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Cablegate: Daily Summary of Japanese Press 07/12/07-2

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RUALSFJ/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
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RUEHBJ/AMEMBASSY BEIJING 7874
RUEHUL/AMEMBASSY SEOUL 3933
RUCNDT/USMISSION USUN NEW YORK 5009

UNCLAS SECTION 01 OF 07 TOKYO 003192

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 07/12/07-2


Index:

(3) Editorial: Abe politics to be judged by voters in Upper House
election

(4) Editorial: Upper House election occasion to judge 10-month-old
Abe administration

(5) Advice to Prime Minister Shinzo Abe -- Fight with confidence

(6) Survey: Sharp increase in "netizens" between 40 and 50 years of
age, Overall usage as compared to 5 years ago increased 13 points to
59 %

(7) Kasumigaseki Confidential column: Meandering US-Japan relations


ARTICLES:

(3) Editorial: Abe politics to be judged by voters in Upper House
election

ASAHI (Page 3) (Full)
July 12, 2007

The official campaign for the July 29 House of Councillors election
kicks off today. It is the first time for Prime Minister Shinzo Abe,
who assumed office last September, to fight a major national
election.

When Abe won big in the presidential race of the Liberal Democratic
Party (LDP) about nine months ago, he would not have expected that
he would receive his first public judgment under a severe adverse
wind.

Abe has to go to the election campaign while dealing with the
pension-record mess, money scandals involving cabinet ministers, and
insensitive comments by cabinet members.

Abe was supposed to ask for a vote of confidence through the Upper
House election by playing up his own policy imprint, which differs
from that of former Prime Minister Junichiro Koizumi. To that end,
he steamrollered many bills into law, including a national
referendum bill.

He has set up several advisory panels on educational reform and the
interpretation of the right to collective self-defense, urging
panels to come up with recommendations.

Appearing on TV, Abe said, "I want the public to assess the results
I have produced over the last nine months." He must be unwilling to
fight in the election under the present situation.

Of course, the pension fiasco is a major issue in the upcoming
election. It is necessary to debate how to respond to public
distrust and anger and how to create a system and organization
people can rely on.

At the same time, the main purpose of the upcoming election is that
voters will check what the Abe administration has done or has not
done over the last nine months. People should not forget this.


TOKYO 00003192 002 OF 007


For Minshuto (Democratic Party of Japan) the meaning of this Upper
House election is extremely significant. It will be a great chance
for the party to rebound from its humiliating defeat in the House of
Representatives election in 2005.

Should the opposition camp secure a majority in the Upper House, it
will be able to reject bills passed by the government and ruling
coalition, as well as to decide methods for conducting
deliberations. Although the ruling camp holds a majority in the
Lower House, it won't be able to manage politics under its
leadership.

Even if the ruling coalition loses its majority in the Upper House,
the reins of government will not be transferred from the LDP to
Minshuto. However, in case the opposition drives Abe to dissolve the
Lower House for a general election, such will become a major
foothold for a political change. A political realignment might then
occur.

Ozawa said that he would resign as a politician if the opposition
camp fails to gain control in the Upper House. This is because he
might have assumed that the upcoming election will be a decisive
battle for a two-party system, which he has long sought. The three
matters, including the politics-money issue rekindled by a political
fund scandal involving Agriculture Minister Norihiko Akagi, are
important campaign issues. Let us pay attention to debate on these
matters among political parties, including the New Komeito, Japanese
Communist Party, and Social Democratic Party. Let's remember that we
are required to choose -- Abe's policy of emerging from the postwar
regime or Ozawa-led Minshuto's two-party system -- for the future
course of Japan's politics. We should closely watch the 18-day
campaign.

(4) Editorial: Upper House election occasion to judge 10-month-old
Abe administration

NIHON KEIZAI (Page 2) (Full)
July 12, 2007

The 21st regular election of the House of Councillors is to be
officially announced on July 12. The ruling and opposition parties
will kick off fierce election campaigns to win a majority in the
Upper House with the pension flap, regional revitalization,
agriculture, and the shady ties between politics and money as
campaign issues. The upcoming election is a very important national
election through which voters will pass judgment on the Shinzo Abe
cabinet, which was inaugurated last September. There is the
possibility of a major change occurring to Japanese politics,
depending on the outcome of the election.

We want to see in-depth discussion take place on pension system

Some 121 seats (73 for electoral districts and 48 for proportional
representation), half the number of the Upper House seats, are up
for election. In order for the ruling Liberal Democratic Party (LDP)
and New Komeito to maintain a majority, they need to secure at least
64 seats. The major focus of the election is whether the opposition,
including the Democratic Party of Japan (DPJ or Minshuto), can force
the ruling camp into the minority.

Public approval ratings for the Abe cabinet have plummeted since the
revelations of the mishandling of pension premium payment

TOKYO 00003192 003 OF 007


record-keeping. The LDP is forced to fight a difficult battle due to
a series of controversial remarks and office expenses issues caused
by cabinet ministers. Prime Minister Abe is determined to make a
public appeal of his policy of reconstructing the pension system and
revitalizing education and regional districts.

Opposition parties are criticizing the LDP-New Komeito
administration for having widened income disparities and made people
less secure. The DPJ has made the following three proposals the
pillars of its election pledges with the aim of forcing the ruling
camp into the minority and realizing a change of administration in
the next Lower House election: (1) issuing pension books to all
contributors; (2) setting up a child allowance system, under which
26,000 yen is paid for each child; and (3) introducing a farm
household income guarantee system.

Prior to the official announcement of the Upper House election, a
party head debate was held at the Japan National Press Club on July
11. The focus of the discussion was the pension issue as expected.
Regarding the pension fiasco, the prime minister has come up with
extensive measures also including arguments made by the DPJ and the
Japanese Communist Party. At the debate yesterday, Abe said that he
had adopted every possible measure. Points at issue are gradually
shifting from measures to deal with unidentified pension premium
payment records to discussions on the nature of the pension system.

DPJ head Ozawa has proposed introducing a minimum pension guarantee
system financed by the current consumption tax, targeting those in
the relatively low income bracket. The prime minister and New
Komeito head Akihiro Ota raised doubts about the feasibility of
Ozawa's proposal, noting that the funding is unclear and that the
plan does not include the amount of a minimum pension guarantee and
income limitation. They asked how the DPJ intends to determine the
income of the self-employed.

The ruling camp noted that the ratio of state contribution to the
basic pension should be raised to 50 % in fiscal 2009, but they
have not yet mentioned how to secure 2.5 trillion yen to finance the
plan. Prime Minister Abe steered clear of categorically saying
anything about the consumption tax, simply noting, "I would like to
bring a situation in which a consumption hike can be thwarted by
such means as spending cuts and economic growth."

Concerning the present system of requiring 25 years of contributions
in order to be eligible to receive benefits, Ota proposed looking
into the possibility shortening the contribution period. We welcome
the ruing and opposition camps pursuing in-depth discussions of the
pension system in order to dissolve anxieties felt by the public.

If they deepen discussions on the pension system and financial
resources, they would find it necessary to discus ways to
reconstruct Japan's public finances. The DPJ estimated that expenses
needed to implement measures included in its manifesto would be 15.3
trillion yen and that the amount should be secured by streamlining
subsidies and cutting administrative expenses. The prime minister
also noted that in order to achieve a primary balance by fiscal
2011, it would be necessary to cut expenditures by 12-14 trillion
yen.

Political parties should compete over drastic administrative and
fiscal reforms


TOKYO 00003192 004 OF 007


Both the LDP and the DPJ stressed they would cut expenditures in a
far-reaching manner, but they dodged discussion of the consumption
tax. Their manifestoes do not include any specific measures or
process to cut expenditures. Unless they come up with persuasive
visions for administrative and fiscal reform, they will not be able
to gain understanding from voters.

A change of administration is not at stake in an Upper House
election. It is an election to choose half the number of seats in
the second chamber of the Diet. An Upper House election could mean
an interim evaluation of the administration in power. For the Abe
administration, which has yet to undergo voters' judgment in a Lower
House election, the upcoming Upper House election will be the first
election through which it will undergo a real judgment. Its
political meaning is immense. If the ruling camp loses a majority,
it will have a serious impact on the management of the
administration and its policy direction.

A defeat in the Upper House election of the ruling parties will not
directly lead to the question of whether or not the prime minister
should resign. There is no Diet vote for prime minister after an
Upper House election. However, there have been cases in which prime
ministers stepped down following defeats in Upper House elections.
It is naturally desirable that as many voters, with whom sovereign
power resides, as possible take part in balloting for the Upper
House election.

(5) Advice to Prime Minister Shinzo Abe -- Fight with confidence

SANKEI (Page 3) (Abridged slightly)
July 12, 2007

By Yoshiko Sakurai

It is clear from the international situation surrounding Japan that
the world is in need of value-oriented diplomacy, as is advocated by
Prime Minister Shinzo Abe. At the same time, the loss of basic
values by a country's top leader could throw the country into
turmoil and harm its national interests. Japan's vicinity is filled
with such examples.

South Korea is clearly showing dangerous signs. The Grand National
Party (GNP), a conservative-leaning opposition party in South Korea
that has fought with the Kim Dae Jung and Roh Moo Hyun
administrations, has now turned around its policy. On July 4, the
GNP in an apparent reversal of its previous stance released what it
called the Vision for Peace on the Korean Peninsula, pledging to
extend substantial aid to North Korea's Kim Jong Il regime without
forcing it to abandon its nuclear programs. The GNP's policy has
leaned toward the North almost to the point of being identical to
that of the Roh administration.

The unnecessary policy change by the highly popular GNP is mainly
ascribable to the United States' major concessions to North Korea
during the six-party talks in February.

More specifically, the conservative South Korean party's move
resulted from Secretary of State Rice and other leaders' pointless
shift to a pragmatic policy course to join hands with Kim Jong Il.
The GNP feared that South Korea might be left behind.

Tilts toward North Korea by Washington and Seoul will not help

TOKYO 00003192 005 OF 007


resolve the North Korean missile standoff or block China's latent
control. Their compromises come from a lack of solid national
visions and beliefs.

Their concessions will end up increasing the influence of North
Korea and China. Abe diplomacy must stand firm, realizing that
Japan's role is to play a central role in spreading such values as
democracy, freedom, human rights, and the rule of law in Asia in
place of the shaky United States.

China's National University of Defense has released what is called
the national defense program 2010. In the report, Japan and the
United States are specified as China's major strategic targets that
might intervene in Taiwan affairs and a battle in the Taiwan Strait.
What is more interesting is the following passage on a battle in the
Taiwan Strait: "Deployment of ground-based fighters will be
basically sufficient to achieve China's objective in dealing with
Japan and the United States."

Where does that confidence come from? China apparently thinks that
armed with missiles and nuclear warheads that have all of Japan,
including Tokyo and Osaka, in range, it can intimidate Japan and
constrain it. China must think the same way toward the United
States. China now possesses missiles and nuclear warheads capable of
reaching the continental United States and the ability to attack
satellites to destroy communications systems to temporarily freeze
the United States' military response. China might someday decide to
use those capabilities, thinking that it will be able to contain the
United State's move at the same time.

What is the United States' view of a China that has those political
and military ambitions? The latest issue of Foreign Affairs carries
an essay by Barack Obama, a candidate for the Democratic
presidential nomination, which expresses his determination to forge
a more effective framework in Asia that goes beyond bilateral
agreements. "A framework that goes beyond bilateral agreements" can
be taken to mean a structure that goes beyond the Japan-US alliance.
Obama's essay also read: "I will also encourage China to play a
responsible role as a growing power -- to help lead in addressing
the common problems of the twenty-first century."

Needless to say, this is Obama's personal position. At the same
time, many American people put high priority on Japan, as seen in
the Wall Street Journal July 9 editorial that gave a positive
assessment to Prime Minister Abe's value-oriented diplomacy.

The prime minister must work harder to deepen mutual understanding
with those people attaching importance to Japan. What they are
watching is his visions and his resolve to realize them. Recent
developments from the establishment of the Defense Ministry to the
enactment of national referendum legislation as the first step to
constitutional revision to the reforms of the civil servant system
and the Basic Education Law were all designed to bring visions to
Japan. Level-headed individuals welcome such changes in Japan as a
major international player.

Prime Minister Abe has also settled an old lawsuit filed by Japanese
orphans left behind in China in the closing days of WWII.
Additionally, he is endeavoring to reach a settlement with people
suffering from hepatitis resulting from contaminated blood products.
Even the Asahi Shimbun highly evaluated those achievements
reflecting strong national sentiments.

TOKYO 00003192 006 OF 007

Prime Minister Abe has steadily resolved long-standing issues that
have been left unattended by successive administrations due to a
lack of national visions and consideration to the general public.
His achievements deserve high marks.

To begin with, a House of Councillors election must serve as an
opportunity to discuss basic polities and how politics should deal
with the pubic. Although attention is focused only on the pension
issue in this year's election, Prime Minister Abe should fight with
confidence.

(6) Survey: Sharp increase in "netizens" between 40 and 50 years of
age, Overall usage as compared to 5 years ago increased 13 points to
59 %

TOKYO SHIMBUN (Page 1) (Full)
July 12, 2007

The Ministry of Internal Affairs and Communications yesterday
announced the results of their survey on household economy which
measured internet use during a one year period starting in October
2005. Compared to the results of a similar survey conducted 5 years
ago, the amount of people who used the internet during a one year
period increased by 15,000,000, bringing total number of internet
users to 67,500,000. A drastic jump in the number of internet users
in their 40s and 50s was a leading factor in the overall increase.

In their analysis of the results, the ministry described the
increase as a result of "the diffusion of the internet into daily
life via cell phones, PHS and email."

About 80,000 households nationwide were selected at random for this
survey, and using responses received from around 180,000 people over
the age of 10 last October, the ministry came out with these
estimated numbers. Internet usage related to work or academics was
excluded from the results.

At 59.4 % , internet usage was up 13 points compared to the previous
survey (which included work and academic-related internet use).
Usage increased among all age groups, but increases were especially
dramatic among women ages 40-44, up 31.2 points to 80.6 % , and
women ages 45-49, up 34.4 points to 71.5 % .

Use centered on "email" and "information and/or news gathering," and
39.2 % of women ages 40-44 said they used email "more than 200 days
a year (more than four times a week)."

(7) Kasumigaseki Confidential column: Meandering US-Japan relations

BUNGEI SHUNJU (Page 234) (Excerpt)
August, 2007

Prime Minister Shinzo Abe and his cabinet have been going in circles
regarding the pension problem. This meandering has not stopped at
domestic affairs but has also begun to affect foreign diplomacy,
namely the safety net of US-Japan relations.

One cause is North Korea. Last July, just before the Liberal
Democratic Party (LDP) presidential election, North Korea launched
ballistic missiles, and just after the new administration was
inaugurated, they conducted a nuclear test. PM Abe's signature

TOKYO 00003192 007 OF 007


policies towards the DPRK - political pressure and a hard-line
stance - matched perfectly with the attitude of the Bush
administration and were a main reason behind the high support rate
that the Abe cabinet enjoyed.

One year later, the US switched to a dialogue-oriented, flexible
stance towards the DPRK, and Assistant Secretary of State
Christopher Hill made a surprise visit to North Korea. Furthermore,
the GOJ was told about the planned visit while Hill was visiting
Japan, only right before it was to happen. Asian and Oceanian
Affairs Bureau Director General Kenichiro Sasae was asked to keep
the visit a secret until Hill departed and had no control over the
situation. Hearing reports from Sasae, Vice-Minister for Foreign
Affairs Shotaro Yachi could not hide his skepticism, asking, "Is
there any point in going to North Korea?"

Foreign Minister Taro Aso made public the discomfort of Foreign
Ministry leaders in a press conference by stating, "There is nothing
more foolish than rushing over in a panic and showing weakness."
Coming from Aso, the strongest "post-Abe" candidate, these words
gave a shock to those in the US who deal with US-Japan relations.

Another cause behind the wavering of US-Japan relations is the
"comfort women" issue and the passage of a resolution by the US
House of Representatives Committee on Foreign Affairs calling on the
GOJ to apologize. Through the efforts of Japanese Ambassador to the
US Ryozo Kato and others, PM Abe personally met with committee
members during his US visit in April to offer explanations regarding
the issue, and as a result, Director-General of the North American
Affairs Bureau Shinichi Nishimiya and others thought that the issue
had been put aside.

However, the placement of an ad in the Washington Post by Abe's
political ally Diet member Takeo Hiranuma, former Japanese
Ambassador to Thailand Hisahiko Okazaki, and others completely
changed the situation. As a result of the ad, Committee Chairman Tom
Lantos himself decided to support the resolution.

PM Abe's core group of confidantes, including Foreign Policy Bureau
Policy Coordination Division Director Nobukatsu Kanehara and
Executive Assistant Hajime Hayashi, have pushed for Abe's brand of
diplomacy which brandishes the "shared values" of the US and Japan.
As a result, Abe and those around him have exposed their weaknesses
in a most miserable manner.

SCHIEFFER

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