DAILY SUMMARY OF JAPANESE PRESS 05/23/06

UNCLAS SECTION 01 OF 10 TOKYO 002836 SIPDIS SIPDIS DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; SECDEF FOR JCS-J-5/JAPAN, DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05/23/06 INDEX: (1) Poll on Koizumi cabinet, political parties, post-Koizumi candidates, USFJ realignment, education law revision (2) Outgoing Keidanren Chairman Okuda expresses eagerness to restore strained Japan-China relations; Resumption of donations likely to affect politics (3) China may attempt to divide Japan (4) Cabinet decision on Futenma relocation will not specify "elimination of danger" on grounds that it was confirmed by defense chief; Flight paths to be improved instead (5) Yosano masterminds establishment of Council on Unified Reform of Fiscal and Economic Systems; Panel will likely have great impact on post-Koizumi administration; Takenaka's influence on wane (6) Post-Koizumi race: Researching Taro Aso (Part 4) ARTICLES: (1) Poll on Koizumi cabinet, political parties, post-Koizumi candidates, USFJ realignment, education law revision ASAHI (Page 4) (Full) May 23, 2006 Questions & Answers (Figures shown in percentage, rounded off. Parentheses denote the results of the last survey conducted April 22-23.) Q: Do you support the Koizumi cabinet? Yes 45 (50) No 39 (36) Q: Which political party do you support now? Liberal Democratic Party (LDP) 34 (38) Democratic Party of Japan (DPJ or Minshuto) 19 (17) New Komeito (NK) 3 (3) Japanese Communist Party (JCP) 2 (2) Social Democratic Party (SDP or Shaminto) 2 (2) People's New Party (PNP or Kokumin Shinto) 0 (0) New Party Nippon (NPN or Shinto Nippon) 0 (0) Liberal League (LL or Jiyu Rengo) 0 (0) Other political parties 1 (0) None 37 (34) No answer + don't know 2 (4) Q: As likely candidates for the next prime minister after Mr. Koizumi, there are now some names coming up, such as Mr. Taro Aso, Mr. SHINZO Abe, Mr. Sadakazu Tanigaki, and Mr. Yasuo Fukuda. Who do you think is appropriate for the next prime minister? Taro Aso 3 (4) Shinzo ABE 41 (45) Sadakazu Tanigaki 1 (3) Yasuo Fukuda 29 (20) Other persons 16 (17) TOKYO 00002836 002 OF 010 Q: What would you like the next prime minister to prioritize in particular? (One choice only) Improve Japan's foreign relations 14 Economic stimulus measures 21 Fiscal reconstruction 14 Low birthrate countermeasures 25 Correct economic disparities 21 Q: The Japanese and US governments have agreed on the realignment of US forces in Japan. To what extent are you interested in the US military's realignment? (One choice only) Very interested 23 Somewhat interested 49 Not very interested 21 Not interested at all 5 Q: The Japanese and US governments have decided to relocate Futenma airfield to another site in Okinawa Prefecture and redeploy US Marine Corps troops from Okinawa to Guam in order to alleviate Okinawa's base-hosting burden in the process of realigning the US military presence in Japan. What do you think about the US military's realignment this time? (One choice only) Appreciate very much 7 Appreciate somewhat 41 Don't appreciate very much 35 Don't appreciate at all 10 Q: According to the agreement reached this time, Japan will pay for new facilities to be built along with US military base relocation. Japan's cost-sharing burden includes a fiscal outlay of about 700 billion yen for infrastructure construction in Guam. Is this cost-sharing burden convincing to you? Yes 17 No 77 Q: Do you think the government has fulfilled its accountability to the Japanese people for the realignment of US forces this time? Yes 6 No 84 Q: Do you think this US military realignment will be a plus to Japan's national security, or do you otherwise think it will be a minus? Plus 39 Minus 26 Q: The government has introduced a bill to the Diet to amend the Fundamentals of Education Law, stipulating an ideal of education. The DPJ has also worked out its counterproposal. To what extent are you interested in revising the education law? (One choice only) Very interested 33 Somewhat interested 44 Not very interested 18 TOKYO 00002836 003 OF 010 Not interested at all 4 Q: Patriotism is now a point of contention over the issue of revising the education law. To what extent do you think you have patriotism in you? (One choice only) Very much 28 Somewhat 51 Not very much 14 Not at all 5 Q: Are you in favor of including the wording "love Japan and its land" in the education law as an objective of education? Yes 56 No 29 Q: What do you think should be done about the education law? (One choice only) Amend the law at the current Diet session 12 Continue discussions without taking a vote at the current Diet session 73 No need to amend the law 9 Polling methodology: The survey was conducted May 20-21 across the nation over the telephone on a computer-aided random digit dialing (RDD) basis. Respondents were chosen from among the nation's voting population on a three-stage random-sampling basis. Valid answers were obtained from 1,813 persons (53%). (2) Outgoing Keidanren Chairman Okuda expresses eagerness to restore strained Japan-China relations; Resumption of donations likely to affect politics YOMIURI (Page 11) (Full) May 19, 2006 Hiroshi Okuda held his last press conference as chairman of the Japan Business Federation (Nihon Keidanren) before leaving office at the regular general meeting on May 24. Okuda said that the prime minister and he were "on the same wave length." However, he expressed eagerness to repair Japan-China relations that have been strained over the prime minister's visits to Yasukuni Shrine. Some have labeled Okuda as a "giant among Keidanren chairmen," but he has still left many tasks for incoming chairman Fujio Mitarai to tackle. "When I assumed the chairmanship, a sense of helplessness and uncertainty loomed over the Japanese economy. Later, however, politics and the economy were put back on the right course and both are now in considerably good shape. I was lucky." Summarizing seven years in office, he made the above remark at his final press conference. He gave his own achievements a mark of 70 or 80 out of 100 points. Backed by the strength of Toyota Motor Corporation, from which he hailed, Chairman Okuda has been regarded as the most influential chief executive in Japan's business world. Business circles always paid attention to his candid remarks. Okuda has supported Prime Minister Koizumi's reform initiative. TOKYO 00002836 004 OF 010 Regarding mergers and acquisition (M&A),however, he drew a clear line with the American M&A style that lets the strong prey on the weak and he placed importance instead on a conventional Japanese management style. Keidanren allowed Livedoor Co. to become a member even after the discovery of its violation of the Securities and Exchange Law. Asked about this, Okuda admits: "That was a mistake." Regarding recent takeover cases, including a business tie-up between Rakuten and TBS, he criticized as "lazy" the executives of such companies for not paying attention to the moves of their companies' shares." "(Japan-China relations) have been cold politically but hot economically. It is also necessary for the business sector to work on the political world in order to bring about a thaw in relations with China. We in the private sector would like to do our best to attain that end." Many former business leaders cite as Okuda's greatest achievement his efforts to make it easier to relay the business world's views to the government. Regarding his ties with Prime Minister Koizumi, Okuda said: "Since the prime minister and I are on the same wave length regarding structural reforms, we get along well with each other." He has never criticized the prime minister's visits to Yasukuni Shrine, but he said that even after he steps down, he would do his best to repair relations with China. Keidanren resumed political donations in 2004, defining political donations as "a part of our contribution to society." The total amount of political donations by Keidanren member companies increased from about 1.9 billion yen in 2003 to about 2.5 billion yen in 2005, resulting in increasing Keidanren's influence over politics. "To my regret, scandals involving companies were exposed one after another. I was unable to demonstrate leadership as chairman." Okuda also made the above statement. He reviewed Keidanren's Business Behavior Chapter and set up a system to enable Keidanren to urge problem members to leave the organization. He added: "We were able to get many hits, but there were no home runs." On tax reform, he succeeded in persuading the government to reduce taxes on investments in such areas as research and development, and information technology, but the corporate tax rate has yet to be lowered, despite Keidanren's request. On pension reform in 2004, Keidanren's call for holding down the insurance rate to 15% was also unsuccessful. Senior Keidanren members were chagrined at the result, recognizing it as "our clear defeat." The Okuda vision in January 2003 proposed raising the consumption tax, but this proposal has also been left unattended. (3) China may attempt to divide Japan SANKEI (Page 3) (Full) May 21, 2006 China experts see changes in China's policy toward Japan. Some of them are pointing to China's changeover to a flexible stance of dealing with Japan, while others are noting China's switchover to a tactic of dividing Japan, as is evident from a rush of delegations from the government and ruling coalition this year to visit China. TOKYO 00002836 005 OF 010 In February, Economy, Trade and Industry Minister Toshihiro Nikai visited China, where Nikai met with Premier Wen Jiabao and Commerce Minister Bo Xilai. In March, Finance Minister Sadakazu Tanigaki visited that country to meet with Finance Minister Jin Renqing, and Internal Affairs and Communications Minister Heizo Takenaka also went over to China. Meanwhile, the ruling coalition has also sent delegates to China. In February, Hidenao Nakagawa, chairman of the LDP's policy board, and other ruling executives attended a meeting in Beijing of officers from the Japanese and Chinese ruling parties. In March, seven organizations for friendship between Japan and China sent their members to China, including former Prime Minister Ryutaro Hashimoto, who presides over the Japan Association for the Promotion of International Trade (JAPIT),and former Foreign Minister Masahiko Komura, who chairs the Japan-China Friendship Parliamentary League. In the meantime, there have been almost no VIP visits from China to Japan, with the exception of Vice Foreign Minister Wu Dawei and few others, ever since Vice Premier Wu Yi suddenly canceled her meeting with Prime Minister Junichiro Koizumi and returned home in May last year. As seen from those visits, there have only been one-way pilgrimages from Tokyo to Beijing. "China is probably thinking to shake up the post-Koizumi candidates expected to run in this September's LDP presidential election," one LDP lawmaker said. In March, Wen stressed China's policy toward Japan, recounting that China would continue a strategic dialogue with Japan, promote private-sector exchange programs, and develop economic trade relations. "Once the Chinese economy falls into minus growth, they will need Japan's cooperation," a source close to Japan- China relations said. This source added, "They have a sense of crisis, thinking to themselves that if they only keep up attacking the prime minister for his Yasukuni visits, they won't be able to find a way out." Meanwhile, China has been unilaterally exploring natural gas near the equidistance line of Japanese and Chinese exclusive economic zone (EEZ) waters in the East China Sea. As is well known, there are still many difficult problems lying between Japan and China. One of these pending issues is disposing of poison gas shells and other chemical weapons that reportedly were left behind in China by the Imperial Japanese Army. Another problem is China's claim over Japan's inherent territory, the Senkaku isles. In addition, there is the question of how to demarcate EEZ waters. China's military spending is also unclear. How will Japan face up to China? Japan will now have to conduct its own strategic diplomacy. (4) Cabinet decision on Futenma relocation will not specify "elimination of danger" on grounds that it was confirmed by defense chief; Flight paths to be improved instead OKINAWA TIMES (Page 2) (Full) May 23, 2006 TOKYO - Turning a deaf ear to Okinawa's strong call, the government has decided not to specify the "elimination of the danger" of Futenma Air Station in the planned cabinet decision on the implementation of the Japan-US final report on US force realignment, a senior Defense Agency official revealed yesterday. The official explained that the decision was made based on the TOKYO 00002836 006 OF 010 perception that the matter has been confirmed by an agreement between Okinawa and the central government. ASTERISK ASTERISK ASTERISK ASTERISK ASTERISK The official played up the government's plan to reduce the risks by such measures as making corrections in the flight paths at Futenma Air Station until it is completely relocated to the coastal portion of Camp Schwab in 2014. Touching on Okinawa's strong reaction to the wording of the cabinet decision, which has been delayed, the official noted: "(The last ten years) has been an accumulation of such responses. That kind of reaction from Okinawa will not result in reducing the burden on the prefecture." The official underscored the government's plan to advance work based on the agreement with Okinawa. In a regular press conference yesterday, Administrative Vice Defense Minister Takemasa Moriya indicated that a cabinet decision would not be made until after the 4th Pacific Islands Summit to be held in Okinawa on May 26-27, saying: "The earlier, the better. But given the local circumstances, we have no deadline." He alluded to the government's possibly making the cabinet decision next week, noting, "We want to decide on it as soon as possible by obtaining local understanding and cooperation." Cabinet Office, Nago mayor agree that Defense Agency must not race to hasty cabinet decision NAGO -- Yoshinobu Higashi, director-general for Okinawa affairs of the Cabinet Office, called on Nago Mayor Yoshikazu Shimabukuro at his office yesterday. The two leaders shared the view that the government should avoid a hasty cabinet decision on US force realignment, which the Defense Agency is aiming for. After the talks with Higashi, Shimabukuro said, "Word is out in the Defense Agency that a cabinet decision would be made on (May) 30 or (June) 2. But we agreed with that side (Cabinet Office) that a decision must not be made hastily." He also explained that Higashi had not briefed him on the proposed cabinet decision in detail. Tokyo and Washington has agreed to build 1,800-meter runways to relocate the heliport functions of Futenma Air Station to the coastline of Camp Schwab. Nago in reaction demanded that the size of the runways be reduced to 1,500 meters. Okinawa Vice Governor Hirotaka Makino also conveyed his opposition to the two-runway plan to Deputy Chief Cabinet Secretary Masahiro Futahashi. Many Okinawa residents are opposed to the cabinet making a decision on the assumption that the prefecture will approve it. Shimabukuro commented about proposed economic packages: "We will discuss the matter thoroughly with the central government." (5) Yosano masterminds establishment of Council on Unified Reform of Fiscal and Economic Systems; Panel will likely have great impact on post-Koizumi administration; Takenaka's influence on wane MAINICHI (Page 3) (Excerpts) TOKYO 00002836 007 OF 010 May 23, 2006 The Council on Unified Reform of Fiscal and Economic Systems (CURFES) of the government and ruling parties yesterday held its first meeting. It is a supreme decision-making panel launched by State Minister for Economic and Fiscal Policy Hajime Yosano. The Council on Economic and Fiscal Policy, the central command for the Koizumi reform initiative, will also be integrated into this panel. Yosano has relegated a major task of cutting government spending to Liberal Democratic Party (LDP) Policy Research Council Chairman Hidenao Nakagawa, with whom he had once engaged in a fierce tax hike argument. In the meantime, he has asked Economy, Trade and Industry Minister Toshihiro Nakagawa to draft an outline of an economic growth strategy, in which Nakagawa had dug in his heels. Yosano has thus created a new role-sharing system, diminishing the presence of Internal Affairs and Communications Minister Takenaka. Close-up 2006 Many members of the government and the ruling parties are surprised to see key officials replaced in only a couple of months. They attribute it to Takenaka rapidly losing power and Yosano expanding his role in policy discussions in the administration. Fierce debates between Yosano and Sadakazu Tanigaki on one hand and Nakagawa and Takenaka on the other have continued since last year over such issues as raising the consumption tax or an economic growth rate to be targeted. On May 11, Yosano and Nikai visited Nakagawa at the LDP headquarters and signed an agreement document delegating Nikai to finalize an outline of an economic growth strategy. Discussing economic growth strategy is one of the areas for which the CURFES is responsible. The launching of the panel stems from this concept, following a successful effort by Yosano. Behind such a shrewd effort is his desire to leave Takenaka out and to bring Nikai into the fold. On the other hand, Nakagawa, who regards himself as the guardian of Chief Cabinet Secretary SHINZO Abe, a frontrunner in the race to elect a successor to Koizumi, wants to obtain prospects for fiscal reform by using the CURFES. Though he is lined up with Yosano, gaps in views on such issues as hiking the consumption tax still remain between the two. During the first meeting on the 22nd, Nakagawa did not forget to make it clear that the government should fully discuss the issue with the party. Their relations are like those of enemies who were placed by fate in the same boat. The next administration will have to come up with a policy of succeeding, developing and correcting Koizumi's reform line when compiling the fiscal 2007 budget, while making efforts to reconstruct the foreign policy line from October through December. Due to the limited time available, whatever conclusion the panel reaches on package reform of expenditures and revenues will likely be respected as is. Discussions by the panel will set a direction for economic policy and budget compilation by the next administration. The development of discussions by the panel and the fate of leadership could set the political agenda for the post-Koizumi administration. TOKYO 00002836 008 OF 010 (6) Post-Koizumi race: Researching Taro Aso (Part 4) NIHON KEIZAI (Page 2) (Full) May 20, 2006 Taro Aso started playing golf after becoming a politician. In defiance of his father, Aso had been determined never to play golf. But he changed his mind on the advice of Susumu Nikai, a veteran politician from the Kyushu region, where Aso also comes from. Nikai told Aso that politicians should either play mahjong or golf. Aso is now a player with a single-digit handicap. Failure of business He has a sense of pragmatism that was cultivated from his experience of being a businessman. He failed a foray into the food services industry and a venture into ore mining overseas. He once said that those who listened to other persons' advice should be suitable for a company president's post During the 2001 Liberal Democratic Party (LDP) presidential campaign, in which he competed with Junichiro Koizumi and Shizuka Kamei, Aso stressed the importance of concentrating funding in public works projects such as the construction of a Tokyo outer ring road underground, the laying of fiber-optic cables, and improvement in international airports. Drawing a line with Koizumi, Aso stated in the campaign, "It is necessary to prepare anesthetics to ease the pain caused by reforms. Economic recovery is needed for fiscal reform." He went along with Koizumi's reform drive only after Koizumi won big in the presidential race, though he has raised opposing views from time to time. Regarding the widening social disparity issue, a possible major campaign issue in the September LDP presidential election, Aso said, "People feel a social divide when reforms are carried out rapidly. But I don't think the social gap has widened." He has criticized the idea of placing priority on fiscal reconstruction by an early consumption tax hike, saying, "Reform may change things for the worse. Consideration should be given to regional areas." He is now consciously playing up differences between his reform policy and Koizumi's. He has made controversial remarks, such as his claim that the Korean people were willing to change their Korean names to Japanese ones; that Taiwan is a country; and that China's military power is a "threat" to Japan. One of his aides said, "He has little conception about watching what he says." Aso has the image of being a hawk politically, but he basically is able accept the reality. He wrote this in a local newspaper about the Japan-US alliance, "Even children have a wisdom that it is good to get along with a strong person if you have a dangerous person around you." He said, "It's wrong to call Japan's defeat in the war as the end of the war. He also clearly stated: "The Self-Defense Forces are a military." This kind of his thinking is similar to that of Koizumi, who has brought "common sense" to the security argument. Refrains voluntarily from visiting Yasukuni Shrine The major issue is whether he will visit Yasukuni Shrine (if he becomes prime minister). Aso first visited the Shinto shrine at the age of 11 on April 28, 1952, when the San Francisco Treaty TOKYO 00002836 009 OF 010 came into effect, along with his grandfather, then Prime Minister Shigeru Yoshida. He never forgets his grandfather who always bowed his head at the shrine. His grandfather told him, "Today is the day when Japan becomes independent." Aso continues to support Koizumi's shrine visits, saying, "Other countries should not interfere in the prime minister's visits to the shrine." There are differences in specifics between Aso and Shinzo Abe, but the public sees them as alike. Aso has visited Yasukuni Shrine every year since he became a politician, but he stopped visiting there after assuming the foreign minister's post. He explained: "I must give preference to national interests over personal beliefs. It is problem to entrust to one religion the important task of honoring the spirits of the nation's war dead." He indicated in his remarks that he might continue to refrain from visiting the shrine. He also indicated that he was looking into making Yasukuni Shrine a secular organization or having Class-A war criminals removed from the shrine where they are enshrined. However, Aso's strategy of playing up his differences with ABE is now a double-edged sword since forces opposing ABE have turned to supporting Yasuo Fukuda. Aso is now looking for ways to play up his own political identity in between ABE and Fukuda. Asia diplomacy Improvement in the transparency of China's military power is important, and Japan welcomes China's constructive involvement in East Asia. The US military's deterrence power will be maintained and strategic ties with India and Australia will be strengthened. Regarding the North Korea issue, Japan, the United States, and South Korea will make efforts in unison. (Speech delivered in May in Washington) Yasukuni Shrine issue We should think of a system under which the war dead would appreciate our visits to the shrine. It is a significant problem that (Class-A war criminals) who were not killed in the war are enshrined. (Speech in May in Tokyo) Social divide Those who live in regional areas feel more a sense of remoteness than those living in urban areas. Consideration should be given to local areas. I wonder why everybody thinks all of Japan should be like Tokyo. (interview in May by the Nihon Keizai Shimbun) Consumption tax hike I am not a fundamentalist when it comes to fiscal reconstruction. When the economy is rising, what should be avoided is doing something that will nip recovery in the bud. The targeted consumption rate should be 10%. (Interview in January by the Nihon Keizai Shimbun) Constitutional reform The Constitution should be amended. It was established under the US Occupation. Japan and the international situation have greatly changed since then. Since environmental issues have now come up, TOKYO 00002836 010 OF 010 I think Article 9 is not the only one that should be amended. (Press conference in January) SCHIEFFER