Cablegate: Daily Summary of Japanese Press 09/25/08

DE RUEHKO #2653/01 2690814
P 250814Z SEP 08




E.O. 12958: N/A



(1) U.S. nuclear-powered carrier George Washington enters port of
Yokosuka in first such deployment in Japan (Asahi)

(2) Nuclear flattop deployment-Anxiety over safety (Part 2): Barrier
to disaster contingency planning; Gulf unfilled over anticipated
accidents (Tokyo Shimbun)

(3) Three scenarios for Aso administration on timing for dissolving
Lower House, according to progress in deliberations on extra budget
bill, public support (Asahi)

(4) Scanner column: Both ruling coalition, DPJ aiming to please
public; Policy made without debate on revenue sources (Yomiuri)

(5) Special contribution by Yukio Okamoto (Part C): Japan at
crossroads to determine its future course (Sankei)

(6) MSDF refueling mission a test for national interests (Sankei)

(7) Japanese business circles concerned about China's new regulation
on disclosure of secret information on IT equipment (Yomiuri)

(8) U.S. financial crisis likely to change map of Japan's business
world: Can Japanese banks make best use of lessons learnt from
collapse of bubble economy? (Tokyo Shimbun)

(9) Prime Minister's schedule, Sept. 24 & 25 (Nikkei)


(1) U.S. nuclear-powered carrier George Washington enters port of
Yokosuka in first such deployment in Japan

ASAHI (Top play) (Excerpts)
Eve., September 25, 2008

The U.S. Navy's nuclear-powered carrier George Washington (GW)
entered the port of Yokosuka City in Kanagawa Prefecture this
morning for deployment at the Yokosuka Naval Base. This is the first
time since a U.S. Navy carrier was deployed to Japan in 1973 for a
nuclear-powered carrier to be home ported in Japan. The U.S. armed
forces are moving ahead with plans to make the Pacific a stronghold
for the war on terror and other objectives, and this deployment is
part of the strengthening of its military power (in the region).

The new U.S. carrier being deployed to Japan is the fourth to be
home ported at Yokosuka since the Midway. The GW replaced the Kitty
Hawk, a conventionally-powered carrier, which will soon be retired.
The vessel in May was damaged by fire, set off by seamen smoking
cigarettes, and its arrival was delayed. The U.S. armed forces has
in its arsenal 10 nuclear-powered carriers, but this is the first
one to be deployed permanently overseas. A nuclear-powered carrier,
which uses enriched uranium, has not need for being supplied with
fuel. It can carry a high amount of ammunition and fuel used by its
jets. For that reason, it has a combat capability of twice the time
span of conventional carriers that operate on fuel oil.

At the ceremony welcoming the arrival, U.S. Ambassador to Japan
Schieffer said: "The United States does not have a more important
alliance than the one with Japan. This vessel will heighten Japan's

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national security and increase the national security of the U.S., as
well. Since its safe operation is guaranteed, it can operate to the
extent of its capability."

(2) Nuclear flattop deployment-Anxiety over safety (Part 2): Barrier
to disaster contingency planning; Gulf unfilled over anticipated

TOKYO SHIMBUN (Page 26) (Full)
September 25, 2008

On Sept. 5, ahead of the arrival of the USS George Washington, a
nuclear-powered aircraft carrier of the U.S. Navy, at the Yokosuka
base, an executive from the All Japan Garrison Forces Labor Union
(Zenchuro) was at the Defense Ministry in Ichigaya, Tokyo, where he
vented his anger on a senior official of the ministry, who was
hesitant about planning safety measures.

"You may believe nuclear-powered warships are accident-free," the
labor union leader told the official. "But," he went on, "you'd
better change that way of thinking." He added, "You should take
safety measures premised on accidents."

The U.S. Navy's Yokosuka base has a dockyard called the Ship Repair
Facility (SRF), where aircraft carriers and other warships undergo
maintenance and repair. Japanese employees working there number
about 1,800. Zenchuro has demanded that the base should have all
Japanese workers there carry a compact dosimeter with them. However,
the U.S. Navy will not grant the demand, explaining that Yokosuka
also comes under U.S. safety standards.

In the United States, only those who work within nuclear-powered
warships' restricted areas near their reactors are required to carry
dosimeters with them. Those working in other areas-both in and
outside nuclear-powered warships-are not required to do so. There is
no sign to indicate that the U.S. military will allow Japanese
workers, who have no work to do within the restricted areas, to
carry dosimeters.

The U.S. Navy says there is no radiation leakage outside the
restricted areas of its nuclear-powered warships. This account comes
from the U.S. Navy's confidence in the structural safeguards of its
nuclear-powered warships. However, the U.S. Navy has never
substantiated its word about their safety, citing confidentiality as
a reason. Due to such unaccountability, there are deep-seated
concerns among the base workers about being exposed to radiation at
work. They are also growing distrustful of the Defense Ministry for
it does not seem to be working on the U.S. military to persuade it
to let them carry dosimeters.

A man working at the SRF for over 20 years lamented: "If we are
exposed to radiation, we need to know when and where we were
exposed. Otherwise, we will encounter troubled when we apply for
workers' accident compensation insurance. If we carry dosimeters
with us, we can also prove there is safety."

There is also a deep gulf between Japan and the United States in
their awareness of how to address nuclear disasters.

In September 2006, the USS Honolulu, a nuclear-powered submarine,
called at the Yokosuka base. After the Honolulu left port, a trace
of radioactive substance was detected from seawater sampled near the

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Yokosuka base. Later on, it was brought to light that the USS
Houston, also a nuclear-powered submarine, had leaked radiation.
However, the U.S. Navy stressed that it was not an accident, denying
its radiological effects on public health and the environment.

Based on the actual results of operation over the past 50 years, the
U.S. Navy says there can be no nuclear reactor accident. This year
as well, Yokosuka City therefore could not make a scenario for its
joint disaster drill with the U.S. Navy in anticipation of a nuclear
reactor accident.

Yokosuka City compromised so as to ensure that the U.S. Navy
provides information without delay. However, there were strong calls
from among the city's local residents for an evacuation drill
anticipating a nuclear reactor accident. The city therefore had to
plan it separately.

The evacuation drill is without participation from the U.S. Navy,
which is the party concerned. The anxieties of Yokosuka's
base-neighboring residents cannot be dispelled.

(3) Three scenarios for Aso administration on timing for dissolving
Lower House, according to progress in deliberations on extra budget
bill, public support

ASAHI (Page 4) (Full)
September 25, 2008

The Aso administration, which was inaugurated yesterday, will have
to soon decide on when to dissolve the House of Representatives and
hold a general election. The administration will make a decision,
reflecting progress in deliberations on the fiscal 2008
supplementary budget bill and public support for the

1. Voting on Oct. 26 if talks between both camps collapse before
start of deliberations

If the new cabinet receives high public support and sees the
Democratic Party of Japan (DPJ) and other opposition parties
unwilling to cooperate in enacting the extra budget bill, the
government would dissolve the Lower House at an early date. In this
scenario, the prime minister would dissolve the Lower House on Oct.
3 just after a representative interpellations session in the
extraordinary Diet session. It would set the dates of official
announcement and voting for the election at Oct. 14 and Oct. 26,
respectively. This is the shortest course for the government to be
able hold the election while public support for it is still high.

Premised on this scenario, the ruling coalition has made
preparations under the lead of Election Committee Chairman Makoto

In the course of deliberations on the extra budget bill, however,
the opposition bloc will inevitably step up attacks against the
government over the pension record-keeping fiasco, illegal
transactions in tainted rice, and other problems. A veteran New
Komeito lawmaker voiced apprehension that in this case, gaffes will
prove fatal to the ruling coalition.

This scenario is also aimed at dissolving the Lower House before the
DPJ finishes preparations for the election.

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2. Voting in early November if deliberations protracted in Upper

Prime Minister Aso, who gives priority to buoying up the economy, is
eager to enact the second budget bill into law. Reflecting his wish,
the ruling camp has begun looking into holding a Lower House Budget
Committee session on Oct. 6, with no dissolution on Oct. 3.

If the opposition side cooperates in enacting the extra budget bill
and reaches an agreement with the ruling coalition in several days
of deliberations, the government might dissolve the Lower House in
early October and carry out the election on Nov. 2 or 9. Some
suppose that if the date is set at Nov. 2, voter turnout might be
low, advantageous to the ruling coalition, because Nov. 1, 2 &3 are

Many ruling party members, however, expect the opposition bloc to
resort to tactics to prolong deliberations in a move to prevent the
bill from clearing the Diet in the opposition-controlled House of
Councillors, as Aso said in a press conference yesterday, "We were
often betrayed by the opposition bloc over its commitments." In
actuality, DPJ Diet Affairs Committee Chairman Kenji Yamaoka
proposed deciding through talks to dissolve the Lower House, but
many in the opposition camp are still calling for thorough

If the opposition bloc continues to refuse voting on the bill in the
Upper House, the prime minister might decide to dissolve the Lower
House while emphasizing the opposition's uncooperative stance,
before getting the bill through the Diet. In this case, the voting
date is likely to be set at Nov. 2 or 9. On the 4th, the U.S.
presidential election will take place. Many in the ruling camp, out
of fear that momentum might gather for a change of government if
Democratic candidate Barack Obama wins the election, are now calling
for voting on the 2nd.

The New Komeito and the Soka Gakkai initially envisioned voting on
Nov. 9, but they have begun to say that voting on Oct. 26 is too
early. They are now eyeing Nov. 2.

3. Dissolution in November or later if priority given to enacting
extra budget bill

Meanwhile, some ruling members see the prime minister as aiming to
get the extra budget bill through the Diet to the last. To have the
bill enacted over the resistance of the opposition camp, it will be
necessary to apply the article stipulating that if the Upper House
fails to take final action within 30 days after the receipt of the
budget bill passed by the Lower House, the decision of the Lower
House shall be the decision of the Diet. In this case, Lower House
dissolution will be put off to November or later.

The New Komeito, backed by Soka Gakkai, does not want to see the
voting date delayed to Nov. 9 or later. Ruling party members have
begun preparations, setting up election offices. The more the day of
Lower House dissolution is delayed, the more the risk of a drop in
public support for the cabinet will increase. It will not be easy
for the administration to decide to delay dissolution.

(4) Scanner column: Both ruling coalition, DPJ aiming to please
public; Policy made without debate on revenue sources

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YOMIURI (Page 3) (Full)
September 24, 2008

The ruling Liberal Democratic Party (LDP) and its coalition partner
New Komeito agreed yesterday on a set of policies to be pursued
under a Taro Aso administration. With an eye on the looming House of
Representatives election, most of the policies, including an income
tax cut and review of the medical system for people aged 75 or
older, are aimed to please the public. Ichiro Ozawa, president of
the main opposition Democratic Party of Japan (DPJ), has come up
with priority policy items, which would cost totaling 22 trillion
yen, as his platform to take over the reins of government. However,
neither the LDP nor the DPJ have clarified where they would find the
revenue sources for implementing their policies. There remain many
hurdles for them to overcome.

LDP, New Komeito refers to increase on burden on public

At a New Komeito convention yesterday in Tokyo, Aso delivered a
speech, in which he stressed: "The financial crisis has begun to
affect the economy. So, we will have to implement the emergency
economic package, which was compiled by the LDP and New Komeito."
Aso's speech was met by an explosion of applause.

A main feature of the economic rescue package is a flat-sum tax cut
in the income and residential taxes, which were requested by the New
Komeito. Then LDP Secretary General Aso accepted the New Komeito's
demand. A scale of 2 trillion yen is envisioned as the cut.

The administrative agreement reached on Sept. 23 between the LDP and
New Komeito specifies first the steady implementation of the
economic package. It incorporates such items as lending money to
small and medium-sized companies facing capital shortfall, improving
measures for people receiving no pension benefits or small amounts,
as well as looking into the possibility of providing free infant
care, as the New Komeito has demanded.

New Komeito leader Akihiro Ota stated in a press conference

"The New Komeito protests the daily lives of people. Which party can
help people out of straitened circumstances would become a campaign
issue for the next Lower House election."

Aso has clarified a stance of giving priority to revitalizing the
economy for a while, putting off fiscal reconstruction. In addition,
he also said during his campaign for the LDP presidential race that
he would review the medical system for people aged 75 or older. The
sudden announcement of his decision appears to be aimed at reducing
negative factors for his party going into the Lower House election.

Although the ruling coalition has decided to implement the flat-sum
tax cut in fiscal 2008, it has postponed a conclusion on those who
would be subject to the flat-sum tax cut, the amount to be reduced,
and how to secure necessary revenue sources.

It is believed that a huge amount of public funds is required to
reduce the sense of unfairness between those who pay taxes and the
elderly, reviewing the health care system for the elderly.

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The ruling coalition's set of policies does not include any items
aimed at boosting the public's burden. As to measures to secure
revenue resources, the ruling camp says that the local branches of
the government offices should be abolished or scaled down, and that
wasted tax money should be cut by strictly reviewing general and
special account budgets.

A senior LDP member lamented, saying: "It seems that we are
reviewing all policies that would be attacked by the DPJ. We should
not take an obsequious attitude."

Although the LDP has severely criticized the DPJ's 22 trillion yen
platform as being pork-barrel largesse and having no revenue sources
to back it, some in the LDP said that they could not criticize the

Regarding a review of the medical system for people aged 75 or
older, one New Komeito member said:

"Our supporters have finally understood the system by our scrupulous
explanations. If we say the system would be reviewed, they will be
confused. This could lead to our being attacked by the opposition."

22 trillion yen of reserve funds insufficient for DPJ to implement

The special feature of the platform presented on Sept. 21 by DPJ
President Ozawa is that the priority policy items would be
implemented in three stages. The aim is to make clear the image how
the policies should be implemented. Ozawa has judged that it would
be easier to secure funds if they are implemented gradually. He
plans to decide this month on a roadmap to implement them and
include the roadmap in the party's manifesto (set of campaign
pledges) for the next general election.

Deputy President Naoto Kan told reporters yesterday in Akita City:

"We can calculate concrete costs for the platform for taking over
political helm. For the first fiscal year, 6 to 10 trillion yen
would be needed; and a little more would be increased for the second
fiscal year, and a total of 22 trillion yen would be needed
subsequently. "

The DPJ's manifesto for last year's Upper House election specified a
policy of allocating 15.3 trillion yen for such measures as support
for child-rearing. Since the abolishment of provisional tax rates
such as a gasoline tax is added to that manifesto, the amount of
revenue sources necessary to implement the manifesto has ballooned
to 22 trillion yen. The DPJ appears to be aiming at competing
against the Aso government because Aso has now prioritized
revitalizing the economy rather than structural reforms.

The question is how to find the 22 trillion yen needed. Ozawa
explained: "We will gradually shift 22 trillion yen, or 10 PERCENT
of the 212 trillion yen of the government's general and special
account budgets, to fund the implementing of the policies."

The DPJ has said that budgets for projects and areas whose
priorities are low would be reduced. However, if the budgets are
actually slashed, lawmakers having close ties with those projects
and areas will be certain to oppose the idea.

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Therefore, it is uncertain whether the DPJ can specify budget items
in its manifesto.

There is a view in the DPJ that reserve funds (maizoukin), including
surpluses from the special account budgets, should be used for the
time being. There are limits to the temporary use of the reserve
funds because most of the DPJ's policies are permanent measures.
Hiromitsu Ishi, president of the Open University of Japan, pointed

"Under the present law, special account budgets are required to be
used for specific purposes. So, they cannot be used freely. Since
how the DPJ will secure the 22 trillion yen has yet to be made
clear, it is hard to believe that the party will be able to
implement its policies. If the DPJ aims to take over the reins of
government, it should talk honestly about (the fiscal condition) to
the public."

(5) Special contribution by Yukio Okamoto (Part C): Japan at
crossroads to determine its future course

SANKEI (Pp. 1-3) (Abridged slightly)
September 19, 2008

Japan has excellent nongovernmental organization (NGO) members. In
Afghanistan, NGO members have removed antipersonnel mines, taught
agricultural methods, including irrigation, engaged in school
education, and provided medical assistance. Without any governmental
backing or high salaries like civic servants, they have worked only
with a sense of mission. There are female members, as well. Several
years ago when the Japanese government workers were not allowed to
go out of the capital of Kabul, I saw several Japanese female
members working hard in remote places like Herat. I saw similar
scenes in Iraq, as well.

Western governments have given careful protection and financial
support to their own NGOs. They have given assistance to foreign
NGOs, as well. Some Japanese NGOs have received more funds from the
U.S. government than from the Japanese government. The Japanese
government's support for NGOs is very small -- 0.2 PERCENT of the
official development assistance (ODA) budget.

When American NGO workers are put in danger, a U.S. military
helicopter would come to rescue them. The helicopter is boarded by
American NGO workers and local workers in that order, so there would
be no room for Japanese NGO workers. Japanese nationals would have
to come up with evacuation methods independently. The government
should enhance its support for NGOs fundamentally so that they can
purchase vehicles and wireless applications to be used in time of an
emergency and can step up their support activities throughout the

? Heroic aid workers

The war on terror in and around Afghanistan is a matter of great
concern to the international community. Some 40 countries have sent
troops, border guards, and police officers to Afghanistan in
compliance with a request from President Hamid Karzai. They are now
conducting activities to secure security, which is essential for
national reconstruction. The International Security Assistance Force
(ISAF) consists of 53,000 troops from countries around the world.

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Japan is not one of them. When asked by Afghan citizens why Japanese
troops do not come, Japanese NGO members reportedly answer, "You got
us instead."

I met a brilliant young Japanese man in Phnom Penh in 1992. After
speaking of his dream of bringing peace to Cambodia, the young man
said: "Japan does not do anything, so we must work hard." His name
was Atsuhito Nakata. Tanaka, who was working for peace-building in
Cambodia as a UN volunteer, was shot to death by guerrillas in the
following year.

Japan boasted being the world's largest aid provider in the 1990s.
Subsequently seeing a drop of 40 PERCENT in the amount, Japan has
been overtaken by major Western countries. One ODA project after
another has been terminated. Such a situation may take a toll on
front-line aid workers. Aren't workers from the Japan International
Cooperation Agency (JICA) or Japan Overseas Cooperation Volunteers
(JOCV), who extend technological cooperation free of charge, bearing
greater burdens?

The government's decision not to join peacekeeping operations or to
back away from economic cooperation may spur the heroic sense of
mission of thoughtful NGO and aid workers. Forcing governmental
responsibility onto individual goodwill and courage is the state's

? Not even monetary contribution

The opposition bloc is trying to withdraw the refueler from the
waters off Somalia in the Indian Ocean based on absurd logic.
Withdrawal from the Indian Ocean means Japan's departure from the
war on terror and the international mutual aid society, forcing its
duty of protecting its own commercial vessels onto other countries.

In 1991, Japan tried to contribute to the Gulf War by offering money
alone. As a result, the country came under global criticism and
ridicule. This time around, Japan has not even offered money. As I
wrote for this newspaper on Nov. 28, 2007, there are many things
Japan can do besides dispatching SDF vessels as long as there is a
political will. But Japan has not done any of those things.

Is Japan going to turn itself into a state that timidly hopes that
its people and vessels will not be attacked by terrorists and
pillagers? Is Japan going to become a state that continues praying
that no evil will fall on it? Does Japan believe that the day will
come when terrorists and pillagers say, after reading Article 9 of
the Constitution, that they will stay away from Japan?

Seeing NGO and JOCV workers making great achievements at various
parts of the world, I do not think there is any need for Japan to
become such a state. Japan has many young people with courage and a
sense of mission. What kind of country should we hand over to them?

We are probably at the most critical postwar crossroads to determine
the future course of Japan.

(6) MSDF refueling mission a test for national interests

SANKEI (Page 9) (Abridged slightly)
September 24, 2008

By Satoshi Morimoto, professor, Takushoku University graduate

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Still breeding ground for terrorists

Although the political situation in Japan is chaotic, I want to see
those responsible for state affairs fairly and squarely discuss what
serves Japan's national interests in the international community. In
order to maintain peace and stability, lawmakers must have sharp
insights and the ability to think strategically about possible
changes. Further, if the government fails to carry out what must be
done, the country would not be able to pursue its national interests
or win international credibility. The economy will not pick up,
either. Achieving freedom and peace takes determination and efforts
to defend them, even if it means risking some things and paying the
due price.

For instance, the government must stand firm against insurgents like
those who killed Kazuya Ito, a Japanese aid worker, in Afghanistan
recently. Still unable to maintain law and order independently,
Afghanistan has become a breeding ground for terrorists, and the
Taliban has now regained influence. That is why some 40 countries,
including Western countries, are engaged in security operations in
Afghanistan, the main battlefield in the war on terror.

In order to maintain the security of the free world, Islamic
terrorists in and around Afghanistan must be contained. That is why
those countries are conducting the antiterrorism operations despite
the fact that they have already lost over 900 lives. The United
States is expected to strengthen the operations in Afghanistan
regardless of who wins the presidency. Many European counties have
also decided to send additional troops.

Coalition vessels helped Japanese ships

Many countries have deployed naval vessels to the Indian Ocean in
order to prevent terrorists from taking opium out of this area to
earn hard currency and from bringing arms and ammunition into this
area. To support these maritime operations, Japan has deployed its
vessels to the Indian Ocean for seven years. Japan has redeployed
its vessels because the law for this mission was enacted in
mid-January this year after extending two extraordinary Diet
sessions. The Maritime Self-Defense Force has already refueled
foreign naval vessels on over 40 occasions. Terrorists have learned
that information, and the MSDF has not accomplished much over the
last year when compared to earlier times. Still, the fact remains
that the MSDF mission is vital for international peace and

Japan is a maritime state. The country also imports about 90 PERCENT
of its crude oil from the Middle East. Tanker routes in the Indian
Ocean are a lifeline supporting our comfortable livelihood. Some
Japanese ships have encountered pirates in this sea and have been
helped by foreign naval vessels engaged in the Maritime Interdiction

While the free world is conducting its antiterrorism activities in
Iraq, Afghanistan, and the Indian Ocean, Japan is not allowed or
should not even try to withdraw from them. It is crystal clear how
the option of dropping out of the joint effort with countries
sharing such values as freedom, peace, and democracy will undermine
Japan's national interests.

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Lawmakers not thinking of the future of the country or the people's
livelihood cannot be called true legislators. Political parties
taking action irrespective of national interests cannot be called
true political parties. If Japan failed to extend the Antiterrorism
Special Measures Law, the MSDF's withdrawal from the Indian Ocean
might coincide with the inauguration of the next U.S. president on
Jan. 20, 2009. In view of the unclear future course of North Korea,
the security of Japan in Eat Asia, and the Japan-U.S. alliance, it
is impossible for Tokyo to opt for such an option, however.

Options other than refueling

Even if the activities in the Indian Ocean are to be continued, that
does not mean Japan's cooperation and contribution is sufficient.
International cooperation in Afghanistan serves Japan's national
interest, and that requires a clear national strategy. Japan must
realize that contributing to the people of Afghanistan is its
responsibility as a member of the international community.

There are many things Japan can do in Afghanistan. Dispatching C-130
cargo aircrafts and transport helicopters for an airlift mission is
one option. Forming a provincial reconstruction team (PRT) to extend
military-civilian cooperation is another option. It is also
conceivable to provide medical and logistical support. The question
is, whether political leaders have the firm political will and
whether they can win public support for the enactment of
legislation. Whether or not they can endure the risks and price
associated with the deployment of the SDF is also an important

Pursuing national interests involves some risks. A country averting
risks without a strong resolve cannot win international respect or
trust. This concerns the responsibility and dignity of a state. If
Japan cannot extend the Antiterrorism Law, its future will be bleak,
and it might endanger the Japan-U.S. alliance, as well. Getting the
supplementary budget past the Diet is important, but Japan needs to
realize that for its future, it is far more important to demonstrate
to the rest of the world its resolve and its ability to continue the
international cooperation.

(7) Japanese business circles concerned about China's new regulation
on disclosure of secret information on IT equipment

YOMIURI (Page 11) (Abridged slightly)
September 24, 2008

Members of the Japan-China Economic Association's (JCEA, chaired by
Fujio Cho, Toyota Motors chairman) delegation to China on September
23 met with senior officials of the Ministry of Commerce. They
conveyed a strong concern harbored by Japan's economic circles about
China's plan to establish a new system that forces the disclosure of
secret information regarding IT equipment. However, the Chinese side
stood firm in their stance of introducing the new system in May 2009
as planned. Japan, the U.S. and European countries are increasingly
opposing the introduction of a system that is unprecedented in the
world. Future talks are expected to face complications.

Shigeji Ueshima, vice chairman of the JCEA and an advisor to Mitsui
& Co. during the talks strongly asked the Chinese side to take a
second look at the plan, noting: "Such a system could serve as a
disturbing factor for bilateral cooperation for trade and investment
in the high-tech area. It will also have an impact from the

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perspective of protecting intellectual property rights."

However, the Commerce Ministry Asian Affairs Bureau Director General
Lu Kejian directly confronted, replying: "The envisaged system is in
line with international standards. It is also in compliance with
regulations set by the World Trade Organization (WTO)." Regarding
intellectual property rights, too, Lu said, "Our planned system also
stipulates confidentiality regarding its application." The talks
thus ended in failure.

The IT regulation planned by China is aimed at the forcible
disclosure of the source code, the design of software. This would
threaten companies' intellectual property rights. There is also
concern in security terms, because it means that the products of
exporting companies are to be exposed completely under such a

The exposure of the source code of Windows could give rise to a
sharp increase in hackers and attacks by computer viruses. The new
regulations have thus contents that could meet opposition from all
over the world, as a top person in a leading precision equipment
manufacturer said.

Detailed rules on implementation

Concerning the objective of the new system, the Chinese side during
the talks explained that it is aimed at preventing scams and the
circulation of harmful information.

Many products subject to the system are related to the Internet and
networks. China appears to aim to strengthen information control
within the country with authorities obtaining the source codes of

The immediate focus is on the details of the rules on the
implementation of the system. That is because detailed rules will
stipulate what products are subject to what rules.

Detailed rules were at first supposed to be released in May. The
timetable was, however, postponed due to growing opposition to the
new system from Japan, the U.S. and Europe. The Ministry of Economy,
Trade and Industry intends to press ahead with talks with China in
an effort to prevent China from setting serious rules.

Special treatment seen in past

However, there have been cases in which China treated specific
companies as exception to its regulations. For this reason, various
countries intend to call on China to withdraw the planned system in
a cooperative way. However, some countries are trying to hold
bilateral talks in an effort to prevent their own countries'
companies from being placed at a disadvantage.

If the talks remain unsettled by the time when the system is put
into practice -- May, 2009, Japan and other countries may file a
complaint against China with the WTO on the charge of violating the
WTO agreement.

(8) U.S. financial crisis likely to change map of Japan's business
world: Can Japanese banks make best use of lessons learnt from
collapse of bubble economy?

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TOKYO SHIMBUN (Page 9) (Full)
September 25, 2008

The financial crisis that started in the United States is now
redrawing the map of the financial world in both Japan and the U.S.
Japanese financial institutions are moving ahead in a bid to boost
their overseas operations, taking the advantage of worsening
business conditions in America. However, in the past, Japanese
financial institutions failed in their initial drive to advance into
the overseas market, so it is unknown whether they can become
international business players, taking advantage of the current
financial crisis.

Reporting on the Japanese banks' aggressive moves, the Wall Street
Journal headlined, "The Japanese are back!" Japanese financial
institutions were once saddled with massive amounts of bad loans,
but they now want to advance into foreign countries or expand
business operations by using as leverage their investments in or
takeovers of faltering European and U.S. financial institutions.

The Sumitomo Mitsui Financial Group (SMFG) on September 24 revealed
their plan to invest in Goldman Sachs, a leading U.S. securities
firm. The two companies had once capital ties. SMFG is aiming to
build a footing for its mergers and acquisitions operations abroad
through investment in Goldman Sachs.

Mitsubishi UFJ Financial Group (MUFJG), which has decided to acquire
a 900 billion yen stake in Morgan Stanley, also aims to strengthen
its M&A operations. Among securities houses, Nomura Holdings has
bought the Asian and European operations of Lehman Brothers.
Nomura's operational bases in Asia and Europe will double in one

In the insurance industry, AIG, which is now under state control,
could sell off its group companies in Japan to cut back on their
business losses. Japanese life and non-life insurers are eager to
buy those companies.

However, Naoko Nemoto, an analyst at Standard and Poors, took a
cautious stand, although she highly evaluated such opportunities:
"If Japanese financial institutions do not invest now, they might
never have a chance to catch up with the global restructuring going
on." Leading U.S. securities firms which Japanese banks plan to bail
out are still saddled with highly risky financial products. Nemoto
pointed out, "There still remains risks of their going under."

In the event those companies file for bankruptcy, the stocks
Japanese companies obtained through investment will become no better
than waste paper. Investing in such companies could become a yet
another cause for concern for business management.

The latter half of the 1980s, when the economic bubble was at peak,
saw a wave of Japanese banks purchasing U.S. financial institutions.
However, the local staff soon left the companies acquired by
Japanese banks because they found it too difficult to adapt
themselves to the Japanese-style management. As a result, most
Japanese companies had to pull out of operations in the U.S.,
selling the recently acquired financial assets.

Can Japanese companies make the best use of lessons they had learned
in the past? That will be the key as to whether they can use their
investments and takeovers as means to absorb the know-how from the

TOKYO 00002653 013 OF 014

acquired companies and their personnel.

(9) Prime Minister's schedule, Sept. 24 & 25

NIKKEI (Page 2) (Full)
September 25, 2009

Yasuo Fukuda

Met at Kantei with Chief Cabinet Secretary Machimura.

Attended cabinet meeting.

Met with Special Advisor Ito, followed by Deputy Chief Cabinet
Secretary for Crisis Management Ito, Cabinet Public Relations
Secretary Ogawa, Cabinet Intelligence Director Mitani, and followed
by Deputy Chief Cabinet Secretary Futahashi.

Met with Futahashi, deputy chief cabinet secretaries Shionoya and

Met with Machimura, Shionoya, Iwaki and Futahashi.

Received bouquet from reprehensive of Kantei staff at front gate of

Attended Lower House plenary session.

Arrived at Imperial Hotel.

Attended Lower House plenary session.

Arrived at Imperial Hotel.

Taro Aso

Attended Lower House plenary session.

Named 92nd prime minister. Met with Fukuda, Machimura, LDP Secretary
General Hosoda and Diet Affairs Committee Chairman Oshima.

Called on DPJ President Ozawa and other officials at their offices
in the Diet building.

Met at Kantei Chief Cabinet Secretary Kawamura, and deputy chief
cabinet secretaries Matsumoto and Konoike.


TOKYO 00002653 014 OF 014

Met with New Komeito leader Ota, attended by Hosoda and New Komeito
Secretary General Kitagawa. Set up headquarters to pick new cabinet
lineup, along with six LDP executives, including Hosoda and Upper
House Chairman Otsuji, and New Komeito's Ota and Kitagawa.

Held press conference.

Called new cabinet ministers in his office, attended by Hosoda, Ota
and others. Hosoda remained.

Received call from U.S. President Bush.

Made informal report to the Emperor at the Imperial Palace. Invested
with prime minister by the Emperor. Attended Imperial attestation

Issued at Kantei assignments to positions.

Held first cabinet meeting.


© Scoop Media

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