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Cablegate: Daily Summary of Japanese Press 05//08

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UNCLAS SECTION 01 OF 13 TOKYO 001190

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 05//08

INDEX:

(1) Scope column: Prime Minister Fukuda in press conference
emphasizes anguish, refrains from criticizing DPJ (Tokyo Shimbun)

(2) No policy debate between ruling, opposition parties; Unwise to
repeat fruitless debate (Mainichi)

(3) Road construction to be resumed: Local governments hailing
reapproval of tax code bill (Asahi)

(4) Details expected in July regarding base return (Ryukyu Shimpo)

(5) Gov't mulls further measures to remove Futenma danger: Manabe
(Ryukyu Shimpo)

(6) How SDF should be and reform of MOD (Sankei)

(7) Only one case of triangular merger reported after ban lifted a
year ago; "Black ships" silent, despite Japanese firms' concerns
(Mainichi)

(8) Editorial: BOJ report; Lack of policy could become risk factor
(Tokyo Shimbun)

(9) Interview with U.S. Sherpa Daniel Price: U.S. proposal to cut
greenhouse gas emissions premised on major economies acting in
concert (Asahi)

(10) Kasumigaseki Confidential: Foreign Ministry shaking up policy
toward China (Bungei Shunju)

(Corrected copy) Interview with Consul General to Okinawa Kevin
Maher (Ryukyu Shimpo)

ARTICLES:

(1) Scope column: Prime Minister Fukuda in press conference
emphasizes anguish, refrains from criticizing DPJ

TOKYO SHIMBUN (Page 2) (Full)
May 1, 2008

Prime Minister Yasuo Fukuda was finally able to reinstate the
provisional tax rates, including the gasoline tax, on April 30 with
an overriding vote in the House of Representatives. During a press
conference last night, Fukuda did not change away from his stern
face, which gave the impression that he has found it increasingly
difficult to steer his administration.

In the 20-minute press briefing, Fukuda did not criticize the
Democratic Party of Japan (DPJ), which had let languish for two
months a vote on a bill amending the Special Taxation Measures Law
in the House of Councillors. He also said: "I have no intention to
blame the uproar over gasoline prices on the lopsided Diet (with the
ruling bloc controlling the Lower House and the opposition bloc
dominating the Upper House)." He revealed that it was a truly tough
decision to take an overriding vote in the Lower House. He might
have carried a grudge against the DPJ. He might have calculated that
if he expressed his grudge against the largest opposition party,
public dissatisfaction with the hike in gasoline prices would come
back to haunt him, since he was the one who had decided to readopt

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05//08

the bill.

In an effort to gain public understanding for the revote on the
legislation, Fukuda had no other choice but to play up the critical
fiscal situation, saying: "The government lost 180 billion yen in
revenue for the month or 6 billion yen every day."

Fukuda instead stressed his determination to realize his policy of
integrating the tax revenues earmarked for road construction and
maintenance into the general account budget starting in 2009. He
reiterated: "This policy has already been decided by the government
and ruling parties."

However, there is no longer hope for the panel between the ruling
coalition and the DPJ to engage in consultations. Fukuda suggested
to the opposition party setting up the panel in an emergency press
briefing on March 27. With this in mind, he never mentioned the name
of DPJ President Ichiro Ozawa in the press conference.

Fukuda appeared to have given up discussion with Ozawa, for which he
has tried to find ways since he took office. And he said: "I want to
take this opportunity to ask all Diet members for cooperation
without being bounded by the constraints of political parties."

In the party-heads debate with Ozawa on April 9, Fukuda told Ozawa:
"Honestly speaking, I'm having difficulty deciding who (in the DPJ)
I can trust." That day, referring to the agreement reached by the
ruling and opposition parties that a certain conclusion should be
made on a bill amending the Road Construction Revenues Special
Exemption Law, Fukuda grumbled: "I think I miscalculated."

It seems Fukuda has to admit to having reached the limit of building
a dialogue with the DPJ.

(2) No policy debate between ruling, opposition parties; Unwise to
repeat fruitless debate

MAINICHI (Page 2) (Slightly abridged)
May 1, 2008

Shozo Suetsugu, deputy director, political department

The impression most of the nation should have left with after
watching the Diet battle between the ruling and opposition camps
yesterday over the bill amending the Special Taxation Measures Law
was probably something like this: I haven't the faintest idea what
they were doing.

As a result, the gasoline price will rise some 30 yen per liter,
dealing a heavy blow to the people's daily lives. But this is not
the essence of the matter. The problem is that a sense of disgust at
the political farce is spreading across the country.

The government and the ruling bloc decided far ahead of the
by-election for a Lower House seat in Yamaguchi 2nd District slated
for April 27 to put that bill to a re-vote. Chief Cabinet Secretary
Nobutaka Machimura stressed the disconnection: "The public's will
that will be shown in the by-election in Yamaguchi's 2nd
constituency does not necessarily reflect the will of the nation."

There would have been some truth in what Machimura said if the point
at issue in the election campaign had been linked to foreign and

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security affairs. But the by-election this time was fought over
issues closely linked to everyone's daily lives. The public
livelihood was the major point at issue. In this sense Machimura
failed to see Yamaguchi 2nd District as a microcosm of Japan and for
that, he could be disqualified to hold the post of lawmaker in that
members of the Diet are supposed to represent the opinions of the
public.

Initially, the ruling Liberal Democratic Party (LDP) defined the
by-election as a vote of confidence on its plan to put the bill to a
re-vote. But once its-backed candidate was seen as unlikely to win
the election, the LDP redefined it as a mere passing point.

In the meantime, the major opposition Democratic Party of Japan
(DPJ) failed to act with dignity. Its behavior did not deserve any
honor at all.

Since Feb. 29, when the bill was sent to the Upper House, the DPJ
continued to boycott discussions on the bill, citing this or that as
reasons for it to reject discussions. When the bill was put to a
re-vote (yesterday), the party's junior lawmakers tried to resist
the re-vote physically with signs showing their opposition in their
hands. But what they were doing just gave the impression that they
were playing a game to demonstrate in the Diet.

They might have wanted to appeal to the public in an emotional way,
but the public's attitude is more mature than the DPJ thinks. The
public is sick of the DPJ's behavior of simply causing confusion
without engaging in policy debate.

A long time ago, politics was described as difficult for the public
to understand. But the so-called "Koizumi politics" made politics
easy for people to understand, even though (Koizumi politics) had
both good and bad aspects. But politics has now again become
somewhat difficult to understand.

The new antiterrorism special measures bill was enacted into law
after being put to a re-vote. Then, there occurred a kind of
slapstick farce in the selection of a new Bank of Japan governor....
Perhaps in mid-May, similar scenes will emerge over the bill
revising the Law for Revenues for Road Construction. If both the
ruling and opposition parties continue to engage in fruitless
maneuvering, the public will turn its back on politics.

(3) Road construction to be resumed: Local governments hailing
reapproval of tax code bill

ASAHI (Page 2) (Full)
May 1, 2008

Wataru Aso (Fukuoka Prefecture governor), chairman of the National
Governors Association, held a press conference at the Prefectural
Hall near the Diet building, as soon as Prime Minister finished his
press briefing announcing the reinstatement of the provisional gas
tax rate. He came up to Tokyo coinciding with the opening of the
Lower House plenary session. He welcomed the readoption of the tax
code bill, noting, "The new fiscal year has already begun. However,
we can now resume road construction projects."

The divided Diet has caused an unprecedented situation. Though the
provisional rate has been reinstated, the deadline for putting the
bill amending the Special Measures Law for road construction

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revenues is approaching. Aso expressed concern: "I want the ruling
and opposition camps to pursue constructive talks for the sake of
what is most desirable for the people. If the situation is left
unattended, a similar situation would occur in fall Diet
deliberations on the budget and deliberations on bills next year."

In the wake of the revival of the provisional rate, Gunma Prefecture
has unfrozen road-related projects worth 1.7 billion yen. Those
projects are one month behind the schedule. However, an official at
the Road Planning and Control Division said, "There will be no major
impact, if the construction period is adjusted."

Niigata Prefecture Governor Hirohiko Izumida during a press
conference held before the reapproval of the bill expressed
expectations of the reinstatement of the provisional tax rate,
saying, "Reinstating the bill is a realistic measure."

Following the expiry of the provisional tax rate, the prefecture
temporarily froze 70 civil engineering projects worth 2 billion yen.
However, regarding 63 projects, it has already placed orders or
invited tenders, by securing funds from other sources than revenues
from the provisional tax rate.

In response to the readoption of the bill, a prefectural official in
charge of construction projects said in a manner that he could not
rejoice the result unreservedly, "We took the outcome calmly. We
want the government to make up for the revenue shortfall for one
month."

(4) Details expected in July regarding base return

RYUKYU SHIMPO (Page 1) (Full)
May 1, 2008

The government is now over a year behind its timetable to announce a
detailed plan to return the sites of six U.S. military facilities
located south of Kadena Air Base. The return of these sites is
linked to the planned move of U.S. Marines from Okinawa to Guam, so
the detailed plan is expected to be worked out on the basis of a
working-level plan that will be created as early as July for the
Guam move, the Defense Ministry's Okinawa Defense Bureau Director
General Ro Manabe told the Ryukyu Shimpo in an interview yesterday.
It has now been two years since Japan and the United States
finalized their agreement on the realignment of U.S. forces in
Japan.

Manabe said the planned return of U.S. military sites in the central
and southern parts of Okinawa is closely linked to the planned move
of Okinawa-based U.S. Marines to Guam. He went on: "Premised on
this, they will consider troop redeployment and other factors. In
this connection, land return will take place, so we cannot deny that
this plan will be affected by the Guam move plan." With this, he
indicated that the government cannot work out a plan to return the
sites of U.S. military facilities in Okinawa's central and southern
parts.

Manabe also said, "We have not clearly heard that the Guam plan will
be outlined in July, but they probably mean to say they would do so
around that time." So saying, Manabe indicated the government will
work out the plan after the Guam move plan is determined around this
summer.


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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05//08

Manabe revealed that the government is now considering how to remove
the danger of Futenma airfield at the request of Okinawa Gov.
Hirokazu Nakaima, in addition to measures announced in August last
year. Meanwhile, U.S. Consul General in Okinawa Kevin Maher told the
Ryukyu Shimpo in an interview that the U.S. military has already
decided to deploy the Osprey to Okinawa as the U.S. Marine Corps'
follow-on mainstay aircraft.

(5) Gov't mulls further measures to remove Futenma danger: Manabe

RYUKYU SHIMPO (Page 2) (Abridged)
May 1, 2008

The following is an interview with Okinawa Defense Bureau Director
General Ro Manabe.

-- The government has been falling behind its timetable to carry out
an environmental impact assessment for the relocation of Futenma
airfield.

Manabe: I cannot necessarily say the environmental assessment is
under way as initially planned. However, in the environmental
assessment, and also in the process of construction work after that,
we will make efforts as needed to facilitate the procedures and will
work out some ideas for the period of construction.

-- On the issue of Futenma relocation, local communities have been
calling for offshore relocation.

Manabe: Based on that request, we would like to discuss the
construction plan in a government panel with Okinawa over the issue
of Futenma relocation.

-- What about the local request to eliminate the danger of Futenma
airfield?

Manabe: Last August, the Japanese and U.S. governments worked out a
safety improvement plan to be translated into action before Futenma
relocation. The plan is now in the phase of implementation. The
governor suggested that we should make an even more technical study.
We will keep consulting with the Okinawa prefectural government, and
then we would like to study what more we can do in the area of
technical know-how.

-- The U.S. government will reportedly work out its Guam plan in
July. Based on that plan, will the U.S. return the sites of
facilities located south of Kadena (Air Base)?

Manabe: Basically, that's right. We haven't clearly heard they will
do so in July. However, they probably mean to say they would do so
around that time. We've been holding consultations with Okinawa.
However, we have yet to see their (U.S. military) plan relating to
the Guam move. That's why there's no progress in our negotiations
(with the U.S. over when to return the sites of U.S. military bases
located south of Kadena). As long as we don't know which units and
how many troops will be moved to Guam, we cannot finalize our plan.
It's hard to decide on how much of Camp Zukeran (Camp Foster) they
will use to redeploy the remaining troops in Okinawa. There's no way
we can deny it.

(6) How SDF should be and reform of MOD


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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05//08

SANKEI (Page 11) (Abridged slightly)
April 30, 2008

By Satoshi Morimoto, professor at Takushoku University graduate
school

Unable to respond to new situation

In the wake of a series of incidents and accidents involving the
Ministry of Defense (MOD) and the Self-Defense Forces (SDF), debates
on reform of MOD have become active. Above all, a bribery scandal
involving former Administrative Vice-Defense Minister Takemasa
Moriya and (the February 19) collision between the Maritime
Self-Defense Force destroyer Atago and a fishing boat raised serious
questions about the structures of MOD and SDF.

The SDF has grown into a major military force in Asia owing to half
a century of hardship and efforts by those who came before. SDF
personnel on disaster relief missions are truly dependable. The
series of incidents have betrayed the trust of those who believed
the SDF to be an elite organization.

There are no direct connections between the causes of such incidents
and the structures of MOD and SDF. True, post-accident measures and
reports exposed some problems in their structures. Still, a large
part of the causes is ascribable to commanders' instructions and the
discipline and morale of SDF personnel. When looking at those
problems from a national perspective, one must say that there lie
more fundamental problems behind them.

The question of public awareness of national defense is one of them.
MOD's objectives and significance since 9/11 have been especially
hard to understand. There is the question of threats to Japan from
the Korean Peninsula and China, as well as asymmetric threats. But
those threats have not been explained clearly.

The SDF's level of awareness is not keeping up with new situations.
As a result, not all SDF personnel are of high quality; maintaining
their discipline and morale has been difficult, and their
capabilities have not been at a high enough level. When carrying out
their duties, ideally, only those SDF troops with high morale and
discipline should be assigned to naval vessels and aircraft. A
commanding officer might hesitate to scold his subordinate who is
using a cell phone on the vessel for fear that he might quit.

Proper appearance as national military

What is national defense? What is necessary now? Such points that
concern Japan's national defense of the post-Cold War era must be
discussed thoroughly.

It is a problem that the SDF, which is a national army in effect, is
not treated as such and that SDF personnel are occasionally treated
lower in status than civilians. Many SDF personnel are accustomed to
such circumstances. Make no mistake; they are essentially a group of
individuals whose mission is to defend the nation at the risk of
their lives. That is why they are armed and conduct drills. Once
outside Japan, SDF personnel are treated as soldiers under an
international treaty. This can explain why the government can
dispatch them on overseas missions without worry.

In Japan, the SDF are not regarded as a national army. Any SDF

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member who has committed an incident or accident is investigated by
police and punished under general law. In other countries, a soldier
in a similar situation faces a court-martial and is tried under
military law. Punishments in other countries are severer, which is
natural in view of requirements of military personnel.

A national security council must be set up to discuss national
security and a national defense strategy at a state level. The law
must also be improved to leave the SDF's duties and the use of
weapons to unit commanders without tying their hands. Legislative
measures should also be taken to protect secrets and conduct
closed-door public hearings in the Diet. There are many things the
state should do, such as establishing decorations and appellation
systems to honor individual SDF members, building a memorial, and
giving compensation to those who died in the line of duty.

Discussing ways to change SDF personnel's mentality without taking
steps to implement such systems is unreasonable.


Organic integration of civilian and SDF officers

Needless to say, the SDF personnel must increase their awareness and
discipline as service members. It is not possible to treat as
soldiers those SDF members who commit incidents or accidents that
are questionable even by civilian standards. MOD and SDF
institutional reform should come after this.

The essence of this matter comes down to this question: How should
the SDF, an armed force under the command of the prime minister and
the defense minister, and MOD, a state administrative organization,
be integrated to increase the efficiency of the two bodies?

In order to maximize the functions of the two bodies, the internal
bureaus and the staff offices of the three forces should be
integrated organically so that civilian and SDF officers will be
able to assist the defense minister jointly.

In view of the operation of units, integrated operational activities
are also expected to increase. In order to deal with such a
situation, joint task forces should be increased and the internal
bureaus in MOD and the Joint Staff Office should be strengthened.

After all, it is people that run this organization. Having talented
and flexible individuals is essential in reforming any organization.
MOD and SDF are now faced with their first major reorganization
since their establishment half a century ago. Without this reform,
there is no future for them. This is a moment of truth for them.

(7) Only one case of triangular merger reported after ban lifted a
year ago; "Black ships" silent, despite Japanese firms' concerns

MAINICHI (Page 7) (Abridged)
April 30, 2008

When the ban on triangular mergers was lifted on May 1 last year,
many domestic companies anticipated that corporate "black ships"
would attack them once the ban was removed. The prevalent belief was
that removal of the ban would facilitate foreign firms desiring to
acquire Japanese companies. In reality, though, there was only a
single takeover case reported over the past year. During this
period, an increasing number of firms introduced measures to prevent

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foreign firms' takeover bids. Additionally, the U.S. subprime
mortgage crisis has aggravated the market environment, creating a
growing feeling that Japan's merger & acquisition (M&A) market has
grown stagnant.

Over the past year after the ban was removed, there was only one
case of friendly takeover of the Nikko Cordial Group by Citigroup
Inc. through its subsidiary. Before scrapping the ban, an official
of the Ministry of Economy, Trade, and Industry (METI) had
explained: "Triangular mergers are a means allowing friendly
takeovers. The introduction of this method will not increase hostile
takeover cases.

Revival of cross-shareholding practice

The removal of the ban on triangular mergers prompted domestic firms
to beef up their takeover preventive measures. According to RECOF
Corporation, a consulting firm on M&As, the number of companies
taking takeover preventive steps skyrocketed from 176 at the end of
2006 to 413 at the end of 2007.

The crossholding of shares, a practice aimed to increase long-term
shareholders, is also reviving. According to Nomura Securities'
Financial and Economic Research Institute, the ratio of cross-held
shares to all shares in listed companies in FY2006 increased 0.9
percentage points over the previous fiscal year to 12.0 PERCENT ,
marking the first ever rise since records began in FY1990. Kengo
Nishiyama, a strategist of the said research institute made this
analysis: "Japanese companies made excessive responses to the
deregulation of triangular mergers."

M&A cases involving Japanese firms in FY2007 decreased by 28.2
PERCENT in value terms below the previous fiscal year in part
because of the deteriorating market environment due to the U.S.
subprime issue.

Restrictions on foreign capital focused on

With the aim of boosting foreign direct investment, Japan decided to
lift the ban on triangular mergers. Recently, however, market
players are paying attention to Japan's restrictions on foreign
capital. On April 16, METI told a British hedge fund to drop a plan
to increase its stake in domestic electricity wholesaler Electric
Power Development Co., known as J-Power. METI explained that the
purchase of additional shares might upset the underpinnings of
public order.

A spokesman for the hedge fund criticized the Japanese market as
closed, but an executive of a leading electric power company said:
"Haphazardly opening the market as told (by foreign firms) is not
desirable." In particular, in the case of investment funds that give
priority to earning short-term profits, one can say that the
Japanese market remains as a thick wall.

Suspicious eyes by market players concerned

Since early this year, one company after another has begun scrapping
the takeover preventive measures they once had introduced. They are
worried that market players might view such with suspicious eyes.
One spokesperson remarked, "Our managers are rushing to protect our
interests." There has been a change in their awareness about
protecting themselves from takeover bids.

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Nissen Holdings, a catalogue mail-order house, decided this March to
drop the defensive measures it had taken a year before. Nihon
Optical Co., which deals in contact lenses and other products, also
decided in a general meeting in March to drop its defensive
measures. Additionally, eAccess has decided to withdraw its
preventive measures that are to expire this June.

An executive of Nissen said: "Defensive measures tend to be viewed
as intended to avoid pressure from the market. We will promote
management reforms, while keeping in mind a possible takeover bid."
An executive of Nihon Optical explained: "Taking preventive measures
might become an obstacle to our takeover bids or tie-up strategy."

Nissen has received inquiries from several companies. There is the
possibility that more companies may follow it.

(8) Editorial: BOJ report; Lack of policy could become risk factor

TOKYO SHIMBUN (Page 5) (Full)
May 1, 2008\

The Bank of Japan (BOJ) has revised down its outlook for economic
growth for fiscal 2008. One dismal factor is the political
situation, though the global financial uncertainty is linked to the
present situation. We must not allow a lack of policy to speed us
into a recession.

We are concerned about the future of the economy. The BOJ has thus
far taken a somewhat optimistic stance. In its Outlook for Economic
Activity and Prices, the central bank has taken a cautious stand,
marking a break from its pursuit of a higher interest rate.

The BOJ has revised down its outlook for real economic growth for
fiscal 2008 from 2.1 PERCENT in the previous report issued in
October last year to 1.5 PERCENT -- both figures are the median
value of estimates made by the policy-setting panel.

There are no indications of the settlement of the subprime-mortgage
issue, which arose from home mortgages being awarded to those with
poor credit standing. One U.S. government official said that worst
is now behind. However, market insiders and experts are not
convinced, believing such a statement to be far too optimistic.

Citigroup, a leading U.S. bank, has decided to boost its capital for
the fourth time. That is because a negative spiral of capital
reinforcement has been unable to catch up with the writing off of
losses, with losses continue to snowball over time.

In Japan, too, subprime mortgage-related losses incurred by the
Norinchukin Bank are estimated to reach around 10 billion yen. It
may safely be said that as long as housing prices continue to fall
in the U.S., global financial uncertainties will continue for some
time to come.

In addition, raw material prices, starting with the price of crude
oil that is now at a record level, are sky-rocketing. Looking at the
domestic situation, we see some positive factors, such as steady
capital investment. However, the economic environment is by and
large increasingly becoming harsh.

Prices have also begun rising. Reflecting the rise of grain costs,

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prices of familiar food items, such as bread, noodles, soy sauce and
beer, have all increased. The revival of the provisional gas tax
rate will likely hit personal consumption. The BOJ has revised up an
estimate for the rate of a rise in consumer price index (excluding
perishable food) to an increase of 1.1 PERCENT for fiscal 2008.

The jobless rate for March dropped to 3.8 PERCENT , showing a slight
improvement. However, new employment offers have significantly
dropped, giving no grounds for optimism.

The BOJ is required to stay alert and make a flexible response,
taking a possible interest rate cut into consideration, depending on
the future development of the economic situation. How can the Fukuda
administration afford to remain unconcerned about the economy,
though it is true that the divided Diet is blocking smooth
management of the economy? The policy presence of the Council on
Economic and Fiscal Policy has also waned.

The post of deputy BOJ governor remains unfilled. We want to see the
Fukuda administration seriously tackle the management of the
economy.

(9) Interview with U.S. Sherpa Daniel Price: U.S. proposal to cut
greenhouse gas emissions premised on major economies acting in
concert

ASAHI (Page 7) (Full)
May 1, 2008

Interviewer: Yusuke Murayama

With the climate change issue likely to take center stage at the
upcoming Group of Eight (G-8) Hokkaido Toyako Summit in July,
President George W. Bush came up with a proposal to cut greenhouse
gas emissions, but the new proposal is causing controversy. What are
Washington's real intentions? We interviewed Assistant to the
President Daniel Price, the President's Sherpa for the G-8 Summit.

Question: Since last year's G-8 summit in Germany, what has come
about as a result of intense discussions on setting a long-term goal
for greenhouse gas emissions cuts?

Answer: The Major Economies Meeting (MEM), a forum composed of a
total of 18 countries and organizations (including the G-8, China,
and India), is critical. We expect all major economies to reach an
accord on a long-term goal of cutting greenhouse gas emissions
around the world. We also hope to reach agreement that each major
economy's plans to reduce greenhouse gas emissions, including
mid-term goals, should be included in a binding international
agreement.

Question: Do you plan to include President Bush's new proposal in
the international agreement?

Answer: The President not only presented a mid-term goal of stopping
greenhouse gas-emission growth by 2025, he also presented a set of
principles on policies and legislation. We are ready to turn this
proposal into a binding international agreement, but this is
premised on all major economies acting in concert.

Question: The President's proposal could be taken as something that
allows increases in greenhouse gas emissions for the next 17 years.

TOKYO 00001190 011 OF 013

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05//08

Germany's environment minister described it as a "Neanderthal
speech."

Answer: It's really regrettable to hear that, and frankly speaking,
it was rude. The President came up with realistic goals and
principles. Meanwhile, in Germany, the government's policy has
become a burden to the industrial world. Obviously, the environment
minister is under this sort of pressure. It's regrettable to see
that he pointed the finger of blame on us instead of confronting his
own country's policy. This kind of accusation or agitation is not
constructive.

Question: In the MEM, do you think it is possible to reach an
agreement that will embrace China and India?

Answer: We respect the principle of common but differentiated
responsibilities in the United Nations Framework Convention on
Climate Change. We don't think every major economy needs to do the
same. But our position is that all major economies' respective plans
and their mid-term goals must be included in a binding international
agreement.

Question: Japan aims to adopt a sector-selective approach to
accumulate reduced emissions sector by sector.

Answer: The sector-selective approach is a very important method to
assess a feasible amount of emission reductions and necessary
technologies. It will supplement country-selective plans and
mid-term goals. I think it is unacceptable to impose trade barriers
or yardstick to assign burdens. I think Japan's proposal meets this
kind of thinking completely. We hope an agreement will be reached on
sector-selective promotion both in the G-8 summit and the MEM
session.

Question: How would you deal with soaring food prices and
development?

Answer: The United States is the largest food donor in the world. In
April, Washington announced $200 million (approximately 20 billion
yen) in emergency aid. As long term measures, the G-8 must pay
attention to improvement in distribution and in breeding. There are
concerns about the impact of biofuel (on soaring food prices), but
the actual situation appears more complicated. We are studying the
relationship between the food crisis and biofuel. It is also
important to pay attention to the healthcare sector, including HIV
and malaria. We'd like to illustrate progress on past pledges so
that we can fulfill our accountability.

(10) Kasumigaseki Confidential: Foreign Ministry shaking up policy
toward China

BUNGEI SHUNJU (Page 234 & 235) (Full)
May 2008

A schedule for the state visit to Japan by Chinese President Hu
Jintao has been informally decided. Hu will arrive at Haneda Airport
on the evening of May 6 and leave from Itami Airport on the morning
of May 10.

The schedule for President Hu's Japan visit has now been set as
follows:


TOKYO 00001190 012 OF 013

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05//08

May 7, afternoon Delivers a speech at the University of Tokyo.
May 7, night Attends dinner party hosted by Prime Minister Yasuo
Fukuda
May 8, noon Has lunch with Japanese business leaders, including
Japan Business Federation Chairman Fujio Mitarai.
May 8, afternoon Meets separately with Democratic Party of Japan
(DPJ) President Ichiro Ozawa and Daisaku Ikeda, honorary chairman of
the religious sect Soka Gakkai.
May 8, night Attends a banquet at the Imperial Palace.
May 9 Visits Toshodaiji (Temple) and Horyuji in Nara and makes tour
of Kobe Steel works in Kobe.

The Chinese side had initially wanted to visit Toyota Motors in
Nagoya. But if the party went to Nagoya, they would have to take the
Tokaido Shinkansen line. If so, because of security reasons, it
would be necessary to link two special cars to the back of the
bullet train Nozomi. Therefore, it was considered too difficult to
take the Shinkansen line. So, they will fly from Haneda to the
Kansai region. Reportedly, a visit to Kobe Steel was suddenly
arranged from the perspective of environmental protection.

After the big event of Hu's visit to Japan ends, Administrative Vice
Foreign Minister Mitoji Yabunaka, who joined the Ministry of Foreign
Affairs (MOFA) in 1969, will select in the summer a new person to
replace the present China and Mongolia Division director. The
incumbent director is Takeo Akiba (MOFA class of 1983), a member of
the so-called America School. It has been the custom that a member
of the so-called China School would serve in the post of director of
the China and Mongolia Division. Many expected First Southeast Asia
Division Director Hideo Tarumi (MOFA class of 1985) to be picked to
serve in that post. Tarumi is regarded as a "direct follower" of
Ambassador to China Yuji Miyamoto (MOFA class of 1969), considered
to be the "ace officer" among mid-level China School members.

However, this appointment system has now been derailed because the
Yomiuri Shimbun front-paged a scoop in its morning edition on March
11 that it had learned a Beijing's court had judged a senior MOFA
official was a spy. There was a rumor that Tarumi might be the
official in question. Therefore, there is a rumor that Second
Southeast Asia Division Director Koji Ishikawa (MOFA class of 1986),
a China School member, will replace Akiba. But the dominant view in
MOFA is that the ministry should not bow to China's pressure.

(Corrected copy) Interview with Consul General to Okinawa Kevin
Maher

RYUKYU SHIMPO (Page 2) (Full)
May 1, 2008

-- An announcement detailing the reversion of facilities in the
southern part of the main island (of Okinawa) has been delayed.

"The reversions south of Kadena will be the next stage after the
relocation of Futenma Air Station and the transfer (of Marines) to
Guam, so there is no need to fret. There has been an agreement to
return the part of Camp Zukeran (Foster) along Route 58, but
coordination is going on regarding the residential plan as to
whether to leave personnel who are single or those with families, so
it will take a little time."

-- What about the delay in Futenma assessment?


TOKYO 00001190 013 OF 013

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05//08

"Politically, there are a various views in the government,
prefecture, and Nago City, but the procedures are advancing. The
assessment has been slow, but I am optimistic that the procedures
will move ahead steadily.

"The (U.S. side's) budget accompanying the transfer (of Marines
from Okinawa) to Guam involves delicate timing, in that there must
be a judgment that the Futenma relocation plan has been successful.
Budgetary procedures are advancing with the expectation that the
Futenma relocation plan will be implemented. There is a point of
view that if the Guam facilities are built, there could be a
transfer to Guam even without the Futenma relocation, but that is
mistaken. If there is no relocation of Futenma, even if the Guam
facilities are built, we would look for another use for them. I am
hoping that we can avoid that."

-- The prefecture and others are calling for moving the alternate
facility into the sea.

"The positioning of the runways has already been determined in
detail. There is no option for revision. The plan will either be
implemented or not."

-- Consideration is being given by the Department of the Navy to
moving the Marines in Okinawa to Hawaii.

"The plan to transfer 8,000 Marines to Guam has not been changed.
There is not plan (between the U.S. and Japan) to move them from
Okinawa to Hawaii."

-- What about the deployment to Okinawa of the U.S. Marines' Osprey
MV22?

"The Marines have said in the past that the Osprey eventually will
replace the CH-47 (NOTE: the report says CH-47, but it should say
CH-46) helicopters, which are at Futenma. But there is no concrete
plan with respect to Okinawa."

SCHIEFFER

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