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Cablegate: Daily Summary of Japanese Press 02/08/08

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RUEHUL/AMEMBASSY SEOUL 7650
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UNCLAS SECTION 01 OF 08 TOKYO 000345

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WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
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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 02/08/08


INDEX:

(1) Steelmakers to offer energy-conservation technology to China and
India, aiming to acquire emissions credits (Nikkei)

(2) Moving out to sea also in mind: Machimura (Okinawa Times)

(3) Verbal battle over gasoline tax: "Factories follow roads," say
government, ruling camp; DPJ's Okada presses Fukuda to admit setback
from Koizumi reform drive (Tokyo Shimbun)

(4) DPJ holding series of debates and symposia to enlist public
support for abolishing provisional tax rates (Tokyo Shimbun)

(5) Trying to determine other party's stance toward promotion of
Muto to BOJ governor: First ruling-opposition talks held on
selection of BOJ governor (Nikkei)

(6) Obama City supports U.S. presidential candidate Obama? (Tokyo
Shimbun)

There will be no Daily Summary on Monday, February 11 - a Japanese
holiday.

ARTICLES:

(1) Steelmakers to offer energy-conservation technology to China and
India, aiming to acquire emissions credits

NIKKEI (Top Play) (Full)
February 8, 2008

Japanese steelmakers, such as Nippon Steel Corp. and JFE Holdings
Inc., have decided to team up with the Ministry of Economy, Trade
and Industry (METI) to help China and India introduce
energy-conservation technology in their steel mills. The Japanese
side will start installing such technology at steel mills in China
and India after dispatching engineers to survey the situation. The
companies aim to obtain emissions credits in exchange for
contributing to reducing greenhouse gas emissions in developing
countries, based on the Clean Development Mechanism (CDM) provided
for in the Kyoto Protocol. Through the cooperation project, the
government will urge China and India to positively participate in a
post-Kyoto mechanism to fight global warming beyond the 2012
timeframe set under the protocol.

Participating in the cooperation project will also be Kobe Steel,
Sumitomo Metal Industries, and the Iron and Steel Federation. Japan
recently dispatched engineers to such Chinese steelmakers as Jinan
Iron & Steel Group Corp. in Shandong Province, Taiyuan Iron & Steel
in Shanxi Province, and Jiangyin Xingcheng Special Steel Works Co.
Engineers in Jiangsu Province. For India, Japan will send engineers
first to the Steel Authority of India Ltd. (SAIL), and then to five
steel mills in fiscal 2008, including the Tata Group.

The engineers will produce in March a report analyzing the
possibility of introducing specific energy-saving technology in the
three Chinese steel mills and in SAIL in India. Based on the report,
the Japanese side will launch negotiations next fiscal year with the
governments and steelmakers of China and India to translate the
project into action. Cited as specific energy-saving facilities are
coke dry quenching (CDQ) facilities designed to generate electricity

TOKYO 00000345 002 OF 008


using steam, and equipment to recover and recycle flammable gas from
blast and coke furnaces into fuel.

Many companies in industrialized countries, including Japan, have
proactively used the CDM designed to allow industrialized countries
to earn emissions credits in return for offering financial and
technical cooperation to developing countries like China. But such
projects are mainly to recover or destroy chlorofluorocarbon gas, so
no progress has been made in energy efficiency at steelmakers.

The joint project by the government and the public sector will make
use of several hundred million yen in subsidies from the New Energy
and Industrial Technology Development Organization (NEDO). By
reducing CO2 emissions through their technical cooperation,
steelmakers will acquire emissions credits. With government
subsidies as a pump-priming mechanism, METI hopes to promote energy
conservation to reduce greenhouse gas emissions in Asia.

Crude steel output in China has been sharply increasing in recent
years. China produced about 490 million tons in 2007, more than
one-third of the world's total. According to METI, China uses up to
20% more energy than Japan if both produce the same amount of steel.
Steelmakers in China reportedly generate over 1 billion tons of CO2
annually. If Japan's technology is used, emissions would be reduced
by 160 million tons a year. Crude steel in India is also
significantly growing. It is now ranking 5th in the world, and is
expected to double to the Japanese level by 2012. Naturally, CO2
emissions in India will certainly increase.

The issue of how to fight global warming will be high on the agenda
for the upcoming G-8 summit in July. As part of global measures to
contain emissions, Japan has proposed setting nation-specific
targets for reducing emissions after collecting and aggregating
emissions data for different industries.

According to the international Iron and Steel Institute (IISI),
emissions from the steel industry account for nearly 10% of the
world's total. Under the collecting-and-aggregating method, the
steel industry will top the list of industries. Given this, Japan
has decided to help China and India construct energy-efficient
plants.

(2) Moving out to sea also in mind: Machimura

OKINAWA TIMES (Page 1) (Full)
February 8, 2008

TOKYO-The government held a sixth consultative meeting yesterday
evening at the prime minister's office with authorities from Okinawa
Prefecture and its municipalities to discuss the issue of relocating
the U.S. Marine Corps' Futenma Air Station in Ginowan, Okinawa
Prefecture, to a coastal area of Camp Schwab in the prefecture's
northern coastal city of Nago. Concerning Futenma relocation,
Okinawa Prefecture and its base-hosting localities have been calling
on the government to move the planned alternative facility out to
the sea. "We're now going through the procedures for an assessment
of the Futenma alternative's potential impact on the environment,"
Machimura said. "In that process," he added, "we will give thought
to the local request to move it out to the sea, and we will also
discuss problems about the construction project as well." This is
the first time for the government in its consultative meeting with
Okinawa to clarify its intention of discussing the proposal to move

TOKYO 00000345 003 OF 008


the construction site out to the sea. Concerning when to hold the
next consultative meeting, Machimura said it would be "around the
end of the current fiscal year." With this, he indicated that the
next meeting would be around April.

In addition, Machimura stressed, "We'll have to make our utmost
efforts to reach a settlement at the earliest possible time." With
this, the top government spokesman indicated that the government
would try to resolve the Futenma issue at an early date by moving
the relocation site out to the sea.

After the consultative meeting, Gov. Hirokazu Nakaima from Okinawa
Prefecture met the press. In his press remarks, Nakaima welcomed
Machimura's response. "I think the government is now beginning to
consider this matter (offshore relocation) in its own way," he said,
adding, "I'm also expecting the government to make a decision in
response to the chief cabinet secretary's remarks." With this, the
governor expresses his expectations.

Meanwhile, Nakaima has released his statement on the government's
procedural plan, which was submitted by the Defense Ministry's
Okinawa Defense Bureau, to assess the newly planned facility's
potential impact on its environs. In response, the government
presented a revised plan to Okinawa Prefecture. "We appreciate the
Defense Ministry's quick response," Nakaima said. The question is
whether the governor will give the go-ahead for the environmental
impact assessment. "Based on the government's response to my
statement," Nakaima said, "I will make an appropriate judgment under
the law." In the press conference after the consultative meeting,
however, the governor showed his stance of responding in a positive
manner. "We will go ahead if we can clear up what our screening
board can consider," he said.

(3) Verbal battle over gasoline tax: "Factories follow roads," say
government, ruling camp; DPJ's Okada presses Fukuda to admit setback
from Koizumi reform drive

TOKYO SHIMBUN (Page 2) (Excerpts)
February 8, 2008

The ruling and opposition camps sparred over the maintenance of the
provisional gasoline tax rate in the House of Representatives Budget
Committee session that started yesterday. The government and ruling
parties protracted the question-and-answer session apparently in an
effort to maintain the road-related tax revenues. Democratic Party
of Japan Vice President Katsuya Okada clashed with the ruling
coalition by shedding light on the rearguard nature of the ruling
camp.

In yesterday's session, seven lawmakers took the floor as
questioners. Six of them were from the ruling camp.

LDP Policy Research Council Chairman Sadakazu Tanigaki, using a
national expressway and highway map in which the completed roads
were marked in blue and those yet to be constructed in red,
explained: "Without the reds, (the Japanese archipelago) remains
disintegrated. The roads must be connected to each other."

Tanigaki was immediately followed by Land, Infrastructure, and
Transport Minister Tetsuzo Fuyushiba, who discussed in detail the
significance of road projects, citing the planned roads one by one
for over eight minutes. "Once roads are built, factories will

TOKYO 00000345 004 OF 008


definitely follow," Fuyushiba declared from the viewpoint of
revitalizing local economies.

New Komeito Policy Research Council Chairman Tetsuo Saito also
stressed: "It is too simplistic to assert that the government builds
unnecessary roads with road-related tax revenues."

Kosuke Ito from Tokyo fanned a sense of crisis, stating:
"Road-related revenues are vital in Tokyo, as well. If (the
road-related budgets) fail to clear the current Diet session, (the
completion of) the metropolitan beltway project (connecting Tokyo
suburbs) will be delayed by 20 years."

"You should admit that you have backed away from the statement made
by former Prime Minister (Junichiro Koizumi)."

Okada, who took the floor as the last questioner, criticized the
stances of Prime Minister Yasuo Fukuda and the ruling parties by
citing former Prime Minister Koizumi, who had aimed at using
road-related tax revenues for general purposes.

Fukuda contended that the government has not backed away, explaining
the government's policy to incorporate the tax revenues in excess of
the road-construction budget into the general account.

Koizumi had categorically said that the road projects in excess of
the already included in the 9,342 km expressway plan were a "blank
slate." The government, however, has produced a midterm road program
that includes plans to build 14,000 km of roads over the next ten
years. Okada asked Fukuda, "Who made that decision?"

In response, Fukuda said: "Some projects might not be implemented."
Okada further raised a question, saying: "This also means that every
single person in this country has to contribute 500,000 yen to the
road projects over the next 10 years. I wonder if the public will
support it." Fiercer debate is expected in today's session, for all
interpellators will be from the opposition camp.

(4) DPJ holding series of debates and symposia to enlist public
support for abolishing provisional tax rates

TOKYO SHIMBUN (Page 2) (Abridged slightly)
February 8, 2008

The Democratic Party of Japan (DPJ or Minshuto) has held a series of
debate sessions and symposia outside of the Diet with the aim of
playing up the need to incorporate road-related tax revenues into
general revenues and to abolish the gasoline tax. The party intends
get the public on its side in a bid to have the upper hand over the
government and ruling parties in Diet debates.

The DPJ held last night in Tokyo a symposium titled "Should the
provisional tax rates be lowered or maintained?" Many party
executives voiced their views in the session. Deputy President Naoto
Kan, for instance, said: "(The subject of) road-related tax revenues
provides a good opportunity to fundamentally question the
transparency of taxes." Secretary General Yukio Hatoyama noted: "We
cannot budge even an inch regarding the question of using
road-related tax revenue for general purposes and abolishing the
provisional tax rates. Enlisting public support is most important."
Meanwhile, Lower House member Akio Fukuda attended a National Youth
Mayors Association workshop yesterday, in which he sought the

TOKYO 00000345 005 OF 008


mayors' understanding, describing the reform of road-related tax
revenues as the cornerstone of all reforms.

Kan is scheduled to attend a pep rally to be held today by six local
organizations. He will also hold an open panel discussion on Feb. 19
by inviting such individuals as Miyagi Governor Hideo
Higashikokubaru and Fukuoka Governor and National Governors'
Association head Wataru Aso. A group of junior DPJ lawmakers is also
on a national tour to disseminate the party's idea of lowering the
gasoline price. National Movement Committee Chairman Sakihito Ozawa
said: "We would like to stir public opinion in tandem with heated
Diet deliberations."

Although incorporating road-related revenues into general revenues
and abolishing the provisional tax rates will lower the gasoline
price, there is concern centering on local districts that they might
delay necessary road projects as well. The DPJ is urged to quickly
disseminate its assertion properly.

(5) Trying to determine other party's stance toward promotion of
Muto to BOJ governor: First ruling-opposition talks held on
selection of BOJ governor

NIKKEI (Page 3) (Excerpts)
February 8, 2008

The official channel between the Liberal Democratic Party (LDP) and
the Democratic Party of Japan (DPJ) has gotten underway for
discussions on the selection of a successor to Bank of Japan (BOJ)
Governor Toshihiko Fukui, whose term expires on Mar. 19. They first
talked about steps to secure Diet approval. Coordination of views on
the promotion of Deputy BOJ Governor Toshiro Muto, a former vice
finance minister who is the favorite of the government and the
ruling camp, is expected to gradually move into full swing. While
Prime Minister Yasuo Fukuda and DPJ President Ichiro Ozawa remain
silent, the bargaining over the issue is taking on a complex note.

It has thus far been believed that there are several channels for
talks on the selection of a new BOJ governor between the government
and the DPJ. LDP Diet Policy Committee Chairman Tadamori Oshima and
DPJ Diet Affairs Committee Chairman Kenji Yamamoto on the afternoon
of Feb. 7 took the first official action. Oshima visited Yamaoka's
office in the Diet building. They talked for about 30 minutes on
their own.

Oshima said, "I would like to deal with this issue in a cautious and
considerate manner," He then sought Yamaoka's view not on who should
replace Fukui but how his successor should be decided. Handing over
a piece of paper to Oshima, Yamaoka replied, "Why don't we
informally hear the policies of candidates at the House Steering
Committee?" The paper was an agreement signed in February 2004 by
the Diet Affairs Committee chairmen of the LDP, the DPJ and the New
Komeito.

The agreement paper noted that when the government proposes a
personnel appointment plan, such as the appointment of a BOJ
governor, it is required to informally listen to the views of
candidates.

The agreement mentions that candidates should be called into the
board meeting of the Diet Affairs Committees of the Lower and Upper
Houses. However, Yamaoka proposed that they should be called into

TOKYO 00000345 006 OF 008


the committee attended by more participants. Oshima brought the
agreement back to the LDP, saying, "We will reply after vetting the
contents." One LDP senior official said that the agreement reached
by the three parties "carries weight."

As such, possible procedures might be: (1) the government makes an
assignment proposal to the joint council of representatives of the
House Steering Committee of both the Lower and Upper Houses; (2) the
House Steering Committee listens to the stances of candidates; (3)
each party chooses one person from among the candidates, based on
intra-party procedures; and (4) they hold a vote at the plenary
sessions of the Lower and Upper Houses.

Both Oshima and Yamaoka said that no specific names have been given.
However, one senior opposition party member, who is cautious about
the promotion of Muto, a former, suspected, "This may be a maneuver
toward approving Muto as governor." The DPJ opposed the appointment
of Muto as deputy governor in 2003, as well. One reason for its
opposition was that the summoning of Muto to the Diet was not
realized. The hearing of his policy as proposed this time can be
taken as a maneuver to play up the idea that transparent procedures
have been secured, while containing those opposing his appointment.

Chief Cabinet Secretary Nobutaka Machimura on Feb. 7 stated that
only one person would be recommended, backing up the view that final
coordination would be undertaken to recommend Muto. Both Oshima and
Yamaoka are in agreement on the perception that the government will
recommend only one person. That is because if the LDP and the DPJ
fail to recommend the same candidate after hearing the views of
candidates, the candidates would lose face.

Prime minister, Ozawa remain silent: DPJ members advocating notion
of separation of fiscal and monetary administration in agreement
with anti-Ozawa forces

The meeting of Diet Affairs Committee chairmen held on Feb. 7
surfaced suddenly. Only a few government and ruling part officials
had been informed of a plan to hold such a meeting.

The DPJ's internal procedures are that upon receiving a government
proposal, it will discuss the matter at its subcommittee tasked with
considering personnel appointments requiring Diet approval and reach
a final decision at its executive meeting (Diet executive liaison).

Those in favor of the notion of separation of fiscal and monetary
administration dominate this panel. One member asked, "Is it all
right for Mr. Muto, a former Finance Ministry official, to serve in
the top post of the BOJ, which steers the nation's monetary policy?"
Some are also resentful of the DPJ leadership trying to create
momentum to leave the matter to Ozawa at an early stage, believing
that he should make a final decision.

What makes the matter complex is that those who are cautious about
the idea of promoting Muto are in agreement with influential members
who keep their distance from Ozawa, such as Subcommittee Chairman
Yoshito Sengoku. These people are also squaring off against the LDP.
They are distrustful of Ozawa, who once secretly tried to explore
ways to realize a grand coalition along with the prime minister.
Deputy President Katsuya Okada, who advocates separation of fiscal
and monetary administration, yesterday hinted at his cautious stance
toward the promotion of Muto, noting, "There is no change in my
stance toward this issue."

TOKYO 00000345 007 OF 008

Many informed sources believe that a battle between Ozawa and
anti-Ozawa forces has started. If anti-Ozawa forces in the DPJ join
hands with the Japanese Communist Party, the Social Democratic Party
and the People's New Party in opposition to the promotion of Muto,
the situation would become uncontrollable. Such misgivings have
gradually emerged in the government and the ruling camp.

The prime minister and Ozawa remain silent probably because they
want to determine the moves among DPJ members. LDP Secretary General
Bunmei Ibuki visited the Kantei yesterday evening. He told the prime
minister, "The Diet Affairs Committee chairmen will be busy for some
time to come. I would like you to take a wait-and-see attitude."
However, when reporters asked Fukuda, "Did you discuss the selection
of a new BOJ governor with the secretary general?" he simply
replied, "No, not at all."

(6) Obama City supports U.S. presidential candidate Obama?

TOKYO SHIMBUN (Page 26) (Slightly abridged)
February 7, 2008

Those involved in the tourist business in Obama City, Fukui
Prefecture probably paid more attention to the Super Tuesday primary
races in the U.S. presidential election campaign than did Prime
Minister Yasuo Fukuda and Democratic Party of Japan (DPJ or
Minshuto) President Ichiro Ozawa. It is true that when we input the
word "Obamashi" for Obama City in Japanese on the computer's search
engine, we also come up with the word "Obama-shi" for Mr. Obama.
Even though the tourist agents know this is a poor joke, they are
giving their vocal support enthusiastically to Democratic
presidential candidate Barack Obama. They even hope that someday a
Japan-U.S. summit meeting might be held in their city, Obama.

Obama, an old historical city, has a population of 32,000. Facing
Wakasa Bay, Obama was once a gateway for continental Asian culture.
The city has provided fish and other seafood to Kyoto and Nara since
the Nara Period. The popular television drama series on NHK,
"Chiritotechin," takes place in Obama. The head of the international
exchange program in the city said on the phone: "We are aiming at a
multiplier effect from our city's public relations about the TV
drama and Mr. Obama."

Appearing on a television program last December, Senator Obama said:
"When I visited Japan, a customs official told me, 'I'm from Obama
City in Fukui Prefecture.' I feel like I have an affinity with that
city." Watching this scene on TV, Shoryu Tamagawa, 44, the priest of
Haga Temple, sent an e-mail to Mayor Toshio Murakami. His message
was: "Mr. Obama carried out public relations for Obama City.
Exchanges might occur. Why don't we offer our thanks to him?"

In January last year, Mayor Murakami sent a letter, in which he
said: "It would be grateful if you would take an interest in OBAMA."
The mayor introduced the history and culture of the city to the
senator. Murakami also presented chopsticks to Obama and his wife.

The Tokyo Shimbun's news coverage team of this column went to
interview officials in Yokosuka City, where there is a town called
Oppama. Regarding Obama City's efforts, however, a tourism bureau
official just said, "You don't say!" It appears that Yokosuka will
not take any action. The reporters also interviewed a spokesperson
from Nissan Motor's Oppama plant who said: "I don't think our plant

TOKYO 00000345 008 OF 008


has any special plan." They were quite cool to the idea.

The team then looked around for supporters of Hillary Clinton. The
team found a regional currency called "hirali," which is available
only in a shopping mall in Hirakata City, Osaka. One hirali is worth
100 yen. Takeshi Muto, chief secretariat of the nonprofit
organization Hirakata Regional Currency Hirali said: "Around
January, our staff made a joke that since the pronunciations of the
name of our association and the name 'Hillary' are the same, why
don't we support Hillary Clinton? But nothing has happened yet."

Chikusui Canycom, a farm equipment company, in Ukiha City, Fukuoka
Prefecture, manufactures and sells tracklaying haulage vehicles with
the brand name Hillary. The company started selling the vehicle in
1993, when Bill Clinton became president of the United States.
Hillary Clinton was then drawing public attention. In accordance
with bringing out of a new model, the company changed the name of
vehicle from the Japanese hiragana character to English. The
official in charge of the public relations of the company flatly
said: "The sounds of the words happen to be similar. We are not
aware of Mrs. Hillary Clinton." But the company has the bush cutter
called "George" and grass cutter "Masao."

Hotel Sekumiya in Obama City has put Obama's portraits on the walls
of its lobby and around the elevators. Seiji Fujiwara, executive
managing director of the hotel, who also serves as chairman of the
city's tourist association's promotion committee, has set up a
self-proclaimed support group. Fujiwara said:

"Hearing that Hillary first had the edge, our activity to support
Obama was small. Since Obama has made great strides this time
around, he now has a chance to win. I want him to beat Hillary. If
he becomes president, I want him to hold a Japan-U.S. summit in the
city of Obama"

DONOVAN

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