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Cablegate: Daily Summary of Japanese Press 11/30/07

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RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
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RUEHUL/AMEMBASSY SEOUL 6418
RUCNDT/USMISSION USUN NEW YORK 7179

UNCLAS SECTION 01 OF 11 TOKYO 005400

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 11/30/07

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Index:

(1) Japan-China economic dialogue to start tomorrow with aim of
producing effective results (Mainichi)

(2) Defense Minister Ishiba on the issue of opening the Aegis to
Chinese crewmembers: "It was not halted due to U.S. protest"
(Yomiuri)

(3) 3 MSDF officers to be indicted over Aegis info leaks (Sankei)

(4) Former Vice Defense Minister Moriya demanded allegiance in
appointing personnel (Asahi)

(5) Interview with Defense Minister Shigeru Ishiba -- Transparency
in defense equipment procurement must be increased (Yomiuri)

(6) Schwab reconstruction delayed to March or later (Okinawa Times)

(7) Japan must return supply ship to the Indian Ocean (Part D):
Yukio Okamoto (Sankei)

(8) JCP to cut candidates in next upper house election (Mainichi)

(9) Regulation on openings of large-scale stores in suburbs: Amended
Town Planning Law to be put into effect today (Mainichi)

ARTICLES:

(1) Japan-China economic dialogue to start tomorrow with aim of
producing effective results

MAINICHI (Page 11) (Full)
November 30, 2007

Takuya Otsuka, Beijing

The first high-level economic dialogue for key cabinet members of
Japan and China to discuss economic issues lying between the two
countries will kick off in Beijing tomorrow. As a stepping stone to
building a strategic, reciprocal relationship, the governments of
the two countries have attached importance to cooperation in the
areas of energy-saving, protecting the environment, and developing
energy resources. Given this agenda, the goal in the dialogue is
whether effective results can be produced. The dialogue also plays
the role of a herald for Prime Minister Yasuo Fukuda's planned visit
to China. As for a major political issue of the joint development of
gas fields in the East China Sea, both sides aim to break the
impasse at a foreign ministerial session.

China focuses on environmental issues

China views the high-level dialogue with Japan as an important
international conference like the Nov. 28 summit between the leaders
of China and the European Union and an upcoming economic dialogue
between the United States and China slated for mid-December.
Discussions with the U.S. and the EU, both of which suffer huge
trade deficits with China, focus on the appreciation of the yuan,
but when it comes to trade between Japan and China, the two
countries have kept a balance in trade. So, Beijing believes that no
major dispute would exist once such political issues as the one
related to historical perceptions are resolved.

TOKYO 00005400 002 OF 011

China's central aim of the dialogue with Japan is for the two
governments to build a system that will make Japanese firms'
energy-saving and environmental technologies and money available to
China so that China can deal with the worsening air pollution in the
country and be able to prevent desertification. That is why the
Chinese delegation to Japan is led by Vice Premier Zeng Peiyan.

Japan places high hopes on dialogue

Japan is more hopeful about the high-level dialogue than China.
China is the largest trade partner for Japan, and Japanese firms,
including small businesses, are advancing into the Chinese market.
Until last year, when Japan-China relations had been chilly,
European and American companies, thanks to their countries' top
leaders' summit diplomacy toward China, had received orders in
succession made by the Chinese government for its grand projects,
such as the construction of high-speed railway, and China bashed
Japanese products. Given these circumstances, a senior Foreign
Ministry official said, "Holding a high-level dialogue of key
cabinet members of the two countries in itself will have a favorable
effect on the Japanese economy."

Joint development of gas fields is challenge for Japan

However, the joint development of gas fields in the East China Sea
still remains a major political issue between the two countries.
Both sides are in fierce competition over the question of which
parts of the sea will be set aside for joint development. Among the
Japanese firms that have set up operations in China, some have
voiced strong dissatisfaction with China with one company official
complaining, "Protection of intellectual properties, which is a
premise for the transfer of technology, is insufficient (in China)."
The Japanese side intends to work on the Chinese side to have its
investment environment meet the international standards.

In the upcoming dialogue, the two countries will also exchange views
about how to cooperate on customs and the quarantine system in order
to secure the safety of foods and products, as well as about the
loan regulations applied by the Chinese government to banking
institutions, including foreign ones, in order to constrain
excessive investment. The Japanese side is expected to call on the
Chinese government to revalue the yuan in terms of preventing
economic overheating.

(2) Defense Minister Ishiba on the issue of opening the Aegis to
Chinese crewmembers: "It was not halted due to U.S. protest"

YOMIURI ONLINE (Full)
November 30, 2007

Defense Minister Ishiba, in a press conference after the cabinet
meeting this morning, denied that the inspection of an Aegis vessel
by visiting crewmembers of a Chinese naval ship was halted because
of a protest from the United States; "I think this was considered in
a number of offices in charge. I have not heard anything about the
opening of the ship being halted due to a U.S. protest."

He added: "Although what lies at the root of the matter is
confidence building measures (with the Chinese Navy), there is also
at the same time there is the matter of protecting secrets." He
indicated that in his view it was inappropriate to open the Aegis

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vessel to outsiders at this stage.

(3) 3 MSDF officers to be indicted over Aegis info leaks

SANKEI (Page 1) (Abridged)
November 30, 2007

A 33-year-old petty officer second class of the Maritime
Self-Defense Force's Escort Flotilla 1, an MSDF unit based in the
city of Yokosuka, Kanagawa Prefecture, took out data about an Aegis
ship's core system. In this incident, Kanagawa prefectural police
and the MSDF's shore police decided yesterday to file a criminal
case against three MSDF officers on the charge of violating a secret
protection law relating to the Japan-U.S. Mutual Defense Assistance
Agreement. The three include a 34-year-old lieutenant commander who
was then with a programming unit that created Aegis files. They are
alleged to have taken part in the leakage of data falling under the
category of defense secrets. The police are also investigating two
other MSDF members who got confidential information in the process
of such information leaks, with an eye to filing a criminal case
against them.

In addition to the lieutenant commander who was assigned to the
programming unit, a 43-year-old lieutenant commander, who was an
instructor at the MSDF's 1st Service School in the city of Etajima,
Hiroshima Prefecture, and a 49-year-old lieutenant, who was the
former instructor's colleague at the school, are suspected of having
violated the law.

(4) Former Vice Defense Minister Moriya demanded allegiance in
appointing personnel

ASAHI (Page 35) (Full)
November 30, 2007

It was an annual event to hear Takemasa Moriya's loud and hoarse
voice shouting in the administrative vice minister's office on the
11th floor of the Defense Agency.

"Why are you putting this person in this post?" "Put this man in
this post!"

According to a former senior agency official, Moriya was looking at
the list of names of "uniformed officers" subject to personnel
changes in the Self-Defense Forces (SDF), and division chiefs who
brought the list to Moriya were cowering in front of him, just
listening to him roar. Senior SDF officers submissively followed
Moriya's orders.

A source familiar with the Defense Ministry said that when Moriya
shuffled senior ministry officials, he scared defense bureaucrats,
and he was the one who forced the Naha Regional Defense Facilities
Administration Bureau chief and other senior officials out of their
posts.

A senior official at the time said with a disgusted expression: "The
only index for Moriya to use in appointing officials to key posts
was whether they would render devoted service to him." Moriya forced
his subordinate, who was regarded as a more likely candidate to
replace him as vice minister, out of the Defense Ministry. He then
served for four years -- an unusually long time -- in the
administrative vice defense minister's post. The same senior

TOKYO 00005400 004 OF 011


official stressed: "During his tenure as vice minister, the key
posts were occupied by yes-men."

Moriya given high marks with his decision to dispatch SDF to
quake-hit Hanshin areas

Moriya was born in 1944 in Miyagi Prefecture. He came from a
reputable family in Miyagi. His father served as mayor of Shiogama
City. He entered Tohoku University after graduating from a high
school in Sendai City. He joined the then Defense Agency in 1971
when an air of opposing changes to the Japan-U.S. Security Treaty
was still hanging over the town and when bureaucrats, who had bitter
tongues, still made fun of the Defense Agency, calling it "a
third-rate agency." At the time, it was said that entering the
Finance Ministry after graduating a college was the high road.
Moriya said: "I wanted to join the Finance Ministry but I failed to
do so because I was late for the ministry. So I entered the Defense
Agency."

On the morning of Jan. 17, 1995, when the Great Hanshin Earthquake
occurred, Moriya, who was Defense Policy Division director, asserted
that the agency should dispatch SDF personnel to the quake-hit areas
on its own decision.

The dominant view in the agency was, however, that if SDF personnel
went there before receiving requests from local government, it would
cause only confusion. The agency then sent them after receiving the
request from the governor of Hyogo Prefecture at 10:00 a.m. more
than four hours after the quake occurred.

The SDF was criticized for its delay in taking action. There was
heard such views in earthquake-hit areas: "We used to dislike the
SDF. But now, we are eternally grateful to them."

It was proved that Moriya's assertion was right. The agency then
changed its evaluation of Moriya.

Double promotion

In September 1998 then Central Procurement Office officials were
arrested for breach of trust and senior officials were replaced one
after another. With the shortage of talented officials in the
agency, Moriya was appointed as deputy vice minister in November
1998. The post was the window for managing Diet affairs and put him
in charge of personnel changes. He was promoted by two grades in
rank from director general of the Facilities Department of the
Defense Facilities Administration Agency (DFFA), without serving in
any bureau director's post.

One former Defense Ministry official said: "Moriya said to me that
he had been told by his superior on the phone, 'I could not
understand but you were appointed as deputy vice minister at the
request of my superiors.'"

Moriya had only two rivals when the vice-ministerial race entered
the last stage. One of his two rivals dropped out because his
response to the earthquake was criticized in a weekly magazine. The
other rival was replaced due to the formulation of a list of names
of those who requested information disclosure. As a result, Moriya
immediately became administrative vice minister.

However, there was a rumor that Moriya had set traps by leaking the

TOKYO 00005400 005 OF 011


two scandals. No one knows the truth of the rumor. The impression
was implanted among ministry personnel that Moriya was a horrible
person.

Moriya wrote in the monthly journal Gendai after he retired as vice
minister: "Needless to say, personnel assignments are extremely
important for the ministry. Whether the organization will survive or
die depends on personnel changes."

There was nobody who could offer frank advice to the big-name vice
minister, Moriya, the longest serving vice defense minister, who
abused his authority in making personnel assignments.

(5) Interview with Defense Minister Shigeru Ishiba -- Transparency
in defense equipment procurement must be increased

YOMIURI (Page 2) (Full)
November 30, 2007

In an interview with Yomiuri Shimbun, Defense Minister Ishiba
pointed out the need to study ways to secure transparency in
procuring defense equipment in order to eliminate defense
interests.

Elimination of defense interests

In the wake of the latest scandal, the ministry has begun such work
as confirming trading houses' estimates with manufacturers before
importing defense equipment. We will have to discuss ways to build a
defense equipment procurement system that is transparent and open.

For instance, we have six models as candidates for the Air
Self-Defense Force's next-generation mainstay combat aircraft (FX).
The discussion for determining the winning model would lead to
debating Japan's national security. That is because the discussion
must turn into work to envisage the security environment surrounding
Japan 10 years, 20 years from today and determine based on it what
the new aircraft must be able to perform.

To that end, we need to set the stage for conducting discussion that
is as open as possible based on a thorough knowledge. In connection
with the Lockheed scandal in the past, suspicions were reported
regarding the procurement of the P-3C patrol aircraft for the
Maritime Self-Defense Force (MSDF). If discussions are conducted
openly based on the security environment regarding such factors as
desirable models and the number of aircrafts, suspicion would not
surface that the procurement of defense equipment is connected with
certain lawmakers.

Transparency can be secured by making the discussion process open.
At the same time, defense equipment naturally requires a certain
degree of secrecy. The system must be built while taking those
factors into account.

Organizational reform

The structure of the Defense Ministry is huge and complex, and some
parts are malfunctioning. They must be reviewed. The MSDF
underreported the amount of oil provided to a U.S. oiler by its
supply ship in the Indian Ocean. I think it was a typical case of
malfunction. There are all sorts of theories, such as that the
internal bureaus were aware of the correct amount or that there was

TOKYO 00005400 006 OF 011


a gap in information between the defense and equipment systems. The
bottom line is that we consider a system that can properly assist
the "amateur" minister.

I, too, used to think that bureaucrats should assist the minister in
formulating the budget and legislation and SDF officers in dealing
with highly specialized military matters -- as two wheels of a cart,
so to speak. My theory was based on the notion that the two wheels
can function properly. This is going to be a grand reform that will
take 10 years, but a balanced existence of uniformed and
non-uniformed officers would be ideal from a viewpoint of someone
using the organization.

Civilian control

How political control, or civilian control, should work is a vital
question. The Defense Ministry and the Self-Defense Forces make up a
huge organization with 270,000 personnel. The system is designed to
allow the lawmakers elected by the people to control the
organization. The Defense Ministry has yet to mark one year, and I
am already the fourth minister. The tenures of the ministers before
me were unusually short in comparison to those in other major
powers. I must say that such a situation created conditions for the
vice defense minister to have tremendous power.

Although this is a national matter, legislators must first of all
make efforts to enhance their knowledge of diplomacy, security, the
Constitution, and finances. It is said that diplomacy and defense do
not yield votes, and the essence of defense had not been discussed
in the party until recently. If this situation persists, legislators
are ineligible for civilian control.

Lastly, I would like all SDF personnel to think of their motives for
having joined the Defense Ministry and SDF and their sense of
responsibility and mission that are essential in performing their
duties.

(6) Schwab reconstruction delayed to March or later

OKINAWA TIMES (Page 2) (Full)
November 30, 2007

Along with the planned construction of an alternative facility for
the US Marine Corps' Futenma Air Station in Okinawa Prefecture, the
Defense Ministry's Okinawa bureau had plans for December to set
about removing and rebuilding billets, management quarters,
warehouses, and other facilities existing on Camp Schwab in the
prefecture's northern coastal city of Nago. However, the on-base
reconstruction is likely to be delayed to March next year or later,
officials said yesterday. The local defense bureau initially planned
to have contractors finish design work by the end of November.
However, the bureau extended this time limit to the end of February
next year. "It takes time to coordinate with U.S. forces on
designs," a Defense Ministry official explained.

Futenma airfield will be relocated to a coastal area of Camp Schwab.
Near the relocation site are warehouses, workshops, management
quarters, and other facilities. These existing facilities will be
removed and rebuilt in an inland area of Camp Schwab along with the
construction of an alternative facility for Futenma airfield.

In March this year, the Okinawa Defense Bureau held bidding for

TOKYO 00005400 007 OF 011


designs related to the reconstruction of buildings, facilities, and
civil engineering systems on Camp Schwab. At the same time, the
bureau held bidding for designs needed to construct new buildings
and civil engineering systems, including billets for noncommissioned
officers. The bureau entered into contracts to be implemented by the
end of November.

Concerning when to set about the reconstruction of existing
facilities, the Defense Ministry indicated that the work would
likely be delayed to March next year or later. "We can't start the
work until the design work is done," a ministry official said.
"After design work," the official added, "we'd like to start the
work in an appropriate way."

The Defense Ministry created a work schedule for the project of
constructing an alternative facility for Futenma airfield. It
specifies a schedule to start the construction of billets and other
buildings in December.

(7) Japan must return supply ship to the Indian Ocean (Part D):
Yukio Okamoto

SANKEI (Top play and Page 3) (Excerpts)
November 28, 2007

Tragedy of Oku

To begin with, Japan does not have a system to guard Japanese
nationals overseas. When I was serving as prime ministerial adviser
on Iraq issues, I extensively traveled Iraq along with counselor
Katsuhiko Oku (posthumously promoted to the post of ambassador). As
was seen from the fact that Oku was attacked by terrorists and died
a tragic death in 2003, the mission was not safe.

That is why the commander of the Polish forces responsible for the
security operations in the southern part of Iraq had always made
arrangements for a platoon to escort us when we traveled around the
southern part so that terrorists would not attack us. We were safe
in the southern part.

The situation was different in the northern part under the control
of the U.S. forces. Their standpoint was: "We were on a different
mission. Foreign government officials should be protected by their
own troops." Guarding Japanese nationals abroad is not a duty of the
Self-Defense Forces. There were naturally no escorts while we were
in the northern part.

There are dozens of embassies in Baghdad today. As far as I know
they are all basically protected by their own troops except for one:
the Japanese Embassy. Japan has to rely on Iraqi people and foreign
guards.

The SDF is a group of trained troops with high moral standards. The
problem is not the individual troops. In the Japanese society that
espouses complete equality, it is not envisaged that a group of
Japanese individuals (SDF) would shield another group of individuals
(embassy officials) by putting them in harm's way.

Under such circumstances, can the Democratic Party of Japan dispatch
SDF troops and a police unit to escort the Japanese experts taking
part in the PRT? Contending that Japan will send experts but asking
other countries to guard them because such mission is too dangerous

TOKYO 00005400 008 OF 011


would be a double disgrace.

Or, is it going to try to settle the matter with money for civilian
assistance as usual? What is necessary in Afghanistan is not money
but people performing their duties by risking themselves.

Need to look at the big picture

The Japanese Diet is looking at the matter from a narrow
perspective. Deliberations went on and on, accusing the government
for the possible diversion of part of Japanese oil for use in the
Iraq operation. Other countries officially denied any diversion of
Japanese oil.

Realistically speaking, it is impossible to track down the oil added
by the Japanese supply ship because it must have mixed into the oil
that was in the tank of the receiving vessel in the first place.
Even if there was diversion at an early stage, the amount was
probably minute.

Still unconvinced, the opposition bloc made the United States
produce 300,000 pages of ships' logbooks and other documents to
prove it. They were eager to pursue Japanese oil even to its last
drip. Overwhelmed by Japan's demand, the United States produced
voluminous data in the hope that Japan would continue its refueling
operation. But the opposition camp was against continuing the
refueling operation from the beginning. The whole thing was intended
to drive the government to a dead end.

The countries taking part in the operations in the Indian Ocean have
suffered large numbers of casualties in ground operations.

For instance, Canada has lost 71 lives. Yet the country is still
taking part in ISAF and is also carrying out surveillance activities
in the Indian Ocean, sending vessels there. Why does the Japanese
Diet not think of it? Other countries are disgusted at the Japanese
Diet that is fiercely pursuing the destination of every liter of
Japanese oil. They want to see the Japanese troops take risks with
them on the ground.

(8) JCP to cut candidates in next upper house election

MAINICHI (Page 1&2) (Full)
November 26, 2007

The Japanese Communist Party will substantially reduce its
candidates to be fielded in the next election for the House of
Representatives. This course of action is now creating a stir. That
is because the JCP's votes, which will have nowhere to go in vacuum
constituencies, will greatly affect the election in its outcome if
they go to the leading opposition Democratic Party of Japan
(Minshuto). The JCP's cutback in its candidates for the election
could result in uniting the DPJ and the JCP in these blank
constituencies against the ruling Liberal Democratic Party's
electoral alliance with New Komeito.

The JCP, which initially aimed to field candidates in all of the
nation's single-seat constituencies, enunciated a bold change of
course. JCP Chairman Kazuo Shii clarified that the JCP would field
its candidates in electoral districts where the party gained 8
PERCENT or more of the votes for proportional representation in
this July's election for the House of Councillors. In addition, Shii

TOKYO 00005400 009 OF 011


also said the JCP would aim to field a candidate in at least one of
each prefecture's single-seat constituencies where the JCP failed to
reach the 8 PERCENT line. To follow this yardstick, the JCP is to
field candidates in 134 constituencies, according to the Mainichi
Shimbun's findings. The remaining 166 constituencies are blank for
JCP candidates.

The biggest reason for such a change of course is the JCP's money
matter. In the last election held in 2005 for the House of
Representatives, the JCP ran candidates in 275 electoral districts.
However, none of the JCP's candidates was elected in the nation's
single-seat constituencies. The JCP's share of the votes did not
reach 10 PERCENT in 223 electoral districts, and its deposit of 669
million yen was forfeited.

The JCP's cutback in its candidates is ascribable to its financial
circumstances. This, however, created a big political spin-off.
"Those who voted for the JCP will not cast more votes for the LDP
than those for the DPJ," says one of the DPJ's executives. One of
the LDP's election committee also voiced a growing sense of crisis,
saying: "JCP supporters overwhelmingly want the ruling parties to
lose their majority. I suppose they don't want to waste their votes.
In that sense, at least 70 PERCENT of them will vote for the DPJ."

The JCP was critical of both the LDP and the DPJ and played up its
originality. After this summer's House of Councillors election,
however, the JCP began shifting to an anti-LDP and anti-Komeito
stance. Shii told his aides that he would not put the LDP and the
DPJ in the same category.

On Nov. 18, Osaka City elected its new mayor. According to the
Mainichi Shimbun's exit poll, more than 10 PERCENT of JCP
supporters did not vote for the JCP-recommended candidate and cast
their votes for the DPJ-recommended candidate who won the mayoral
race. "They backed the anti-LDP, anti-Komeito candidate," a JCP
executive said.

However, there is a move to create a permanent law, instead of
making ad hoc laws, to send the Self-Defense Forces on overseas
missions. The question is how the DPJ will handle this issue. In
addition, the LDP and the DPJ may reignite their initiative to form
a grand coalition. Then, JCP supporters may think the DPJ is also
the same kind as the LDP. This will also affect their voting
behavior.

"Our supporters will decide to cast blank votes or otherwise to vote
for the DPJ," a JCP executive said. "That depends on our party's
attitude we will show to the DPJ right before the election," the
executive added.

Where will JCP's adrift votes go in next election for upper
chamber?

How will the JCP's planned substantial cutback in its candidates
affect the next election for the House of Representatives? To probe
its trend, the Mainichi Shimbun simulated three cases, based on the
results of this July's House of Councillors election for
proportional representation. The first case is that all JCP votes
are added to DPJ candidates in electoral districts where the JCP
will field no candidates. The second case is that one half is added
to DPJ candidates in these districts. And the third case is that no
JCP votes are added to DPJ candidates there. In the first case, the

TOKYO 00005400 010 OF 011


DPJ wins a single-party majority. In the second case, both the LDP
and the DPJ fail to secure a majority. In this case, both the JCP
and the Social Democratic Party (Shaminto) will hold a casting
vote.

Case 1: All added

At the time of this July's election for the House of Councillors,
the JCP gained 8 PERCENT or more of the votes in a total of 106
constituencies in 19 prefectures, including Tokyo and Hokkaido. In
the remaining 28 constituencies, the JCP's share of the votes did
not reach 8 PERCENT . However, the JCP is going to run a candidate
in at least one of each prefecture's constituencies where the party
failed to garner 8 PERCENT of the votes. Accordingly, the JCP will
field candidates in a total of 134 constituencies and will run no
candidates in the remaining 166 constituencies.

The scenario in this case is that the DPJ runs candidates in the
nation's 300 single-seat constituencies, and that all of the votes
garnered by the JCP in these JCP-vacated constituencies are added to
the DPJ. As a result, the LDP and New Komeito garner a total of 210
seats, including those for proportional representation. Meanwhile,
the DPJ adds up to 255 seats. This figure means that the DPJ wins a
single-party majority in the Diet's lower chamber. For the DPJ, this
is the "best thing" in DPJ President Ichiro Ozawa's words, and the
DPJ replaces the LDP-led government. In the breakdown of seats for
other political parties, the JCP garners a total of 10 seats, with
the SDP gaining 4 seats and the People's New Party (Shinto Nippon)
at 1 seat. They only secure seats for proportional representation.

Case 2: A half added

Among JCP supporters, there are also some people who are critical of
the DPJ, saying the DPJ is basically the same as the LDP. Then, the
Mainichi Shimbun also simulated the case where the DPJ gets only a
half of the votes that went to the JCP.

In this case, the LDP-Komeito coalition gains a total of 227 seats,
with the DPJ at 238. This means that neither the ruling coalition
nor the DPJ reaches a majority (241). The casting vote is in the
hands of the JCP with 10 seats and the SDP with 4 seats.

In terms of figures, the DPJ can take the reins of government if the
SDP cooperates with the DPJ in Diet nomination for prime minister.
This is the "second best thing" in Ozawa's words. However, the DPJ
and the SDP total 242, up only one from the majority. It is also
well conceivable that the total number of seats for the two parties
do not reach the majority by a slight margin. In this case, the JCP
is the only party to hold the casting vote.

Case 3: No votes added

In case the JCP's votes are not added to the DPJ at all, the LDP and
New Komeito secure a total of 244 seats, with the DPJ at 221. The
LDP-Komeito coalition can barely remain in office. However, in this
case as well, the ruling coalition is up only three seats from the
majority. Its government becomes unstable.

The ruling coalition fails to maintain two-thirds of the seats in
the House of Representatives. If a bill is voted down in the
opposition-dominated House of Councillors, the ruling coalition
loses its trump card to take a vote again on it in the House of

TOKYO 00005400 011 OF 011


Representatives for its passage.

(9) Regulation on openings of large-scale stores in suburbs: Amended
Town Planning Law to be put into effect today

MAINICHI (Page 10) (Almost full)
November 30, 2007

The amended Town Planning Law, which in principle bans openings in
the suburbs of large-scale customer-drawing outlets, such as
supermarkets, is to be put into force on Nov. 30. The amendment of
the law this time is one of the three town-building laws aimed at
revitalizing downtown areas. The government aims at stopping
neighborhoods in provincial cities from drying up. The
implementation of such a law will likely affect large-scale shopping
center operators' strategy to open new outlets. However, whether
traditional shopping districts will become revitalized as the
government wishes is unclear.

The amended Town Planning Law restricts the new openings of stores,
restaurants and movie theaters whose total floor space exceeds
10,000 square meters to three areas, such as a commercial area close
to a city center. The government will regulate the openings of large
shopping centers at plots of land vacated by factories in the
suburbs under the amended Town Planning Law. It will also help local
governments' efforts to revitalize downtown areas using the amended
Downtown Area Revitalization Law, which was put into force in August
2006, as the driving force.

Following the scrapping in 2000 of the Large-Scale Retail Store Law,
which had regulated the openings of large stores, the retailing
industry has opened large shopping centers in the suburbs. Though
revising such a strategy appears unavoidable, leading retailers have
already undergone coordination with local governments over the
openings of new stores, foreseeing the amendment of the law. Aeon
Mall, Aeon's subsidy, already has a plan to open over the next three
years 15 shopping centers with floor areas exceeding 10,000 square
meters. Ito-Yokado also noted that the company has no plan to revise
its store-opening plan for the time being. It is also possible to
open stores even in the three regulated areas, if concerned local
governments agree to change the use of land. The retailing industry,
therefore, is promoting a campaign to have the openings of large
stores incorporated into local governments' redevelopment plans.

However, it will be unavoidable for retailers to change their
store-opening strategies over the long term. They will likely open
more small shopping centers or food supermarkets with floor areas of
10,000 square meters or smaller in downtown areas. They are also
expected to look into the possibility of opening stores in
unregulated areas, such as areas near highway interchanges.

Opening stores in downtown areas is hardly cost effective due to
soaring land prices. Another concern is that random openings of
small shopping stores with floor area of 10,000 square meters or
smaller in the suburbs after the enforcement of the law could give
rise to traffic congestion.

SCHIEFFER

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