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Cablegate: Daily Summary of Japanese Press 11/21/08

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3218/01 3260816
ZNR UUUUU ZZH
P 210816Z NOV 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 8983
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
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RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 3463
RUEHFK/AMCONSUL FUKUOKA 1102
RUEHOK/AMCONSUL OSAKA KOBE 4892
RUEHNAG/AMCONSUL NAGOYA 9113
RUEHKSO/AMCONSUL SAPPORO 1673
RUEHBJ/AMEMBASSY BEIJING 6512
RUEHUL/AMEMBASSY SEOUL 2507
RUCNDT/USMISSION USUN NEW YORK 2645

UNCLAS SECTION 01 OF 06 TOKYO 003218

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 11/21/08

INDEX:

(1) China's sovereign wealth fund negotiating with AIG to acquire
stake in Alico at cost of up to one trillion yen (Nikkei)

(2) Seiron column by Doshisha University Prof. Koji Murata: Japanese
people, too, should stop always following U.S. footsteps (Sankei)

(3) Economic Minister-Counselor to Japan Cekuta pursues the views of
Hokkaido on the BSE issue and other matters (Hokkaido Shimbun)

(4) TOP HEADLINES

(5) EDITORIALS

(6) Prime Minister's schedule, November 20 (Nikkei)

ARTICLES:

(1) China's sovereign wealth fund negotiating with AIG to acquire
stake in Alico at cost of up to one trillion yen

NIKKEI (Top Play) (Full)
November 21, 2008

China Investment Corp. (CIC), a Chinese sovereign wealth fund, has
started negotiations with the struggling U.S. giant American
International Group (AIG) on a planned massive investment in
American Life Insurance Co., also known as Alico, which is under the
wings of AIG. The Chinese entity is aiming to reach a deal by the
end of the year on a plan to purchase a stake of up to 49 PERCENT
in Alico. Alico are doing life insurance business in more than 55
countries, including Japan. China, which sees the ongoing financial
crisis as a good opportunity, has suddenly appeared on the main
stage to reorganize the global insurance market.

According to informed sources yesterday, a consortium, which CIC
formed with Chinese insurers, has held preferential negotiations
with AIG to purchase its shares in Alico, with the end of this year
as their deadline. The Chinese side is expected to propose 500
billion yen to one trillion yen as the amount paid for acquiring the
stake of 49 PERCENT in Alico.

Citing AIG's future growth potential, AIG reportedly has set forth
the condition that it will keep more than 50 PERCENT of voting
rights in Alico to maintain the right of management. If both sides
reach an agreement, this could open the way for future capital and
business tie-ups between AIG and the Chinese investors.

Alico Japan, a branch of U.S. firm Alico, accounts for 60-70 PERCENT
of the company's entire insurance premium revenue. If the
investment plan is implemented, China will make an effective entry
into the Japanese insurance market. China's entry could trigger a
reorganization of the industry. Alico Japan's insurance policies are
likely to be maintained even if the Chinese investors acquire Alico
shares.

AIG announced on Oct. 3 its decision to sell Japanese subsidiaries
AIG Edison Life Insurance Co., AIG Star Life Insurance Co., and
Alico Japan. AIG decided to sell AOG Edison and AIG Star in a
package, but the possibility had appeared of selling Alico Japan
separate from its other global businesses. But the company gave up

TOKYO 00003218 002 OF 006


on selling the global operations by the piece, based on the judgment
that their values might fall.

AIG rapidly fell in financially difficult in the fallouts of the
credit woes stemming from the U.S. subprime mortgage crisis. AIG has
undertaken large volumes of credit default swaps, a type of
derivative that insures against defaults, so the U.S. government
judged that a collapse of AIG will inevitably have a serious impact
on the global financial market. Based on this judgment, the
government came up with expanded assistance measures, such as the
injection of public funds in AIG and easing loan terms.

In accordance with the government's assistance decision, AIG intends
to accelerate the sale of its assets, but its
management-reconstruction plan has not advanced smoothly. Given
this, many observers anticipated that if the reconstruction plan ran
against a snag, the current financial crisis could become even more
serious. The fate of AIG was a matter of concern for the global
stock market.

Observers speculate that China is aiming to pave the way to become a
major player in the global insurance market by investing in Alico.
China also seems to be aiming to learn advanced know-how on
insurance services and make use of the know-how for its domestic
business. Reportedly, though, CIC has latent losses in some share
holdings, affected by the U.S.-triggered financial woes. Given this,
negotiations on such conditions as the purchase price may have rough
going.

(2) Seiron column by Doshisha University Prof. Koji Murata: Japanese
people, too, should stop always following U.S. footsteps

SANKEI (Page 13) (Full)
November 19, 2008

Sen. Barack Obama (D-Illinois) was finally elected the next
president of the United States. He won a landslide victory, topping
a majority of 270 electors. The 47-year-old Obama will become the
first black American president.

Obama swept away the racial barrier in America, just as John F.
Kennedy had broken the religious barrier. Obama is being called the
"Black Kennedy" since he speaks as eloquently as Kennedy did and is
young like Kennedy was when he became president. Aiming at pursuing
dialogues in the international community, Obama has called for a
unification of divided American public opinion. Obama, who is asking
the American public to unify at a time of national crisis, is
reminiscent of Abraham Lincoln in the Civil War era. Lincoln was
tall and a native of Illinois.

If there had not been a financial crisis, it would have been
difficult for Obama to win the presidential election. Dealing with
the global financial crisis is the biggest challenge for Obama for
the time being. At this point, he appears similar to Franklin
Roosevelt, who fought against the Great Depression by coming up with
his New Deal program.

If Obama fails to manage the financial crisis, he will lose
popularity. As a result, he may have to leave the White House after
his first term is over. If such happens, he would be following in
the footsteps of Jimmy Carter and he might even be called the "Black
Carter."

TOKYO 00003218 003 OF 006

Top priorities for Obama's foreign policy are restoring civil order
in Afghanistan and resolving the issue of Iran's nuclear ambitions.
Compared to these issues, the North Korean nuclear issue is not a
high priority for the Obama administration. Japan-U.S. relations are
in such circumstances.

The Obama administration will probably ask Japan for further
cooperation in assisting the reconstruction of Afghanistan. However,
the Japanese government's position is that it cannot dispatch the
Self-Defense Forces (SDF) to that country. How much Japan should
cooperate is a matter of policy choice. We must seriously reconsider
what kind of international involvements are necessary for Japan,
which wants to win a permanent seat on the United Nations Security
Council (UNSC). Less than 40 SDF personnel are now participating in
UN peacekeeping operations (PKO). The government's official
development assistance (ODA) budget has been on the decline.

Japan should independently reconsider how to dissolve the issue of
North Korea's abductions of Japanese nationals and what kind of
methods and strategies should be taken. It should not just seek
cooperation from the United States. Although Japan cannot resolve
both the nuclear and abduction issues without Washington's
involvement, it needs to have independence in its action and not
just always seek cooperation from the United States. It is important
for Japan to find the right balance between its own independent
action and America's involvement.

I recently am often questioned about what kind of impact the
election of Obama will have on Japan-U.S. relations. However, I
think there is a lack of independent ideas -- what Japan should do
and what it wants to do with its relations with the United States --
in the questions I have received. The government's -- particularly
the Foreign Ministry's -- policy of following the footsteps of the
United States has long been criticized. I wonder if the media and
public that criticize the government and the Foreign Ministry have
followed in the footsteps of the United States in terms of coming up
with new ideas. We live in a democratic society. If voters cannot
conceive of not following in the footsteps of the United States, it
is not surprising that the government and the Foreign Ministry
follow them.

Lastly, Obama is trying to change the international image of
America. In order to improve its international image, Japan, too,
needs to think and make more efforts. Attaching priority to
improving the nation's international image and pursuing independent
actions do not contradict each other. If Japan pursues the latter
alone, ignoring the former, it will lapse into self-righteousness.
If Japan is aware of the former alone, it will mean to follow the
footsteps of the United States or play the hypocrite.

The image of a Japan that does not reflect on its past conducts and
of a Japan that does not make any apologies for the past are
obviously incorrect. Although my ability is limited, I have had
discussions on the matter with Americans, Europeans, and Chinese and
South Korean people at international conferences. In order to
correct the distortion in this image of Japan, a detailed study of
history is necessary. No one will probably object to this view.

Based on such a study of history, it is important for Japan to
present its views persuasively in a calm manner.


TOKYO 00003218 004 OF 006


It is difficult for a narrow-minded view, namely, that one's own
opinions about modern history form the only true and correct
historical view, and calling those who reject it as anti-Japanese --
to get support and understanding not only from opponents in argument
but also from third parties. It is time for both Japan and the
United States to reconsider a strategy of improving their images in
the international community.

(3) Economic Minister-Counselor to Japan Cekuta pursues the views of
Hokkaido on the BSE issue and other matters

HOKKAIDO SHIMBUN (Page 4) (Full)
November 20, 2008

Robert Cekuta, minister-counselor for economic affairs at the U.S.
Embassy in Japan, met Deputy Governor Noboru Arashida in the
Hokkaido prefectural building to pursue the views of the prefectural
government on the reason for continuing blanket inspection of cattle
for BSE and other issues. The prefectural side, which assumed he was
paying a formal courtesy call, ended up taking it as an unexpected
application of gaiatsu or foreign pressure from the United States,
which is seeking such concessions as the easing of restrictions on
beef imports.

On the blanket inspections for BSE, the minister-counselor stressed
indirectly the safety of U.S.-produced beef. He said: "I have my
doubts how much consumers understand about such things as the
butchering method for meat. If they were to understand it, the need
for such inspections would disappear."

The deputy governor replied, "Inspections themselves provide
consumers with a feeling of peace of mind." He indicated that the
blanket inspections would continue.

The minister-counselor also asked about the application of science
and technology in the agricultural sector. The deputy governor
stated, "Consumers still have an allergy to genetically-modified
foods." He pointed out: "What are consumers afraid? It is too bad
that Hokkaido cannot receive the benefits of science and
technology." He hoped to be able to tackle the dissemination of GM
products in Hokkaido.

(4) TOP HEADLINES

Asahi & Tokyo Shimbun:
Ex-vice welfare minister's wife: Man carrying box stabbed her
without speaking

Mainichi:
Wife says attacker was in 30s-40s, wearing work uniform

Yomiuri:
No fingerprints left at site of ex-vice minister, wife murder in
Saitama

Nikkei:
China's sovereign wealth fund now engaged in negotiations with AIG
to acquire big state in Alico

Sankei:
Violent incidents involving elementary school students on sharp
rise

TOKYO 00003218 005 OF 006

Akahata:
Isuzu Motors dismisses all non-regular employees

(5) EDITORIALS

Asahi:
(1) Aso's words and government carry no weight
(2) Judgment on development plan for dry beach of Awase in Okinawa a
warning against wasteful projects

Mainichi:
(1) Aso controversial remark critical of doctors quite serious
(2) Reflect survey results on children's problem deeds in specific
measures

Yomiuri:
(1) Specify how to bear costs and pay benefits for social welfare
(2) Can actual situation on bullying be grasped through survey?

Nikkei:
(1) Prime minister's statement on postal service encourages moves by
anti-reformists
(2) Slump in consumption casting shadow over U.S. stock market

Sankei:
(1) Return to policy of freeing up road tax revenues
(2) Senior NPA officer arrested for drunk driving: Stricter measures
needed

Tokyo Shimbun:
(1) Government must tackle issue of reviewing pension system
(2) Survey finds bullying cases decreasing but ways becoming
loathsome

Akahata:
(1) Possessing countries possessing should not act to preserve
cluster bombs

(6) Prime Minister's schedule, November 20

NIKKEI (Page 2) (Full)
November 21, 2008

07:33
Had a walk around his private residence in Kamiyamacho.

10:02
Met at the Kantei Japan-Bangladesh parliamentary league
vice-chairman Kosuke Ito and others, followed by Vice Foreign
Minister Yabunaka.

11:14
Met Internal and Communications Ministry Vice Minister for Policy
Coordination Terasaki, Deputy Foreign Ministers Sasae and Kohno,
METI Deputy Director General for Policy Coordination Ishige and
others, joined in by Deputy Chief Cabinet Secretary Matsumoto.

14:35
Met Japan Medical Association Chairman Karasawa and Vice Chairman
Takeshima in the presence of Upper House member Hidetoshi
Nishijima.

TOKYO 00003218 006 OF 006

15:21
Met advisor Yamaguchi, followed by Cabinet Intelligence Director
Mitani.

16:03
Met Matsumoto, Sasae and Kohno, joined in by European Affairs Bureau
Director-General Nishizaki and North American Affairs Bureau
Director-General Nishimiya.

16:55
Met former Deputy Chief Cabinet Secretary Iwaki and others, followed
by Regional Bloc System Committee Chairman Sugiura and his deputy
Sata.

17:29
Met Finance Minister Nakagawa, Economic and Fiscal Policy Minister
Yosano, Chief Cabinet Secretary Kawamura, Vice Finance Minister
Sugimoto and others. Nakagawa stayed on.

18:02
Attended a Council on Economic and Fiscal Policy meeting.

19:11
Met National Police Agency Director-General Yoshimura.

20:08
Returned to his private residence.

Prime Minister's schedule, November 21

NIKKEI (Page 2) (Full)
November 21, 2008

00:08
Departed from Haneda Airport on a government plane to attend the
APEC summit.

SCHIEFFER

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