The administration seems to be shackled by the trauma of 150 years
of aggression and oppression by powerful countries, while the
country is trying to transform itself into an affluent, strong
power.

The trauma occasionally erupts in the form of excessive claims about
sovereign rights and national interests and fierce reactions to
criticisms from other countries. However, Japan, having a history of
prioritizing sovereignty and external expansion over human rights
and freedom, despite having succeeded to be the earliest country in
East Asia to modernize, might not be qualified say this or that
about China.

Nevertheless, as a country that knows that extreme sovereign rights
and nationalism cause tremendous pain not only to its neighbors but

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also to its own people, Japan must say what must be said.

Japan-China relations have returned to normal starting with a summit
meeting that occurred when then Prime Minister Shinzo Abe visited
China in 2006. During his visit to China in December, Prime Minister
Yasuo Fukuda said "spring has come." Fukuda is eager to make 2008
the first year of progress in Japan-China relations.

But the current bilateral relations are not mature enough to
exchange frank views on the "China problem" and to learn from each
other's flaws in their modernization efforts.

Fragile Japan-China friendship

Afraid of deteriorating bilateral relations, the two countries just
seems to be playing up their friendship, while avoiding penetrating
talks on controversial issues.

We now realize how fragile Japan-China friendship is. China is
trying to make great strides forward toward becoming a major power.
Now is the time to face and frankly discuss the China problem in
order to build a bilateral relationship under which both countries
can jointly search for ways to overcome it, based on Japan's
mistakes.

DONOVAN

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