DAILY SUMMARY OF JAPANESE PRESS 08/08/08

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E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 08/08/08 INDEX: (1) Nagasaki Prefecture to propose rejecting port calls by nuclear sub at Sasebo (Mainichi) (2) Economic slowdown (Part 1): 18 trillion yen estimated to flow out of Japan due to soaring resource prices (Yomiuri) (3) Government's study group opposes restrictions on foreign investment in airports (Asahi) (4) Interview with Foreign Minister Masahiko Koumura: Refueling activities need to be continued (Yomiuri) (5) Japan fed up with being betrayed by America's diplomacy (Sankei) (6) Cabinet support rating varies with media outlets (Mainichi) (7) TOP HEADLINES (8) EDITORIALS (9) Prime Minister's schedule, August 8, 2008 (Nikkei) ARTICLES: (1) Nagasaki Prefecture to propose rejecting port calls by nuclear sub at Sasebo MAINICHI (Internet edition) (Full) August 8, 2008 In connection with the issue of the nuclear-powered submarine Houston having leaked radiation, Nagasaki Prefecture today to reject further port calls by that vessel at Sasebo Port (Sasebo City in the prefecture) until the cause of the leakage is cleared up and steps to prevent a recurrence are made clear. The prefecture then informed the Foreign Ministry by phone. According to a prefectural assembly member from the Japanese Communist Party, the prefecture's disaster and crisis manager, Hiroshi Furukawa, called at the prefectural office building this morning to discuss this issue. Although the right to reject port calls by U.S. vessels is not held by local governments, based on the Japan-U.S. Status of Forces Agreement, Crisis Manager Furukawa pointed out, "The current situation has cause great anxiety among the prefectural residents, so consideration should be given." The prefecture then decided to express its intention to reject port calls (by the submarine). Governor Genjiro Kaneko on August 5 asked Chief Cabinet Secretary Machimura for such responses as measures to stop reoccurrences. (2) Economic slowdown (Part 1): 18 trillion yen estimated to flow out of Japan due to soaring resource prices YOMIURI (Page 1) (Full) August 8, 2008 Isamu Jinguji, the head of the finance processing division of Japan Airlines Corp., said in a press conference yesterday: "We will have to raise fuel surcharges to absorb skyrocketing costs due to the TOKYO 00002185 002 OF 009 recent steep rise in oil prices." The company estimates its jet fuel costs for FY2008 at 532 billion yen, 119.3 billion yen more than that in the previous year. All Nippon Airways Co. also expects its fuel bill for the same fiscal year to reach 307 billion yen, an increase of 41 billion yen over the previous year. Resource-poor Japan has to buy not only oil but even iron ore, coal and other resources from overseas. If their prices rise; more money will flow out of Japan. The Japan Research Institute estimates approximately 18 trillion yen in assets flowed outside the country in FY2008. This figure accounts for about 3.5 PERCENT of the nation's gross domestic product (GDP). The funds that should have been used for renewing companies' production facilities or have gone into household accounts have decreased. The outflow of assets is exactly the main cause for the current economic contraction in Japan. During negotiations on coal prices, an executive of a major foreign resource company suddenly showed pictures to an executive of a certain leading Japanese steel company, saying: "See, coal mines in Australia were flooded by torrential rains." The negotiations were carried out at the pace of the seller, who emphasized that business was declining. When a contract was concluded in April, the Japanese company had to accept purchase prices about three times higher than those in the previous year. The foreign resource company executive also said: "If raw material prices jump, why don't you raise steel prices?" The Japanese executive grumbled: "If we could do that, we would not be in such trouble." The prices of coal and ironstone have soared about triple and up to twice, respectively, but the prices of steel materials set when they are delivered to automakers have been about only 40 PERCENT higher. Toyota Motor Corp and Nissan Motor Co. see that they can raise showroom prices by 1 PERCENT to 3 PERCENT , at most. It is an imminent task for companies suffering from skyrocketing raw material prices to pass along the steep rise in costs on the prices of products. But consumers' awareness of protecting their livelihood is becoming stronger. Companies close to the frontline of consumers find it difficult to raise prices, so they eventually see their profits shrink. Small businesses have been placed in a more serious situation. A forwarding agent in western Japan said: "I succeeded in persuading a cargo owner to agree to a 3 PERCENT rise in freight charges, but the owner suddenly canceled our contract." A fishing gear manufacturer in Ishikawa Prefecture said: "Many of fishing nets are petroleum-based products. Our customers are fishermen, who are suffering from the steep rise in fuel prices, so we cannot increase prices." Major six leading banks earmarked a total of 234.4 billion yen in funds to dispose of bad loans during the April-June period this year, including added bad debt reserves. This figure is about three TOKYO 00002185 003 OF 009 times larger than the 78.3 billion yen in the same period a year ago. The Financial Services Agency is keeping a closer watch on banks' moves, based on the view that banks are becoming more reluctant to lend money, though their tight lending attitude had been eased due to economic recovery for a while." The environment surrounding companies is rapidly deteriorating. (3) Government's study group opposes restrictions on foreign investment in airports ASAHI (Page 5) (Full) August 8, 2008 The government's study group to consider restricting investment in airports on August 7 held its first meeting at the Kantei. A representative from the Ministry of Land, Infrastructure and Transport (MLIT) gave an explanation on the need to restrict foreign investment from the perspective of security. A number of experts on the panel offered negative views. The panel is charged with reaching a decision on whether or not to restrict foreign investment in airports. The panel will look into in concrete terms the role of airports and airport facility-related companies in security terms and what is missing in regulations set under current law. It intends to consider, as well as foreign investment restrictions, a wide range of issues, including capital restrictions covering domestic capital as well, a behavior regulation designed to designate in advance what must not be done, and the government ownership of a designated number of stocks for a long period of time. The representative of MLIT reported on various capital regulations in force in industry sectors other than domestic airports and cases of foreign airports. This official also reported on cases of airports being acquired by foreign funds in countries like Britain, Italy and Belgium, where there are no foreign capital restrictions. This official then indicated his ministry's stance that it is common for foreign countries that have liberalized investment to allow public involvement and impose foreign investment restrictions regarding key infrastructures. Though panel members took the stance that it would be necessary to regulate airport operators, who usually monopolistically run an airport, in some way or other, they took a negative stand to a proposal for restricting foreign investment with one saying, "To begin with, the reason that foreign companies cannot invest in airports just because they are foreign companies is not valid." Another member noted: "Shutting out foreign company will not settle any security issues." There was also a view there that there should a means to allowing local airports, which are in financial difficulties, to introduce foreign capital. MLIT was supposed to submit to the regular Diet session this year a bill amending the Airport Consolidation Law (currently called the Airport Law),which includes the introduction of a regulation restricting the foreign ownership of stocks to less than one-third in terms of voting securities to Narita International Airport Corporation, which plans to join the market, and a company that operates Haneda Airport facilities. TOKYO 00002185 004 OF 009 However, the ministry deleted the segment concerning foreign investment restrictions from the bill, meeting criticism from the LDP. It has decided to continue intragovernmental discussions. Regarding Haneda Airport, the purchase of about 20 PERCENT of stocks of a passenger facilities company (Japan Airport Terminal Col) by an Australian company has boosted a call for introducing foreign investment restrictions. (4) Interview with Foreign Minister Masahiko Koumura: Refueling activities need to be continued YOMIURI (Page 2) (Full) August 8, 2008 -- Japan and North Korea will hold working-level talks from Aug. 11. How will Japan deal with North Korea? Foreign Minister Koumura: We want North Korea to come up with a specific method for discovering survivors (abducted to North Korea) and then to repatriate them. -- Is it possible to hope for specific progress on the abductions and other issues? Koumura: If we think the possibility is zero, we would not be holding talks with them. But we cannot be optimistic about them, either. -- Will Japan participate in energy aid to North Korea? Koumura: If we're ready, we will do so. That means we are seeing progress on the abduction issue. The other countries participating in the six-party talks understand it. It all depends on North Korea. -- Did you work on the U.S. government over the issue of delisting North Korea as a state sponsor of terrorism? Koumura: I told U.S. Secretary of State Rice that North Korea is doing nothing (on the abduction issue) -- How about the issue of continuing the Maritime Self-Defense Force's refueling activities in the Indian Ocean? Koumura: The government has yet to make a formal decision on that matter. But I myself want the MSDF's refueling mission continued. Many countries have sent troops to Afghanistan for the war on terror. However, Japan cannot send the Self-Defense Forces there. The largest amount of crude oil that Japan imports comes through the Indian Ocean. It is not too much to say that Japan is the largest beneficiary. Can we ask other countries to do troublesome things for us, and expect to only receive the benefits? Such a situation just will not do. We must continue the mission there not only from the aspect of Japan's contributions to the international community but also from the aspect of Japan's national interests. -- The Chinese government admitted that China also had victims suffering food poisoning from frozen 'gyoza' dumplings made in China. Koumura: In early July, China told Japan that there was food TOKYO 00002185 005 OF 009 poisoning from frozen gyoza dumplings that contained methamidophos. They said they were still investigating the incident. They also said if they found out something, they would let us know, so they did not want us to make it public for the time being. They asked us not to make it public, so we didn't make it public. Non-disclosure is a general principle in the world of intelligence. -- Do you think China will change its attitude on this issue? Koumura: Yes. They reported it. I appreciate this fact. I hope they will further investigate the incident and let us know anything they find out about the cases. (5) Japan fed up with being betrayed by America's diplomacy SANKEI (Page 6) (Abridged slightly) August 6, 2008 By Hiroshi Yuasa, Sankei Shimbun Tokyo special correspondent Ambrose Bierce's Devil's Dictionary defines politics as "a strife of interests masquerading as a contest of principles." At the same time, principles and views can shift for political gain. European history is filled with tales of alliances and ruptures. Countries were reportedly constantly in fear of being betrayed by their allies. Japan has experience betrayals by its ally through two recent events: the United States' decision to delist North Korea as a state sponsor of terrorism and its changing of the geographical listing of Takeshima. The U.S. Board on Geographic Names (BGN) recently changed its listing of Takeshima, which is Japan's inherent territory, from "South Korean" to "undesignated sovereignty," but then quickly reversed its decision in response to mounting criticism in South Korea. In anticipation of fierce protest demonstrations, the United States must have made the decision not to irritate South Korea ahead of President George W. Bush's trip to that country on August 6. The United States' decision was clearly wrong in view of its own diplomatic documents. During the drafting of the text of the San Francisco Peace Treaty, the United States listed Takeshima as "Japanese territory." Acting Political Advisor in Japan William J. Sebald's telegram (dated November 14, 1947) to the Secretary of State also stated: "Japan's claim to these islands is old and appears valid." A letter (dated August 10, 1951) from United States Assistant Secretary Dean Rusk to the South Korean ambassador also read: "This normally uninhabited rock formation was never treated as part of Korea, and since about 1905, has been under the jurisdiction of the Oki Islands Branch Office of Shimane Prefecture of Japan." The Bush administration made the decision on Takeshima under the rule of The Devil's Dictionary in defiance of the past documents. This can be called a betrayal or cunning. In view of Japanese feelings, it is an act of disloyalty. A recent Sankei-FNN opinion poll clearly showed that the Japanese public is fed up with being betrayed by the U.S. TOKYO 00002185 006 OF 009 In the poll, 32.3 PERCENT responded positively to an extension of the new Antiterrorism Special Measures Law to logistically support U.S. military operations, while 53 PERCENT responded negatively. In last November's poll, the rate of approval was higher than the disapproval rate five to four. This year's poll also posed questions about assistance for the United States. Japan has assisted U.S. forces in Iraq and Afghanistan, thinking its military strength is the only way to prevent North Korea from carrying out provocative acts. It was also a senior U.S. official that declared, "Abduction is an act of terrorism." The United States tends to adopt a reconciliatory policy toward an adversary once it succeeds in carrying out a nuclear test. In fact, The U.S. immediately shifted its stance toward France, Israel, India, and Pakistan once they had completed their nuclear tests. Kyoto University Professor Terumasa Nakanishi refers to such a trend common in the Anglo-Saxon world as pragmatic thinking to join hands with unbeatable rivals. The Wall Street Journal, describing the delisting of North Korea as betrayal of Japan, has warned that it would harm the U.S.-Japan alliance. It is good to know that U.S. views are split on how to handle North Korea. If its alliance with the United States is indispensable in dealing with China, Tokyo has no other option but to win Washington over to its side by pulling the Bierce-style diplomatic stunt of telling a patriotic lie. (6) Cabinet support rating varies with media outlets MAINICHI (Page 3) (Full) August 6, 2008 Q: The news media conducted opinion polls in the wake of Prime Minister Yasuo Fukuda's recent shuffle of his cabinet. The rate of public support for the new Fukuda cabinet varied considerably depending on the media outlets, didn't it? A: It did. In the Mainichi Shimbun's poll, the new Fukuda cabinet's support rate was 25 PERCENT , up 3 percentage points from the last survey taken in July. In the Asahi Shimbun's poll, it was 24 PERCENT , which is the same as in the last survey. Meanwhile, the Yomiuri Shimbun and the Nihon Keizai Shimbun also conducted their respective public opinion surveys almost at the same time. However, the two dailies came up with comparatively high figures for the new Fukuda cabinet, with the Yomiuri Shimbun posting 41.3 PERCENT and the Nihon Keizai Shimbun scoring 38 PERCENT . In both dailies, the new Fukuda cabinet's public approval rating rose more than 10 points from their last surveys. So the various dailies were divided in their evaluation of the cabinet shuffle. Some dailies said the results were good, while other dailies said they were not. Q: Do you mean the results of some polls do not accurately reflect public opinion? A: Umm... Indeed, there's a support rate gap of nearly 18 points between the highest figure, which came from the Asahi, and the lowest figure, which is from the Yomiuri. But then, I'd like you to take a look at the disapproval ratings? Their gap is within a range TOKYO 00002185 007 OF 009 of 8 points. In their findings, the Fukuda cabinet's disapproval ratings are almost the same at around 50 PERCENT . So we cannot definitely say certain data were inaccurate. Q: If that is the case, I wonder why only the support ratings differ. A: That is, I think, primarily because of the different ways of asking the question. Not all of the sampled persons decide beforehand on whether they support the cabinet or not. There are also some people who answer that they "don't know." These people may be classified in the category of those who gave "no answer." Some dailies may further ask, "If you had to choose, which would be your answer 'yes' or 'no'?" In this way, depending on how to ask, we will see different results. There are also some people who answer that they are "not interested" or who give "other answers." Their proportion is about 20 PERCENT in the polls taken by the dailies that came up with low support rates. Meanwhile, this proportion is only about 10 PERCENT in the case of the dailies that posted high support. Q: What does that mean? A: There are people whose answer is unclear when they are asked whether they support the cabinet or not. These people are asked again to "dare" to choose between "yes" and "no." As a result, some of them may reluctantly answer "yes." Their proportion could be added up to the cabinet's support rate. This is conceivably included in the data of high support for the cabinet. When asking the question, pollsters from some dailies referred to Prime Minister Fukuda shuffle of his cabinet. So respondents may have had a fresh image and better impression of the new Fukuda cabinet. Masao Matsumoto, a professor of political science at Saitama Prefecture, says: "The Fukuda cabinet's image is unclear, so their different polling methodologies can be easily reflected in the results of their polls." (7) TOP HEADLINES Asahi, Yomiuri: Japanese economy may enter contraction Mainichi & Tokyo Shimbun: Number of pupils refusing to attend classes increases 2nd straight year Nikkei: TEPCO to set up recharging sites in 200 locations next fiscal year for electric cars Sankei: Opening of Beijing Olympics today, with China's overreaction to reputations Akahata: Sub leaked radiation for two years in 11 port calls in Japan (8) EDITORIALS Asahi: (1) Opening of Beijing Olympics TOKYO 00002185 008 OF 009 Mainichi: (1) Prime Minister Fukuda must urge China to clear up truth of tainted dumpling cases (2) Government must hold on to principles on fiscal reconstruction Yomiuri: (1) Opening of Olympics: China is drawing world attention Nikkei: (1) Economic recession shows limits to dependence on exports (2) Human rights problem still left in growing Asia Sankei: (1) Fukuda must tackle dumpling poisoning cases from viewpoint of Japanese consumers (2) Stop doling out subsidies and promote structural reform to perk up economy Tokyo Shimbun: (1) Uncovering details of tainted Chinese dumpling cases the best way to restore confidence (2) Monetary policy holds key in dealing with economic recession Akahata: (1) Give priority to livelihood in economic policy (9) Prime Minister's schedule, August 8, 2008 NIKKEI (Page 2) (Full) 10:41 Met with Special Advisor Ito at the Kantei. 11:12 Met with Japan Business Federation (Nippon Keidanren) Chairman Mitarai. 12:44 Met with Chief Cabinet Secretary Machimura. 13:00 Administrative Expenditures Overall Check-up meeting 15:32 Met with a group of elementary and middle school "reporters" from Okinawa and Hakodate. Then, met with incumbent Chairman Miyata and incoming Chairman Mogi of the Central Union of Agricultural Cooperatives (Zenchu). 16:03 Met with Finance Minister Ibuki. Then meeting of monthly economic report-related-ministers. 17:11 Met with Cabinet Intelligence Director Mitani. 18:16 Met with Machimura and Deputy Chief Cabinet Secretary Futahashi. Futahashi remained. Then roundtable to discuss the way welfare and labor administration. 18:44 Arrived at the official residence. TOKYO 00002185 009 OF 009 SCHIEFFER