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Cablegate: Japanese Morning Press Highlights 12/31/09

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DE RUEHKO #2949/01 3650116
ZNR UUUUU ZZH
P 310116Z DEC 09
FM AMEMBASSY TOKYO
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INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
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RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
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RUEHNAG/AMCONSUL NAGOYA 5230
RUEHKSO/AMCONSUL SAPPORO 8619
RUEHBJ/AMEMBASSY BEIJING 2464
RUEHUL/AMEMBASSY SEOUL 9132
RUCNDT/USMISSION USUN NEW YORK 8556

UNCLAS SECTION 01 OF 07 TOKYO 002949

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: JAPANESE MORNING PRESS HIGHLIGHTS 12/31/09

INDEX:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Futenma relocation issue:
4) Govt. considering continued use of Futenma on condition of
reduced helicopter training (Asahi)

Defense & security:
5) U.S. Navy's recruitment of radiation control director raises
suspicion that carrier's nuclear reactors will undergo repairs in
violation of agreement (Akahata)

Foreign relations:
6) Summit meeting of Japanese, Chinese, and Korean leaders to be
held on Cheju-do in May (Yomiuri)

Economy:
7) China's investment share in joint development of Shirakaba Gas
field may exceed 50 PERCENT (Yomiuri)
8) Electric companies to invest 1 trillion yen in next generation
power transmission smart grid (Nikkei)

9) Japan Post to be reorganized into three companies under
government review plan (Mainichi)
10) New growth strategy sets goal of 3 PERCENT nominal growth
(Nikkei)

Politics:
11) Upper House member Yoshimura to leave LDP (Nikkei)
12) SDP leader Fukushima calls for replacing MOFA and MOD officials
in charge of Futenma issue (Nikkei)

Articles:

1) TOP HEADLINES

Asahi:
Growth strategy: Government sets new goal to achieve 2 PERCENT
average annual growth by 2020

Mainichi:
Japan Post to be reorganized into three companies under government
review plan

Yomiuri:
New growth strategy sets goal of 3 PERCENT nominal growth

Nikkei:
Electric companies to invest 1 trillion yen in next generation smart
power grids

Sankei:
New growth strategy to create new demand worth 100 trillion yen in
three fields

Tokyo Shimbun:
Former secretary testifies on delivering 400 million yen to Ozawa's
house; Special Investigation Division eyes questioning Ozawa


TOKYO 00002949 002 OF 007


Akahata:
Over 600 people enter temp workers' village set up by government

2) EDITORIALS

Asahi:
(1) 2009 - year of change: Continue to make changes for tomorrow

Mainichi:
(1) Looking back on 2009: Cultivate the seeds of change

Yomiuri:
(1) New growth strategy: Concrete measures for achieving goal
unclear
(2) Attempted terrorist attack on U.S. plane: Make efforts to
conduct thorough investigation and prevent recurrence

Nikkei:
(1) Competition and changes to encourage investment needed for
economic growth
(2) Stock market reflects Japan's economic contraction

Sankei:
(1) Japan-India security cooperation: Renew awareness of the U.S.'s
importance
(2) Growth strategy: Will the strategy help to revitalize
businesses?

Tokyo Shimbun:
(1) Thoughts on New Year's Eve: Invisible changes in the Japanese
people

Akahata:
(1) Temp workers' village for the New Year's holidays: Usher in New
Year with support and solidarity

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 30

NIKKEI (Page 2) (Full)
December 31, 2009

09:35 Met Foreign Minister Okada at his official residential
quarters.
10:17 Signed in at the Imperial Palace to report his return home.
10:32 Attended a growth strategy formulation meeting.
11:09 Attended a special cabinet meeting. Afterward held a press
conference on the new growth strategy.
12:07 Attended a demonstration on the new growth strategy
12:50 Had lunch with the cabinet ministers at his official
residential quarters
13:34 Met Ambassador to the U.S. Fujisaki.
14:15 Met Upper House member Yoshihiro Kawakami.
14:53 Met Deputy Chief Cabinet Secretary Matsui and Cabinet
Councilor Oriza Hirata at the Kantei.
15:09 Had an informal meeting with the cabinet press club.
17:08 Met Matsui.
17:22 Returned to his official residential quarters.
18:24 Met Matsui and Hirata.
20:07 Dined at a sushi restaurant in Jiyugaoka with wife Miyuki.
21:42 Dined at another sushi restaurant in Jiyugaoka with wife

TOKYO 00002949 003 OF 007


Miyuki.
00:20 Arrived at his official residential quarters.

4) Proposal to continue using Futenma base emerges in Hatoyama
administration

ASAHI (Page 1) (Excerpts)
December 31, 2009

In connection with the issue of the relocation of the U.S. forces'
Futenma Air Station (in Ginowan City, Okinawa), a proposal emerged
within the Hatoyama administration on Dec. 30 to accept the
continued use of the base after transferring some of helicopter
training conducted at Futenma to remote islands. Under this
proposal, the U.S. side will be asked to take measures to reduce the
danger at the densely-populated residential area close to the base,
and the government will seek the approval of the Okinawan people,
who are asking for the relocation of Futenma out of Okinawa or out
of Japan. Ie Island (in Ie Village, Okinawa) and Shimoji Island (in
Miyakojima City, Okinawa) are being considered for the relocation of
training exercises.

There are several reasons behind this proposal: it will be difficult
to implement relocation to Henoko, Nago City, under the 2006
Japan-U.S. agreement; Democratic Party of Japan Secretary General
Ichiro Ozawa is negative about Henoko relocation; and there is
little possibility of finding a new relocation site by May 2010,
which has been set as the deadline. It is also possible that the
U.S. side, which is demanding the implementation of the agreed plan
at an early date, may accept the continued use of Futenma.

Defense Minister Toshimi Kitazawa pointed out on Dec. 30 that "there
are problems" with Ie Island and Shimoji Island as Futenma
relocation sites "in terms of geographical location and capacity."
On the other hand, he indicated that they could possibly serve as
relocation sites for training exercises, saying: "The question is
what role these islands can play." Mizuho Fukushima, leader of the
Social Democratic Party, which advocates the relocation of Futenma
out of Okinawa or out of Japan, also said on the same day: "Since a
proposal has been made, we will discuss it."

At a gathering of senior ruling party officials on the evening of
Dec. 29, Ozawa said, "It will not do to reclaim land in the
beautiful sea," reiterating his opposition to Henoko relocation.
According to an informed source, Ozawa mentioned Shimoji Island on
that occasion and indicated his approval of relocation to that
island.

Ie Island and Shimoji Island have both been considered as Futenma
relocation sites in the past, but the proposals were dropped due to
resistance from the local residents. Whether they will accept the
transfer of training exercises will depend on how negotiations with
the local communities go from now on.

If the use of the Futenma base is continued, it will mean that the
1996 agreement between Japan and the U.S. to return this base will
be scrapped. It is also possible that the relocation of 8,000
Marines in Okinawa to Guam under the 2006 agreement may be
suspended.

5) U.S. naval base in Yokosuka recruiting radiological control
officer, indicating possible violation of agreement on not repairing

TOKYO 00002949 004 OF 007


aircraft carrier's nuclear reactor in Japan

AKAHATA (Page 1) (Abridged)
December 31, 2009

It was learned that the U.S. naval base in Yokosuka, Kanagawa
Prefecture is recruiting a field supervisor for "radiological
control operations," including "repair of the propulsion plant" of
the nuclear aircraft carrier USS George Washington. According to the
Department of Energy, the U.S. Navy's nuclear propulsion plants
contain nuclear reactors.

The Japanese and U.S. governments have an agreement not to conduct
repairs of George Washington's nuclear reactor in Japan. The
recruitment is another indication that it is highly possible that
repairs on nuclear reactors are taking place at the Yokosuka base in
violation of this agreement.

The recruitment is being conducted by the Puget Sound Naval Shipyard
in the state of Washington on the U.S. west coast. This shipyard set
up a Yokosuka detachment for the maintenance of George Washington
when the aircraft carrier was deployed to Yokosuka in September
2008.

6) Trilateral summit scheduled for Cheju-do in May

YOMIURI (Page 2) (Full)
December 31, 2009

Seoul

According to Yonhap News, South Korean Minister of Foreign Affairs
and Trade Yu Myung-hwan disclosed at a press conference on Dec. 30
that a summit of Japanese, Chinese, and Korean leaders is scheduled
to be held on Cheju-do in late May 2010. He also disclosed the
intention to seek agreement on setting up a standing secretariat for
trilateral summits between the countries' leaders.

7) China may put up more than half of investment in Shirakaba gas
field development

YOMIURI (Page 1) (Full)
December 31, 2009

Several government officials revealed that on Dec. 30 a de facto
agreement had been reached on the investment ratio of the joint
venture company established by Japan and China for the development
of the Shirakaba (Chinese name: Chunxiao) gas field in the East
China Sea. It appears that the Chinese share of investment exceeds
50 PERCENT because China was first to develop the gas field. The
two governments agreed in June 2008 on joint development of gas
fields in the East China Sea. China approved Japanese companies'
participation in the development of the Shirakaba gas field, and the
two countries agreed on joint investment and establishing a joint
venture. The investment ratio was not made public, but according to
the officials, a de facto agreement has been reached.

In both Japan and China there is great public interest in Shirakaba,
which reportedly has the largest reserves among gas fields in the
East China Sea. It is thought that the two governments did not
release the investment ratio due to concerns that the figures would
provoke a stronger backlash.

TOKYO 00002949 005 OF 007

Next the two countries will, after working out the details, nail
down the agreement through a treaty.

The Japanese side has requested an early conclusion of a treaty, but
the Chinese side has responded negatively. There are no prospects
for negotiations.

8) Major power companies to invest 1 trillion yen in smart grids

NIKKEI (Top play) (Excerpts)
December 31, 2009

Tokyo Electric Power Co., Kansai Electric Power Co., and other major
Japanese power utilities will make huge investments in the
establishment of smart power grids that can provide power
effectively by using information technology (IT). They have begun
considering installing smart meters equipped with communications
functions in all households. They will also enhance their power
distribution facilities in anticipation of an increase in solar
generation. The companies are likely to spend a total of more than 1
trillion yen on related facilities by 2020. Although the effort is
expected to help reduce the nation's greenhouse gas emissions, there
is concern that the huge equipment cost will push up electricity
charges and might eventually increase the burden on consumers.

Smart meters, which are considered to be a key component of
smart-grid systems, enable real-time monitoring of power consumption
and input from solar and other power generation systems for each
customer. Tokyo Electric plans to begin introducing smart meters in
2010 and to install the devices at over 20 million households and
other locations. Kansai Electric intends to install smart meters at
400,000 households by the end of 2010 and to replace 12 million
conventional meters with smart meters in the future.

9) Japan Post Group to be shifted to three-company system

MAINICHI (Top play) (Excerpt)
December 31, 2009

An outline of the government's plan to adopt a new organizational
system for the Japan Post Group became clear yesterday. The
government will first integrate Japan Post, Japan Post Service Co.,
and Japan Post Network Co. into a new company. The current
five-company system will be shifted to a three-company system, with
the new company holding the shares of Japan Post Bank Co. and Japan
Post Insurance Co. Holding over one-third of the shares of Japan
Post Co. and Japan Post Insurance Co. each, the new company will
have the right to veto important matters in shareholders meetings.
The new system is likely to allow the state to be actively involved
in management.

10) Government to aim at nominal 3 percent economic growth

NIKKEI (Page 1) (Excerpts)
December 31, 2009

The government adopted at a special cabinet meeting yesterday the
basic policy on a new growth strategy aiming at sustainable economic
growth. The policy stipulates that the government will manage the
economy by positioning the achievement of the nominal economic
growth rate as its top priority so that the people can sense

TOKYO 00002949 006 OF 007


economic growth through an increase in income. The government set
the nation's nominal economic growth rate at over 3 percent and real
growth rate at over 2 percent on average by fiscal 2020, with such
industries as the environment, health, and tourism as the driving
force. The government also decided to aim at increasing the nation's
nominal Gross Domestic Product (GDP) to about 650 trillion yen in
fiscal 2020.

The government also identified six priority fields: (1) the
environment and energy, (2) health, (3) Asia, (4) tourism and the
revitalization of local regions, (5) science and technology, and (6)
employment and human resources.

Major points of the new growth strategy

Q Increase nominal GDP to about 650 trillion yen in fiscal 2020.
Q Achieve a nominal economic growth rate of over 3 percent and real
economic growth of over 2 percent on average by fiscal 2020.
Q Lower the unemployment rate to the 3 percent level over the next
four years.
Q Create a new environment market of over 50 trillion yen and 1.4
million jobs by 2020.
Q Create a new health market of about 45 trillion yen and 2.8
million jobs by 2020.

11) Upper House member Yoshimura leaves LDP

NIKKEI (Page 2) (Full)
December 31, 2009

Liberal Democratic Party House of Councillors member Gotaro
Yoshimura (70, Fukuoka electoral district) sent a letter of
secession from the party to LDP headquarters by mail yesterday. The
step reflects Yoshimura's strong opposition to the LDP's official
endorsement of Satoshi Oie, 42, a former prefectural assemblyman,
for his electoral district. Yoshimura plans to run in next year's
Upper House election as an independent. Yoshimura is the fourth LDP
Upper House member to submit a letter of secession from the party in
December.

12) SDP's Fukushima demands replacement of MOFA, MOD officials in
charge of Futenma relocation

NIKKEI (Page 2) (Full)
December 31, 2009

In connection with the issue of the relocation of the U.S. forces'
Futenma Air Station in Okinawa, State Minister for Consumer Affairs
and Declining Birthrate Mizuho Fukushima, leader of the Social
Democratic Party (SDP), said on Dec. 30: "Officials who have not
been in charge in the past should take charge of this issue. The
cabinet as a whole would like to work on this issue properly under a
setup that will enable us to do so," thus demanding the replacement
of the officials in charge.

She explained that: "If the Ministry of Foreign Affairs (MOFA) and
Ministry of Defense (MOD) officials who decided to build an offshore
base in the coastal area of Henoko (in Nago City, Okinawa) under the
Liberal Democratic Party administration continue to be in charge, no
proposals for different solutions will ever emerge." She also
underscored her intention to work together with Democratic Party of
Japan Secretary General Ichiro Ozawa, who has been expressing a

TOKYO 00002949 007 OF 007


negative view on the current relocation plan agreed upon by Japan
and the U.S.

ROOS

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