DAILY SUMMARY OF JAPANESE PRESS 05/22/06

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05/22/06


INDEX:

(1) Japan, US to gear up for missile defense cooperation, extend
intelligence sharing network

(2) Who will elect Japan's prime minister? China's strategic
objective remains unchanged

(3) Ruling bloc approves national referendum bill in outline

(4) An outline of national referendum bill drafted by ruling
coalition

(5) Government to resume US beef imports possibly in July after
inspecting 35 meatpacking facilities in June, with determination
to fully check safety

(6) Distributors, food services industry still cautious about use
of US beef, to closely monitor consumers' responses

(7) Political chaos in Thailand affecting economic relations with
Japan, South Korea, FTAs not signed

(8) Government soon to purchase 100 million tons of greenhouse
gas emissions rights; Early purchase intended out of concern over
sharp rise in prices

(9) Divorce society and children; Sharp increase in discord
between parents over child support and meetings with children;
Children with divorced parents top 270,000

ARTICLES:

(1) Japan, US to gear up for missile defense cooperation, extend
intelligence sharing network

SANKEI (Page 3) (Full)
May 20, 2006

Japan and the United States will enter into an intergovernmental
study late this month in an aim to build an intelligence sharing
system, thereby integrating their respective Aegis ships and
ground-based radar to detect ballistic missiles, sources said
yesterday. This integration is intended to shape a final
agreement recently reached between the Japanese and US
governments on the realignment of US forces in Japan with an
emphasis on bilateral cooperation in the area of missile defense
(MD). In July, the two governments will enter into an agreement
on intelligence sharing.

The Japanese and US governments mull sharing intelligence between
Japan's Maritime Self-Defense Force and the US Navy through their
respective Aegis ships. In addition, Japan is considering the FPS-
XX, an advanced ground-based radar system of the Air Self-Defense
Force, for bilateral intelligence sharing. In the meantime, the
United States will also provide Japan with intelligence from its
early warning satellites and also from its X-band radar to be
installed in Aomori Prefecture.

This intelligence integration between the Self-Defense Forces and
US Forces Japan will make it possible for them to cover different
areas in their respective radar activities and to detect and
track missiles even more accurately.

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MSDF and US Navy Aegis ships are now already sharing intelligence
through a state-of-the-art system called Link-16. This system
will link the ASDF's base air defense ground environment (BADGE)
system, which will be interfaced with the FPS-XX. In addition,
the Link-16 system will be also connected to the US military's X-
band radar. Japan and the United States will go through these
integral steps to build a new intelligence sharing system.

The X-band radar will be set up in Aomori Prefecture this summer.
The Japanese and US governments will conclude an intelligence
sharing agreement in July, incorporating information security
regulations. The Defense Agency and the US Missile Defense Agency
will hold a meeting of their officials in Tokyo late this month
to enter into technical studies.

In August, the US Navy will deploy an Aegis ship-loaded with SM-3
missiles to shoot down ballistic missiles-to Yokosuka for the
first time. In response to the threats of North Korean and
Chinese ballistic missiles, Japan and the United States will
enhance their MD intercept capabilities.

(2) Who will elect Japan's prime minister? China's strategic
objective remains unchanged

SANKEI (Page 1) (Full)
May 19, 2006

Hiroshi Yuasa, Tokyo correspondent

These days, there were three interesting news reports on Japan-
China relations.

First of all, although Beijing abhors Foreign Minister Taro Aso,
it is reportedly ready to resume foreign ministerial talks with
him. Why is China ready to do so? Second, the Chinese government
has disclosed a diplomatic document that states it once took
"generous action" to waive any indictments of 1,000 Japanese war
criminals imprisoned in China. Why did China disclose such a
document? And third, why did the Keizai Doyukai (Japan
Association of Corporate Executives) release at this time
proposals that urge Prime Minister Junichiro Koizumi to give
second thoughts to his practice of paying homage at Yasukuni
Shrine?

These moves are not unconnected with China having intentionally
opted for a more flexible diplomatic tactic toward Japan.
However, we should note that though China's tactic may have
changed, its strategic objective remains unchanged.

To follow up these developments in chronological order, I see two
conceivable reasons for China's tactical shift.

First, Chinese President Hu Jintao recently summoned
representatives from seven Japan-China friendship organizations
to Beijing. He there strictly ordered them to work on the
candidates for Prime Minister Koizumi's position to give up any
idea of visiting Yasukuni Shrine. Hu thus has poked his nose into
Japan's domestic affairs. This has made it more difficult for pro-
China candidates to freely move, perhaps a mixed blessing for
them.

The Chinese foreign ministry is said to have advised Hu to avoid

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referring to Yasukuni in his meeting with visiting Japanese
delegations. In fact, however, this suggestion did not reach Hu.
In the end, Hu has continued to pressure Japan as usual. Chinese
officials, particularly the old school of Japan watchers in
Beijing, still think that Japan easily caves in to pressure.

Second, the summit meeting between US President Bush and
President Hu ended in failure. Hu, encountering in Washington
evidence of a rock-solid Japan-US alliance, deemed it impossible
to persuade President Bush to accept China's stance of decrying
Koizumi's Yasukuni homage. Achieving no significant results, Hu
seems to have realized that it will be difficult for the time
being to divide Japan and the United States.

Consequently, Beijing has now switched its Japan policy-from
saber rattling to hard thinking. China used to denounce the prime
minister for his Yasukuni homage. Even worse, China let its naval
vessels violate Japan's territorial waters. These incidents are
visible. However, China is now trying to engage those Japanese
political and business leaders who are pro-Beijing to skillfully
maneuver them to move in line with China's interests. Such
tactics are difficult to see.

Japanese are naive when it comes to intelligence activities, so
this tactic is very difficult to counter in point of fact.

Outwardly, China is making efforts to negotiate with Japan and
seems to be trying to soften the Japanese public's backlash.
Behind the scenes, however, China is trying to attain its
strategic goals through intelligence tactics. However, anti-
Japanese feelings remain a nice tool for Beijing to use hold
Chinese people to the communist party. Yasukuni Shrine is
therefore very convenient for Beijing to use as a target for a
public that has a grudge with Japan.

What is an example of Beijing's intelligence tactic? One is the
use of a "honey trap" baited with women. Beijing uses Chinese
researchers and others in Japan. Their targets are the Japanese
business community and media.

In Taiwan, Xu Wen-long, a pro-independence business leader who
supported President Chen Shui-bian, issued a statement of
apostasy last year. His company had four firms in China, so
everybody felt that he was made to change his mind under
pressure. What happened in Taiwan can also happen to Japanese
companies as long as they are doing business in China.

In its May 9 proposal, Keizai Doyukai asked the prime minister to
reconsider his Yasukuni visits. This reminded me of something
close to Xu's statement. Otherwise, I would have thought that the
organization might have changed its mind on its own.

Anyway, many considered Keizai Doyukai's proposal as an
intervention in the Liberal Democratic Party's presidential
election and wonder why this timing. This probably tells us a
lot about how intelligence tactics show their true colors.

In dealing diplomatically with Japan, Hu at first just rattled
his saber. That is because he knew Tokyo's weakness about Japan
being called the "aggressor." China condemns the prime minister's
Yasukuni homage as a revival of militarism. However, most
Japanese do not believe such charges.


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China, since coming into being as the People's Republic of China,
has so far been involved in a total of 11 armed conflicts with
foreign countries, such as its war with Vietnam and its invasion
of Tibet. Nowadays, we cannot make light of China's expansionism.

What two countries engaged in bilateral relations must do is to
respect each other-instead of trying to compel the other side to
submit to it. However, it is the lowest of all tactics to try to
replace the prime minister of another country. If China wishes to
cooperate with Japan instead, the door is always open on our
side.

(3) Ruling bloc approves national referendum bill in outline

YOMIURI (Page 4) (Abridged slightly)
May 20, 2006

Following the major opposition Minshuto's (Democratic Party of
Japan) rejection to jointly propose a national referendum bill
specifying a set of procedures for constitutional revision, the
Liberal Democratic Party and New Komeito formally decided
yesterday to independently submit the bill to the ongoing Diet
session, approving the bill's outline. The ruling coalition aims
to submit the bill on May 26.

The bill is designed to set the voting age at 20 and require
voters to indicate approval or disapproval of constitutional
revision in their ballots, voiding blank votes.

The bill is totally free of media regulations, such as requiring
the media to give "consideration" so as not to influence voters'
views. Television and radio broadcasters will be prohibited from
airing national referendum-related commercial messages for seven
days before the poll.

Minshuto also plans to submit a counter-plan later this month.
The largest opposition is calling for lowering the voting age to
18, counting blank ballots as disapprovals, and making other
vital national issues subject to national referenda.

The ruling coalition aims for continued talks with Minshuto to
reach an agreement on a compromise plan with an additional clause
specifying Minshuto's calls as "future challenges." But with the
ruling coalition and Minshuto remaining wide apart, national
referendum legislation is unlikely to clear the Diet in the
current session.

(4) An outline of national referendum bill drafted by ruling
coalition

YOMIURI (Page 4) (Full)
May 20, 2006

Overview
All Japanese nationals aged 20 or older shall have the right to
vote in national referenda.

Publicity
When constitutional revision is initiated, a council shall be
established in the Diet to notify the people of a constitutional
revision bill.

Voting

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Each voter shall mark O for approval or X for disapproval of a
constitutional revision bill.

Efficacy of national referendum
Amendments to the Constitution shall be approved with the
affirmative vote of a majority of all votes cast. The minimum
voter turnout shall not be set.

Restrictions
National and local public servants and schoolteachers shall not
conduct national referendum-related activities by taking
advantage of their position. Television and radio broadcasters
shall not air national referendum-related messages for seven days
before the voting day.

Initiating constitutional revision
Amendments shall be classified by their content.

Supplementary provision
Constitutional amendments would go into effect two years from the
day of promulgation.

(5) Government to resume US beef imports possibly in July after
inspecting 35 meatpacking facilities in June, with determination
to fully check safety

NIHON KEIZAI (Page 5) (Full)
May 20, 2006

The Japanese and US governments reached a broad agreement
yesterday to start procedures to resume beef trade. The Japanese
government intends to officially decide in June to resume imports
and approve imports in July. As part of efforts to alleviate
consumers' concern about the safety of US beef, both sides have
also prepared a framework for the Japanese government to check
its safety. Based on this framework, the government will start in
late June investigating 35 meat-processing facilities in the US
before resuming imports.

Procedures

In the latest three-day talks, the Japanese government closely
examined the results of the US government's re-inspections of its
domestic safety-management system and came up with the judgment
that the US findings were acceptable and contained no problems.
Japan has finally paved the way for resuming US beef imports four
months after the imposition of the second ban. Prime Minister
Junichiro Koizumi told reporters after the end of the talks:
"Experts fully discussed the issue and reached a conclusion. So
the government will follow their decision. Once both sides agree
to import conditions, Japan will resume imports."

The Japanese government will first hold public hearings with
consumers to report on the contents of the agreement at about 10
locations across the nation, taking two to three weeks. By
explaining Japan's determination to take its own safeguard
measures, the government aims to seek public understanding.

Included among the measures agreed on between Japan and the US
are inspections by Japanese inspectors at 35 meat-processing
facilities in the US before Japan resumes imports, as well as
their participation in snap inspections by the US to see if the
facilities are observing such requirements as the removal of

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specified risk materials and the observation of safety
procedures.

After detailing the agreement to the public, the Japanese
government will hold a discussion with the US on how to cope with
problems that may arise after trade is resumed. In mid-June,
before the prime minister's visit to the US, Japan will
officially decide to resume imports. Later, the government will
dispatch responsible officials of the Forestry and Fisheries
Ministry and the Health, Labor and Welfare Ministry to the US to
conduct pre-import inspections.

Japan has decided to allow problem-free meatpacking facilities to
export beef to Japan in succession. But the US is calling on
Japan to open its market to all facilities simultaneously. Once
all facilities are inspected, the Japanese government will give
formal approval for imports from the 35 facilities as early as
July.

After resuming imports, the Japanese government will constantly
check the safety of imports by upgrading its quarantine system at
airports and other places, as well as having Japanese inspectors
accompany US snap inspections.

(6) Distributors, food services industry still cautious about use
of US beef, to closely monitor consumers' responses

NIHON KEIZAI (Page 5) (Full)
May 20, 2006

The nation's food and restaurant industries have generally
welcomed the agreement reached between the Japanese and US
governments to resume US beef trade. Based on the view that
consumers are taking a tougher look at the United States'
management system, many supermarket chains are still cautious
about handling US beef.

In announcing his company's financial statement yesterday, Nippon
Meat Packers, Inc. President Yoshikiyo Fujii said: "It is
important to win consumers' confidence. We will be gradually
importing products in accordance with the needs of our clients,
including distributors and restaurants." Fujii, however, also
took this cautious view: "It might take a year or so until market
recovery is set." Marudai Food Co. President Tokuo Kudara also
said in an earnings announcement: "Distributors remain
considerably cautious."

A member of the marketing department of Colowide Co., a leading
Japanese-style pub operator, said: "We will carefully monitor
what responses consumers and our rivals will make. We will take a
more cautious stance than before about using (US beef) on our
menus." Rex Holdings, which operates the barbeque restaurant
chain store Gyu-Kaku, has arranged a system to use Australian or
domestic beef over the past two years and a half since the
government imposed a ban on US beef imports the first time.

Supermarkets are also negative about handling US beef. A
spokesman of Ito-Yokado Co. said: "We have no plan to place US
beef on our store shelves." Aeon Corporation President Okada
said: "Out of fear of another case of BSE contamination,
consumers might not buy US beef even if the product is put on the
shelves."


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When the import ban was removed (last December),Japan
Cogeneration Center (CGC),a cooperative buying organization in
Shinjuku, Tokyo, with supermarkets across the nation as members,
promptly began purchasing US beef. This time, however, "nothing
has been decided yet," as said by a CGC spokesman. He added: "In
the previous case, a second ban was imposed only three days after
we put products on store shelves, throwing cold water on our
company's plans."

In contrast, the restaurant chain Yoshinoya D&C Co. is eager to
import US beef. The company is ready to exchange information with
suppliers and make preparations to put the beef bowl back on its
menu. The company has already incorporated earnings from beef
bowls in its estimate business results in the latter half of the
business year ending in February 2007. Once imports are resumed
in July, the beef bowl will be added to its menu in early
September at the earliest after a lapse of two years and seven
months, with a preparatory period of about two months, including
transportation by ship.

Matsuya Foods Co. President Toshio Kawarabuki also said in an
earnings announcement on May 10: "We would like to use US beef in
a positive manner," expressing high hopes on the resumption of US
beef imports.

(7) Political chaos in Thailand affecting economic relations with
Japan, South Korea, FTAs not signed

SANKEI (Page 2) (Abridged)
May 22, 2006

Tomoo Iwata, Bangkok

A political crisis in Thailand, as evidenced by the April 2
parliamentary elections that were subsequently ruled
unconstitutional, has delayed the country's timetable to conclude
free trade agreements (FTAs) with Japan and South Korea, casting
dark clouds on its economic relations with the two countries.

Although Japan and Thailand reached a broad agreement last summer
to sign an FTA that would bring about a major turning point in
trade strategy terms, the two governments have yet to do so.

Prime Minister Thaksin was initially scheduled to visit Japan on
April 3 to sign an FTA with Prime Minister Koizumi. But the plan
was called off due to dissolution in February of the lower house
of the Thai National Assembly in the wake of massive protest
rallies demanding Thaksin's resignation.

Following the April 2 elections, the lower house planned to call
a session in early May. But King Bhumibol criticized the
elections, in which only candidates of the ruling Thais Love
Thais party ran, as "undemocratic," promoting the Constitutional
Court to rule the polls unconstitutional and annul them. As a
result, the signing of an FTA with Thailand has further fell
behind the schedule.

When Thailand will be able to hold another election remains
unclear, as Election Committee members rejected the court's
recommendation to resign for mishandling the elections, saying,
"The court is trying to blame the Election Committee." The
Election Committee proposed new elections for October 22. Even if
the question of resignation of the Election Committee was

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settled, chances are that Thailand will not have a new government
until November. This means that Japan will not be able to sign an
FTA with Thailand until the end of this year. "A further delay in
signing a pact may force Japan and Thailand to start FTA talks
all over again," a government source said apprehensively.

South Korea also held cabinet-level talks with the Association of
Southeast Asian Nations (ASEAN) in Manila on May 16 in which
South Korea signed FTAs with all ASEAN members except for
Thailand.

Protracted political chaos in Thailand has begun taking its toll
on ASEAN's goal of economic integration.

(8) Government soon to purchase 100 million tons of greenhouse
gas emissions rights; Early purchase intended out of concern over
sharp rise in prices

MAINICHI (Top Play) (Full)
May 22, 2006

The government will shortly start purchasing rights to emit
greenhouse gasses, including carbon dioxide (CO2). As the last
resort to achieve the reduction target set under the Kyoto
Protocol, it plans to purchase approximately 100 million tons of
emissions rights (in CO2 terms) by the 2012 deadline. It intends
to begin purchasing such rights before the reduction period
starts in 2008 in order to secure such rights on a stable basis
at an early date. However, there is a limit to emissions rights
available in the world. In addition, European countries are ahead
of Japan in securing such rights, permeating a sense of alarm
that if Japan does not take action quickly, it would not be able
to secure enough emission rights to reach its targeted amount.

The government will purchase emissions rights mainly through the
Clean Development Mechanism. Under the mechanism, if
industrialized countries provide technologies and funds for
projects for developing countries to cut greenhouse gas
emissions, then amounts of carbon emissions achieved by the
developing countries can be credited to the industrialized
countries. Since most of such projects are carried out by the
private sector, the government will purchase emissions rights
from the private sector.

Japan has thus far approved 49 CDM projects to be carried out by
domestic companies. Major projects include: (1) collecting and
degrade HFC23, a greenhouse gas produced as a by-product in the
process of producing hydrochlorofluorocarbon (China, India,
etc.); (2) wind-power generation (South Korea, Argentine, etc.);
and (3) collecting methane gas (Chile, etc.).

The government will advertise for companies that would sell
emissions rights to the Japanese government as early as July, and
purchase such rights, based on individual negotiations. The
government has thus far secured 12.2 billion yen as funds to
purchase such rights for a period through 2012. Additional
outlays are expected to occur in fiscal 2007 and after. The
government plans to cover approximately 1.6% of the amount Japan
is mandated to cut under the Kyoto Protocol, by purchasing
emissions rights. European countries are ahead of other countries
in securing emissions rights. It is said that the Netherlands has
already secured emissions rights covering about 80% (or 81
million tons) of its target for about 71 billion yen. In

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addition, emissions rights worth approximately 300 million tons
seem to have been already sold.

Demand for emissions rights through 2012 in the world is
estimated to reach approximately 700 million tons, while the
amount of such supplies is estimated to be at 500 to 1,200
million tons. The average price of emissions right is 5 to 6
dollars per ton, but it is projected that it could go up two to
five-fold.

The government intends to stabilize the price of emissions rights
by paying part of bills in advance so that it can obtain a
certain amount of emissions rights at low prices and at an early
date. Chances, however, are the government may face a big
increase in such payments, depending on the future movements of
the prices.

(9) Divorce society and children; Sharp increase in discord
between parents over child support and meetings with children;
Children with divorced parents top 270,000

MAINICHI (Page 3) (Excerpts)
May 19, 2006

The Supreme Court has made a DVD with a drama urging parents
facing the crisis of divorce to give priority to their children.
Behind this unusual effort is the problem of Japan becoming a
"divorce society," with the number of divorces of married couples
with underage children topping 160,000, according to a
demographic survey in 2004. Taking social measures has become
necessary due to an increase in disputes between parents over
payments of child-rearing costs and arrangements for parents who
have lost child custody in a divorce case to see their children.

The drama starts with the mother of Emi, a first grader at an
elementary school, deciding to divorce, because of constant
quarrels with her husband over how to balance work and child
rearing.

The camera follows the efforts of Emi to deal with the issue. In
an attempt to reconcile her parents, she proposes watching a
movie together on TV, but they refuse. She shuts a door and
watches TV on her own. On another night, she hears her parents
quarrelling over the sharing of the cost of raising her and which
side should have custody of their child: "The one who can afford
education fees should raise her" or "You should pay portions I
cannot afford." Emi prays: "This is perhaps my fault. I will
behave myself. So, please do not divorce."

Anxieties stress Emi out. She eventually refuses to go to school,
after throwing a temper tantrum at school. The father on her
father's side advises the couple: "You can file for arbitration.
If you continue to have rows, Emi will continue to be unhappy."
The drama realistically visualizes physical and mental changes
that occurred in the child, who faces the divorce of her parents.

According to a demographic survey in 2004, underage children
whose parents divorced like Emi's topped 270,000. The Ministry of
Justice statistics of the same year reveal that the number of
arbitrations of those who newly filed for child custody regarding
the payments of the cost of rearing children, and negotiations
for the parent that lost child custody to see its children after
a divorce reached 22,273, which is more than double the number

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ten years ago.

The Family Problem Information Center is an organization
consisting of former family court researchers who help broken
families by arranging talks for the parent who has lost child
custody to see his or her kids. Executive Director Akio Nagata
pointed out: "I suppose that since more fathers now take part in
child rearing, there are more cases in which husbands and wives
fight over child custody or seek arbitration so that they can see
their children in compensation for their failed attempt to obtain
child custody.

The Osaka family court has made an animated movie. It is designed
to convey to parents changes occurring to children whose parents
are separated. The court shows the movie to them while they wait
for arbitration there. Researchers at the family court have held
orientations using images on a PC since 2004. They have urged
divorce-bound couples to give consideration to the wishes of
their children and their relations with their parents, before
deciding which side should have child custody. One researcher
said, "Most people take part in an orientation and listen to the
video ardently.

This researcher added, "We are making efforts, but the family
court can only work on people who use us." Ninety percent of
couples divorce amicably. Only 10 % of couples file their case
with a family court.

SCHIEFFER