GOJ INFIGHTING HAMPERING EAST CHINA SEA TALKS

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 005457

SIPDIS

SIPDIS

DOE FOR VICTOR DER AND JOSEPH GIOVE
DOD FOR OSD SHINN/SEDNEY/HILL/BASALLA
USFJ FOR J00/J01/J5

E.O. 12958: DECL: 12/03/2017
TAGS: ECON ENRG JA PGOV CH
SUBJECT: GOJ INFIGHTING HAMPERING EAST CHINA SEA TALKS

REF: A. TOKYO 3819

B. TOKYO 5023

Classified By: Amb. J. Thomas Schieffer. Reasons: 1.4 (b/d)


1. (C) Summary. Achieving a resolution to the dispute
between China and Japan over East China Sea gas fields before
Prime Minister Fukuda's expected visit to China sometime in
the near future, as called for by the two countries' foreign
ministers on December 1, could force the Prime Minister to
confront openly the wing of his own ruling party that is
pressing for a tougher, more nationalist China policy. Former
PM Abe and his supporters have orchestrated recent newspaper
articles criticizing the Fukuda government's apparent
willingness to negotiate with China to resolve the East China
Sea dispute, according to a Ministry of Economic, Trade and
Industry (METI) official. The METI official indicated
working-level negotiations have been positive over the past
several months. However, higher level talks remain at an
impasse, presumably due to political pressures in Tokyo to
maintain a hard line with the Chinese. End Summary.


2. (C) Former Prime Minister Shinzo Abe and fellow Liberal
Democratic Party (LDP) nationalist and former METI Minister
Shoichi Nakagawa are likely behind recent newspaper articles
criticizing the Fukuda government's apparent willingness to
negotiate with China to resolve the East China Sea dispute,
said METI Petroleum and Natural Gas Division Director Shin
Hosaka. Representing a conservative, "national pride"
faction within the LDP, Abe and Nakagawa oppose what they
view as Fukuda's "pro-China" stance and are using the media
to sway public opinion, he speculated.


3. (C) Hosaka stated, under the Koizumi administration,
Nakagawa, in his position as METI Minister, granted drilling
rights in Japan's claimed territory of the East China Sea to
Teikoku Oil Corporation. Teikoku is a wholly-owned
subsidiary of INPEX Corporation in which the government
maintains a 30% stake. Former Prime Minister Abe during his
tenure announced if the Chinese refused to agree to Japan's
proposal of establishing a median line to divide the disputed
territory, Teikoku would commence exploration on Japan's side
of the line in fall 2007. The Fukuda government, however,
has backed off this position for fear of angering the
Chinese, Hosaka observed.


4. (U) Hosaka cited a November 21 article in the conservative
Sankei Shinbun newspaper and a November 1 article in the
weekly Shincho magazine contrasting the Abe and Fukuda
negotiating strategies in tones critical of PM Fukuda's more
"dovish" stance as examples of the attacks on the Prime
Minister appearing in the Japanese media. The Sankei story,
which Hosaka stated was directly attributable to Nakagawa,
went so far as to claim China had several times threatened to
send naval warships to stop any Japanese oil exploration in
the disputed territory. Both the Sankei and Shincho articles
suggested Fukuda's "conciliatory" position will prolong the
East China Sea dispute and will bolster China's negotiating
position.


5. (C) Nevertheless, Hosaka continued, working-level
negotiations on the East China Sea matter have been fairly
constructive over the past several months. "We have opened
our hearts to each other," he said. At higher levels,
however, the issues are more politicized and the two sides
are at an impasse. Hosaka quipped that when MOFA Asia Bureau
Director General Kenichiro Sasae meets with his counterpart,
Chinese Foreign Ministry Asian Affairs Director General Hu
Zhengyue, "there are many shoes pounding on desks." Hosaka
believes the dispute can only be resolved at the highest
level but doubts PM Fukuda has the political capital at this
time to negotiate an acceptable compromise.


6. (C) Japanese media reported Foreign Minister Koumura and

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Chinese Foreign Minister, Yang Jiechi, again failed to make
any significant breakthrough on the East China Sea issue
during their December 1 meeting in Beijing. However, both
Ministers confirmed the "political will" to resolve the
matter before PM Fukuda visits China, likely by year end.
Commenting on these reports on December 3, METI Petroleum and
Natural Gas Division Director Kenichiro Nagai stated, while
nothing concrete came out of the Beijing ministerial,
working-level bureaucrats are encouraged by the relatively
positive language used by both sides. The working-level will
meet several times over the next few weeks to negotiate a
settlement, he said.


7. (SBU) Comment. In past meetings, Hosaka has called the
East China Sea negotiations a "waste of time." This is the
first time he has had anything positive to say about the
working-level talks. However, with Fukuda seemingly trapped
between LDP elements pressing for a hard line against the PRC
and his desire to work cooperatively with the Chinese, any
effort to achieve near-term resolution to the East China Sea
may force the Prime Minister into an open confrontation with
the conservative, "national pride" wing of the LDP who formed
a key base of support for his two immediate predecessors.
End Comment.

SCHIEFFER