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Cablegate: Japanese Morning Press Highlights 12/03/07

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UNCLAS SECTION 01 OF 12 TOKYO 005410

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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: JAPANESE MORNING PRESS HIGHLIGHTS 12/03/07


Index:

1) Annual Cabinet Office poll finds over 20 PERCENT of Japanese
seeing relationship with US no longer in good shape but friendly
public mood toward China is rising (Yomiuri)

Defense scandals:
2) Armitage took over 100 million yen in consultant fees from Yamada
Corp., including while he was serving as deputy secretary at State
Department (Sankei)
3) Tokyo prosecutors turning Defense Ministry scandal investigation
next to Okinawa base realignment suspicions, plan to question senior
officials (Asahi)
4) Six million yen from shady defense contractor went into the bank
account of the wife of former Vice Defense Minister Moriya (Tokyo
Shimbun)
5) Cancellation of DPJ demand that former defense chief Nukaga
testify in Diet on ties with shady defense contractor is a setback
for party's political strategy (Yomiuri)

Defense issues:
6) Defense Minister Ishiba determined to revise defense procurement
system, rooting out practice of relying on trading firms for
everything (Sankei)
7) Deliberations start in Upper House committee tomorrow finally on
MSDF refueling authorization bill (Tokyo Shimbun)

8) ASDF top brass to visit Middle East, including Kuwait, where ASDF
stationed (Akahata)
9) Ishiba on TV says government considering shrinking the mid-term
defense buildup plan (Tokyo Shimbun)
10) Joint U.S.-Japan wartime command was set up at Yokota Air Base
last Feb. with little fanfare (Akahata)
11) Worry that strikes by Japanese workers at US bases will disrupt
functions (Yomiuri)
12) 11,000 demonstrators protest in Iwakuni against bringing in
carrier-based jets from Atsugi (Akahata)
13) DPJ becoming increasingly cautious about party head Ozawa's
proposed participation in ISAF activities in Afghanistan (Yomiuri)


14) US sets up three more hurdles for North Korea if it expects its
name to be removed from list of states sponsoring terrorism
(Yomiuri)

China ties:
15) High-level economic meeting between Japan, China issues joint
statement that focuses on protection of intellectual property and
cooperation on the environment (Nikkei)
16) Yen loans to China to officially end by mutual agreement (Asahi)

17) Japan, China agree to decide on joint gas-field development
scheme before Prime Minister Fukuda visits Beijing (Asahi)
18) High-level economic dialogue between Japan, China stresses
environment, energy conservation (Asahi)
19) Japan agrees to export 150 tons more in premium rice to China
(Yomiuri)
20) Democratic Party of Japan (DPJ) President Ozawa to visit China
(Tokyo Shimbun)

Articles:


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1) Poll: "Japan-U.S. ties not in good shape" tops 20 PERCENT for
1st time; "Japan-China ties in good shape" up 4.7 points

YOMIURI (Page 2) (Full)
December 2, 2007

The proportion of Japanese people who think that Japan's relations
with China and South Korea are in good shape increased from a year
ago, while there was an increase in the proportion of those who do
not think Japan-U.S. relations are in good shape, according to the
Cabinet Office's public opinion survey released yesterday on Japan's
foreign relations. Such results can be taken as reflecting the fact
that there has been progress in exchanges between Japanese leaders
and Chinese leaders, as well as with South Korean leaders, while
there are many pending issues between Japan and the United States,
such as delisting North Korea as a terror sponsor, recalling the
Maritime Self-Defense Force from its refueling mission in the Indian
Ocean, and importing U.S. beef.

The survey has been conducted annually since 1975. The survey this
time was conducted in October on a total of 3,000 men and women aged
20 and over across the nation. The retrieval rate was 58.6 PERCENT
.

Respondents were asked if they thought Japan-U.S. relations were in
good shape. In response to this question, 76.3 PERCENT answered
"yes," showing a decrease of 6.4 percentage points from the last
survey. Meanwhile, those who answered "no" accounted for 20.4
PERCENT , up 8.8 points. The proportion of negative answers topped
20 PERCENT for the first time since 1998, when the question was
changed to what it is now.

The proportion of those thinking Japan-South Korea relations are in
good shape was 49.9 PERCENT , showing a substantial increase of 15.5
points. Meanwhile, those who do not think so accounted for 45.1
PERCENT . The proportion of affirmative answers topped that of
negative answers for the first time in three years.

Asked about Japan-China relations, "yes" accounted for 26.4 PERCENT
, up 4.7 points, and "no" at 68.0 PERCENT , down 2.7 points.

2) Armitage took over 100 million yen in consultant fees from Yamada
Corp., including while he was serving as deputy secretary at State
Department

SANKEI (Top play) (Excerpts)
December 1, 2007

It was learned on Nov. 30 that the U.S. affiliate of the defense
trading firm Yamada Yoko Corp. provided over seven years a total of
$1 million (approximately 110 million yen) in consulting fees to
former US Deputy Secretary of State Richard Armitage and his firm.
Even while Armitaqe was service as deputy secretary the funds
continued to arrive. The situation now revealed shows that Motonobu
Miyazaki, the now arrested former executive director of Yamada Corp.
who lavishly wined and dined an provided money to defense officials
and politicians in Japan, also used huge sums of money in the U.S.
to create channels to U.S. government officials.

According to an informed source, in an internal corporate
investigation of the current management staff of Yamada Corp.,
expenditure records were discovered showing consultation fees after

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1999 ( to Armitage), according to the U.S. affiliate, Yamada
International Corp. The destination of the funds were over 10 firms
each year, but most of the money went to firms related to
individuals connected with the State Department, Pentagon, and
Republican Party.

Among them, the money that went to Armitage Associates, the
consulting firm founded by Armitage, annually ranged from
approximately $50,000 to $120,000, or reaching a total of $570,000.
Reportedly, all of this money seemed to be outlays based on formal
consulting contracts, with the large outlays coming after 1998.

Armitage established his consulting firm Armitage Associates in
1993, when he became an adviser to the Pentagon. He served in the
Bush administration from March 2001 to January 2005. After that, he
established another consulting firm, Armitage International.

Armitage International telephoned by this newspaper would not
comment on the story.

3) Special prosecutors squad questioning as witnesses senior Defense
Ministry officials on realignment of U.S. forces in Okinawa

ASAHI (Top play) (Excerpts)
December 3, 2007

As part of investigations into the bribery case involving former
Administrative Vice Defense Minister Takemasa Moriya (63), who has
been already arrested, a special investigative team from the Tokyo
District Public Prosecutors Office is questioning as witnesses
several Defense Ministry officials concerned, including a counselor
in charge, about the details of the U.S. forces' realignment
projects, including the relocation of the U.S. Marine Corps Futenma
Air Station in Okinawa Prefecture, officials involved revealed. The
defense trading firm Nihon Mirise Corp., which was established in
September 2006 by former defense contractor Yamada Corp. executive
Motonobu Miyazaki (69), who has been already re-arrested on charges
of bribery, was found to have been attempting to enter into planned
realignment projects in Guam and other locations. The special
investigative team is reportedly investigating into defense
interests involving Okinawa, such as whether Moriya gave special
treatment in connection with realignment projects.

The special prosecutors' squad began questioning as witnesses
Defense Ministry officials on the active list and former ministry
officials from Nov. 13. The squad is investigating whether there
were cases of Moriya providing special treatment to the defense
trading firm for the ministry's procurement of equipment.

According to the sources, the defense counselor in charge of the
U.S. forces realignment projects has already been questioned several
times by investigators and has been subject to intensive
investigations about the projects. This counselor reportedly plays a
leading part in advancing a project for constructing housing at the
expense of the Japanese government in connection with the transfer
of 8,000 marines from Okinawa to Guam, as well as a project for the
relocation of the Futenma airfield (in Ginowan City, Okinawa).

Another defense official was reportedly questioned about the
interests of Okinawa's local industries over such projects as the
relocation of the Futenma airfield.


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Nihon Mirise is alleged to have aimed at concluding a subcontractor
contract with a U.S. general contractor who received a contract on
the base construction work projects, for instance, in Guam, and
working as a construction consultant. According to a Nihon Mirise
official, the company signed an interim contract with the general
contractor. Under the contract, Nihon Mirise reportedly expected to
be given the right to select a surveying firm and a waste disposal
service in connection the construction of base facilities and to
earn a total of 10 billion yen from the construction projects
involving several bases.

It was also found that in order to get information about new
projects planned for U.S. bases in the Pacific region in line with
the US military transformation, Miyazaki used slush funds of Yamada
Corp. to wine and dine high-level U.S. officials and former
officials from the Department of Defense and the Department of
State, when they were visiting Japan. Reportedly, Moriya sometimes
joined them.

4) Former Yamada Corp., executive found to have transmitted 6
million yen more to bank account of Moriya's wife

TOKYO SHIMBUN (Top Play) (Excerpts)
December 3, 2007

Motonobu Miyazaki (69), former executive director of defense
contractor Yamada Corp., sent more than 6 million yen to former Vice
Defense Minister Takemasa Moriya (63) in 2004, informed sources said
yesterday. Miyazaki has been rearrested for giving bribes to Moriya,
and Moriya was arrested for doing favors for Miyazaki in return.
According to the special investigation squad of the Tokyo District
Public Prosecutors Office, Miyazaki said during questioning: "The
full amount was immediately returned (by Moriya)." Prosecutors are
carefully investigating the newly found case, suspecting that the
remittance was a bribe.

It has already been shown that a total of more than 3 million yen
had been transmitted to the bank accounts of Sachiko (56), Moriya's
wife, and his second daughter from the slush funds of Yamada
International Corporation, Yamada Corp's U.S. subsidiary.

5) DPJ suffers a setback, unable to obtain unanimous decision,
cancels plan to summon Nukaga to testify before the Upper House;
With JCP bolting decision, joint struggle by the opposition camp has
cracked (Yomiuri)

YOMIURI (Page 4) (Excerpt)
December 1, 2007

With the cancellation of the plan to summon Finance Minister Nukaga
to testify as a sworn witness before the Upper House Fiscal and
Finance Committee, the Democratic Party of Japan (DPJ) has received
a set back in its strategy. The party has received a shower of
criticism from the opposition camp for breaking with the tradition
of requiring a unanimous approval for summing witnesses by deciding
to go with a majority decision instead. Cracks have opened up in the
joint struggle (against the ruling camp) by the opposition parties.

6) Defense Ministry to improve imports procurement department;
Defense minister to review trading house-oriented system

SANKEI (Page 1) (Excerpts)

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December 3, 2007

The Ministry of Defense (MOD) decided yesterday to increase the
number of officials responsible for importing defense equipment. The
step follows the revelation of the defense contractor Yamada Corp.'s
irregularities over the procurement of defense equipment, such as
aircraft, in connection with the bribery case involving former
Administrative Vice-Defense Minister Takemasa Moriya. MOD eyes a
system in which it can independently collect information on the
performance and prices of defense equipment, which has been left to
trading houses, and directly negotiate with foreign manufacturers.
Defense Minister Shigeru Ishiba will raise problems at the inaugural
meeting of a panel of experts on MOD reform, to be held today by the
government.

Appearing yesterday on Fuji-TV's Hodo 2001, Ishiba said: "The part
that has been left entirely to trading firms must be corrected, and
the number of personnel at the procurement department must be
increased. Given the fixed number of personnel, other parts must be
reduced."

MOD and the Self-Defense Forces have some 3,000 personnel
responsible for obtaining defense equipment. Of them, about 600
belong to the Equipment Procurement and Construction Office
responsible for procuring equipment, including imports. In addition,
only several liaison officials are stationed in the United States.
In contrast, such countries as the United States, Britain, and
France that do not allow the intervention of trading houses have
independent procurement systems staffed with tens of thousands of
personnel.

Ishiba intends to review the MOD and SDF to improve the procurement
department without increasing the total number of personnel so as
not to be criticized as bloated.

7) Upper House to start substantial deliberations on new refueling
legislation tomorrow; Fierce battle between ruling and opposition
camps expected

TOKYO SHIMBUN (Page 2) (Full)
December 3, 2007

The House of Councillors Foreign Affairs and Defense Committee will
begin on Dec. 4 substantial deliberations on a new antiterrorism
special measures bill for resuming the Maritime Self-Defense Force's
refueling mission in the Indian Ocean following a
question-and-answer session with the participation of Prime Minister
Yasuo Fukuda. Diet testimony by Finance Minister Fukushiro Nukaga,
slated for today, has been called off because the major opposition
Democratic Party of Japan (DPJ or Minshuto) gave up on it. The
ruling coalition is aiming to elect the new legislation before the
current Diet session closes on Dec. 15. A fierce battle is expected
between the ruling camp and the opposition bloc, which intends to
shelve or kill the bill.

The committee, which meets on Tuesdays and Thursdays in principle,
has only four days, including Dec. 4, to discuss the legislation
before the closure of the current Diet session. Even if the
committee discuss the bill for six to seven hours a day, that would
still not add up to the House of Representatives' 40 hours.

With fewer seats than the Lower House, the upper chamber usually

TOKYO 00005410 006 OF 012


spends 70-80 PERCENT of the Lower House's deliberation time on a
bill. Nevertheless, the DPJ, aiming to postpone taking a vote on the
bill, is demanding deliberation time on par with the Lower House.
The opposition holds a majority in the committee and the committee
chairman is a DPJ member. In short, the opposition bloc has the
upper hand running the committee.

Meanwhile, the ruling camp is insisting on holding
question-and-answer sessions on days other than Tuesdays and
Thursdays as well. Prime Minister Fukuda instructed on Nov. 30 LDP
Secretary General Bunmei Ibuki to press the DPJ so that the Upper

SIPDIS
House will take a vote on the legislation by Dec. 15. The ruling
camp is set to continue demanding a vote be taken before the end of
the current Diet session.

In the event the Upper House fails to take a vote by Dec. 15, the
government and ruling bloc need to take a second vote in the Lower
House by re-extending the Diet session. In such a case, chances are
high that the opposition camp will submit a censure motion against
Prime Minister Fukuda that will clear the Upper House and the prime
minister will in turn dissolve the Lower House for a snap general
election.

8) ASDF top brass to visit Middle East

AKAHATA (Page 2) (Full)
December 1, 2007

Toshio Tamogami, chief of staff of the Air Self-Defense Force, the
head of all ASDF personnel, met the press yesterday and clarified
that he would visit Kuwait and other Middle East countries on a Dec.
3-7 schedule. The ASDF top brass officer will visit Kuwait-based
ASDF troops tasked with airlift services to and from Iraq under the
Iraq Special Measures Law. He will also meet with high-ranking
officers from the armed forces of other countries.

9) Ishiba to consider midterm defense buildup budget cutback

TOKYO SHIMBUN (Page 2) (Full)
December 3, 2007

Defense Minister Shigeru Ishiba, appearing on an NHK-TV talk show
aired yesterday, clarified that he would consider scaling back on
the midterm defense buildup plan totaling over 24 trillion yen for
the period of five fiscal years from 2005 to 2009. "We will have to
eliminate the portion that is being wasted," Ishiba said. "We must
have the courage to say we don't need equipment we don't need," he
said, adding, "There's no point in just having something for the
sake of having it."

The current midterm defense buildup plan was adopted in a cabinet
meeting in December 2004 and is to be reviewed within three years'
time as needed. In this connection, Natsuo Yamaguchi, chair of New
Komeito's Foreign Affairs and Security Research Commission,
suggested the need for the government to review defense equipment,
including the Air Self-Defense Force's follow-on cargo aircraft
(CX). "We need to review them all to check if it's appropriate to
procure them," Yamaguchi noted.

10) Japan-U.S. joint war command established at Yokota in Feb. last
year


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AKAHATA (Page 2) (Abridged)
December 1, 2007

Japan and the United States have now established a bilateral joint
war command under an intergovernmental agreement on realigning the
presence of U.S. forces in Japan. The joint war command, which is
called the Bilateral Joint Operations Coordination Center or BJOCC
for short, was set up in February last year at the U.S. Air Force's
Yokota Base that straddles the city of Fussa and other western Tokyo
municipalities. The BJOCC has already gone operational. This fact
was revealed by U.S. Forces Japan in June this year. However, there
was no knowing when the BJOCC was established.

In point of fact, the BJOCC's establishment is a grave move since it
means placing the Self-Defense Forces under the U.S. military's
command and will lead to unconstitutional participation in
collective self-defense.

The Japanese and U.S. governments are aiming to step up USFJ-SDF
integration in the process of realigning the U.S. military presently
in Japan. One of the keys to such integration is the BJOCC, which is
a USFJ-SDF joint command. In October 2005, the Japanese and U.S.
governments agreed to set it up at Yokota base.

The BJOCC was installed at an underground facility of USFJ
headquarters at the U.S. Yokota Air Base and went into operation
when Japan and the United States conducted bilateral joint command
post exercises (CPX) in February last year, according to the Nov. 17
issue of the Stars & Stripes, a newspaper published for US forces.
The BJOCC also responded to North Korea's missile launches in July
last year. It is operated around the clock with up to 150 personnel
posted there in 12-hour rotation. It was also used for bilateral
joint field training exercises conducted in November.

11) All Japan Garrison Forces Labor Union's strike may affect
Japan-U.S. relations, including smooth management of US bases

YOMIURI (Page 4) (Full)
December 3, 2007

The All Japan Garrison Forces Labor Union's second round of strikes
on Nov. 30 affected the management of U.S. bases across the country.
This labor union consists of Japanese workers at the U.S. bases in
Japan. The Ministry of Defense (MOD) is increasingly concerned about
a possible impact on future negotiations with the United States on
the host nation support (or the so-called sympathy budget) under the
Japan-U.S. Status of Forces Agreement (SOFA).

According to the labor union, every base worker went on strike for
eight hours. Given that the U.S. military facilities operate 24
hours in shifts, this strike in effect meant that the bases were out
of operation 24 hours. A senior labor union member said,
"Non-unionized members also acted together, so almost all workers
(the total number of workers is 25,000 or so persons) took part in
the strike." The strike forced shops and restaurants at bases across
the country to close their businesses. Repair work on vessels was
also suspended, affecting base management.

Ahead of the renewal of the SOFA, which is to expire in next March,
the MOD has suggested to the labor union a cut in the special
allowances for the Japanese workers. This cut will not affect the US
side, but the labor union, which will be the victim of cost-cutting,

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is strongly opposed to such a budget cut.

If negotiations run into difficulties in the days ahead, the labor
union intends to again go on a 24-hour strike, this time lasting for
three days from Dec. 12 to 14. A senior DOD official expressed
concern about a possible ill effect on Japan-US relations, noting,
"If the planned strike has a much more serious impact, the United
States would raise an objection to Japan's proposed cut in the
special allowances."

12) 11,000 people take part in Iwakuni protest against government's
step toward city's opposition to US carrier-based air wing
relocation

AKAHATA (Top play) (Excerpts)
December 2, 2007

"We are angry with the government's steps," shouted the
demonstrators holding a piece of paper that bore the kanji for
"anger." This scene when 10,000 people rallied at the Kintai Bridge
against the government's policy on Dec. 1 in the city of Iwakuni,
Yamaguchi Prefecture. Over 11,000 people took part in the event,
according to the executive committee. The rally was held to protest
the government's decision to reduce subsidies to the city, which is
opposed to the deployment of a US carrier-based air wing (to Iwakuni
Air Station).

The rally brought together people from across Yamaguchi as well as
from such regions as Kyushu, Shikoku, and Kansai. In addition to the
paper reading "anger," some people were wearing signboards reading,
"The government must keep its promises," or "What's wrong with our
refusal of the US carrier-based aircraft?"

Mayor Katsusuke Ihara harshly criticized the government, declaring:
"The sudden decision to cut the subsidies for building a city hall
is something that must not be done by the people's government. This
does not concern Iwakuni alone. It is about defending local autonomy
and democracy; it can happen anywhere. In order to defend the
citizens to the last, let us achieve new democracy with our own
hands."

13) DPJ's Hatoyama: Need to cautiously discuss ISAF participation
(Yomiuri)

YOMIURI (Page 4) (Full)
December 1, 2007

Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama,
commenting on Nov. 30 on the proposal by DPJ President Ozawa that
Japan should participate in ISAF, the International Security
Assistance Force in Afghanistan, stated: "(The DPJ) cannot come up
with a complete reply as to whether such participation would violate
the Constitution In case it would be accompanied by the use of armed
force. We must thoroughly debate this issue." He indicated that in
his view, the party needs to cautiously debate such participation.
He was speaking to an assembly gathered in Sapporo City.

14) U.S. sets three more conditions for removing DPRK from list of
states sponsoring terrorism, raising the threshold to include state
of uranium program

YOMIURI (Top play) (Excerpts)

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December 1, 2007

By Takashi Sakamoto in Washington, D.C.

The U.S. government has decided to add three new conditions on North
Korea to other conditions for the removal of its name from the list
of countries designated as terrorist-sponsoring states. In addition
to completely disabling its nuclear facility at Yonbyon, North Korea
must at the time of presenting its report of its nuclear programs,
satisfy these three conditions: 1) reveal how much plutonium it has
extracted as fuel for nuclear bombs; 2) the state of its enriched
uranium; and 3) the nuclear materials it has transferred to other
countries like Syria. This was revealed Nov. 30 by a source
connected to the six-party talks. There is only a slim possibility
that North Korea will accept all of the terms that the U.S. is
calling for, so it seems certain that the timetable for delisting
the DPRK from the terrorist-sponsoring list will greatly slip.

15) Japan-China economic dialogue: Cooperation for promoting
protection of intellectual property rights; Joint paper includes
cooperation on environment issues

NIHON KEIZAI (Top Play) (Excerpts)
December 2, 2007

The governments of Japan and China on Dec. 1 held their first
session of the Japan-China high-level economic dialogue for economic
ministers of both countries to meet and discuss such issues as trade
and investment in a comprehensive manner. Both countries confirmed
the policy of establishing strategic mutual-beneficial relations on
the economic front. Participants agreed on cooperation on
environmental issues and energy-conserving technologies as well as
food safety. They also decided to set up a new framework to share
information on protection of intellectual property rights and
finalized a joint document. Regarding the agricultural sector, an
agreement was also reached that Japan export another 150 tons of
rice to China.

Major agreements: Japan to exports more rice to China

? Promote Japan-US strategic mutual-beneficial relations. The
economic dialogue is to be continued.
? The Chinese side is aware that it is worth learning lessons from
Japan's bubble economy caused by excessive fluidity. Japan expects
China to make efforts to raise the value of the yuan more quickly.
? Strengthen technical cooperation in the environmental and
energy-conservation areas.
? Continue cooperation in the food safety area.
? Exports of another 150 tons of Japanese-grown to China
? Expedite talks on development of gas fields in the East China Sea
in the run-up to Prime Minister Fukuda's China visit.

16) End of yen loans to China confirmed at Japan-China foreign
ministerial: Agreement reached to promote exchange of top leaders

ASAHI (Page 1) (Full)
December 3, 2007

Foreign Minister Koumura, now visiting China to take part in the
first session of the Japan-China high-level economic dialogue, on
the morning of Dec. 1 met with Chinese Foreign Minister Yang Jiechi
at the Chinese Foreign Ministry in Beijing. They agreed to further

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promote exchange of their top leaders through Prime Minister
Fukuda's visit to China slated for as early as the end of the year
and Premier Hu Jintao's visit to Japan. Hu will likely visit Japan
next spring. Both foreign ministers exchanged letters on yen loans
to China for fiscal 2007. The end of yen loans to that nation was
formally decided at the meeting.

The provision of yen loans in fiscal 2007 totals approximately 46.3
billion yen. Yen loans have been in place in 1979. More than 3
trillion yen has been used for the consolidation of infrastructure.

Both foreign ministers signed a Japan-China treaty on mutual
assistance on penal cases to enable investigative officials to
cooperate with each other without going through diplomatic channels
in criminal investigations.

At the outset of the talks, Koumura said, "I would like to hold
constructive talks on the future bilateral relations, the
international situation and global-scale issues." Yang responded,
"We must make the contents of the strategic mutual-beneficial
relations substantive." They confirmed their stance of deepening
mutually beneficial relations in the political and security areas as
well. The countries are far apart on the joint development of gas
fields in the East China Sea. They will speed up talks with eye on
Prime Minister Fukuda's planned visit to China. Koumura also touched
on Japan-North Korea relations, stressing the importance of a
comprehensive settlement of the abduction, nuclear and missile
issues.

17) Japanese, Chinese foreign ministers reaffirm desire to resolve
gas filed row ahead of Fukuda's visit to China

ASAHI (Top Play) (Excerpts)
December 2, 2007

Kazuto Tsukamoto, Beijing

Foreign Minister Masahiko Koumura and his Chinese counterpart Yang
jiechi agreed in their meeting on Dec. 1 on the need for both sides
to make a political judgment to resolve the dispute over gas field
development in the East China Sea ahead of a visit to China by Prime
Minister Fukuda, expected later this year. There is still a wide gap
between both sides' positions over gas exploration rights, but the
gas field issue, which stands in the way of promoting bilateral
relations, will take a major step toward a solution.

Koumura told reporters after the meeting: "We exchanged more probing
views than before. Although there was no progress, we reaffirmed the
need to settle the issue without fail." Adding: "I believe the
Chinese side also has a strong desire to move the issue forward,"
Koumura expressed his expectation about China's willingness to
settle the gas field row.

A senior Foreign Ministry official quoted Yang as saying: "This is a
serious, complicated and sensitive issue, but I hope both sides will
courageously address the issue and realize the joint development of
the gas fields based on a common perception to be confirmed at a
Japan-China summit when Premier Wen Jiabao visits Japan in April."
Koumura asked Yang to demonstrate his leadership in resolving the
issue. Both foreign ministers affirmed their desire to try hard to
find an early solution by overcoming the difference in their
positions.

TOKYO 00005410 011 OF 012

With respect to the deadline set by both sides at "sometime by the
time of the prime minister's visit to China," a senior Foreign
Ministry official indicate that it is highly likely that the issue
will be settled by the end of this year through a political
judgment, remarking: "It could be negatively taken as a nonbinding
target, but both sides have a strong desire to do their best." The
two countries are expected to upgrade bureau-director-level talks to
a higher level.

18) Japan, China agree on environment, energy conservation at
high-level dialogue on economic issues

ASAHI (Page 1) (Excerpt)
December 2, 2007

Kazuoto Tsukamoto, Kenji Minemura, Beijing

A Japan-China high-level dialogue on economic issues was held in
Beijing on Dec. 1, bringing together economic ministers of Japan and
China. After the meeting, both sides released a press communication.
The economic ministers agreed on cooperation in the areas of
environmental protection and energy conservation and decided to hold
the next round of dialogue in Tokyo next year.

19) High-level economic dialogue with China: Exports of another 150
tons of rice agreed on: Fourteen Japanese, Chinese cabinet ministers
finalize joint paper

YOMIURI (Page 2) (Excerpts)
December 2, 2007

Beijing, Takamasa Miyake

The first meeting of the Japan-China high-level economic dialogue
for both countries' cabinet ministers to discuss broad-based
economic issues was held at the Great Hall of the People in Beijing.
Six ministers, including Foreign Minister Koumura and Economy, Trade
and Industry Minister Amari, took part from Japan. Participants
agreed that Japan promote transfers of energy-conserving
technologies to China and that Japanese companies inform the Chinese
government of information on damage caused by copied or pirated
products. They also agreed on exports of Japanese rice to China and
put all agreements into a joint paper.

Eight Chinese ministers, including Vice Premier Zeng Peiyan, took
part in the meeting. Participants during the meeting, which
continued for about four hours, exchanged views on measures to
prevent global warming and expand trade and investment.

Prior to the meeting, Agriculture Minister met with Li Changjiang,
head of the General Administration of Quality Supervision,
Inspection and Quarantine. They agreed that Japan export to China
another 150 tons of rice by the end of next March. Japan had already
exported 24 tons in June. They also agreed to boil down quarantine
conditions to enable regular exports of Japanese rice to China.
Japan agreed to import Chinese-grown pumpkins as requested.

Environment Minister Kamoshita formally agreed with Zhou Shengxian,
head of the State Environment Protection Administration, on a
co-benefit project, in which Japan implements measures against
pollution and obtains greenhouse gas emissions rights in return. The

TOKYO 00005410 012 OF 012


Japanese side sought the provision of observation data on yellow
sand, a phenomenon occurred in deserts on the Chinese contents.
Yellow sand is carried to Japan by the wind.

20) DPJ head Ozawa to visit China on Dec. 6 to meet President Hu

TOKYO SHIMBUN (Page 2) (Excerpts)
December 2, 2007

Democratic Party of Japan (DPJ) President Ichiro Ozawa will leave
Japan on Dec. 6 for a three-day trip of China for talks with
President Hu Jintao and other Chinese government leaders. It will be
his third visit to China as the party leader, but about 50 party
members and about 400 supporters will unprecedentedly accompany him
on the visit this time.

Ozawa and others will be arriving in Beijing on the afternoon of the
6yh. On the 7th, they will meet President Hu and such key figures as
Wang Jiarui, head of the Chinese Communist Party's international
Department. They are expected to hold talks by theme, such as
international, security, and economic issues.

The DPJ agreed with the Chinese Communist Party to set up an
exchange consultative body when Ozawa visited China last year. Ozawa
has engaged in his longtime personal project of promoting friendly
ties with China at the grassroots level, which he launched in 1989.

Ozawa said: "The visit is aimed for many people of both countries to
establish friendly ties at the grassroots level. The main purpose is
not to meet the president."

But many members in the main opposition party believe that the trip
is aimed to establish close ties with the Chinese government and
show the importance he attaches to Asia in an effort to demonstrate
his capability to hold the reins of government in preparation for
the next House of Representatives election, in which the DPJ is
hoping to grab political power.

A member of the delegation to China said: "Chinese trainee
executives are eager to know about President Ozawa" now that the DPJ
has control of the House of Councillors. Given this, the visit to
China is expected to produce some positive political results.

SCHIEFFER

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