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 TOKYO 00005457 002 OF 002 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