DAILY SUMMARY OF JAPANESE PRESS 08/11/08

UNCLAS SECTION 01 OF 11 TOKYO 002201

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 08/11/08

INDEX:

(1) Japan-China joint poll (Yomiuri)

(2) Overseas advance of non-manufacturing companies accelerating:
External direct investment increases 35 PERCENT in fiscal 2007;
Retailing, transportation companies finding way out of stagnant
domestic demand (Nikkei)

(3) Impact of removing DPRK from list of states sponsoring
terrorism: Shizuoka Prefectural University Professor Hajime Izumi
says U.S. concern about abduction issue has not changed (Yomiuri)

(4) Interview with Defense Minister Yoshimasa Hayashi: Reform needed
to recover public trust (Mainichi)

(5) Editorial: Georgian conflict: Use of force can never solve
anything (Asahi)

(6) TOP HEADLINE

(7) EDITORIALS

(8) Prime Minister's schedule, Aug. 8 (Nikkei)

ARTICLES:

(1) Japan-China joint poll

YOMIURI (Page 13) (Full)
August 4, 2008

Questions & Answers
(Figures shown in percentage)

Q: Do you think Japan-China relations are now in good or bad shape?

Japan China
Very good 2.7 6.9
Good to a certain degree 33.0 59.6
Bad to a certain degree 46.9 26.2
Very bad 10.3 3.2
No answer (N/A) 7.0 4.1

Q: Do you think China (Japan) is trustworthy?

Japan China
Very trustworthy 1.1 8.0
Somewhat trustworthy 18.0 48.4
Not very trustworthy 48.0 35.5
Not trustworthy at all 29.9 6.9
N/A 3.0 1.2

Q: In May this year, Chinese President Hu Jintao visited Japan and
met with Prime Minister Fukuda. Do you appreciate this?

Japan China
Appreciate very much 21.0 14.8
Appreciate somewhat 47.8 67.4
Don't appreciate very much 21.1 9.3
Don't appreciate at all 5.6 1.3
N/A 4.5 7.2

TOKYO 00002201 002 OF 011



Q: China was hit by a devastating earthquake in its southwestern
province of Sichuan, and Japan sent an emergency rescue team and a
medical team to disaster-stricken areas. Do you appreciate this?

Japan China
Appreciate very much 67.7 33.2
Appreciate somewhat 26.3 58.3
Don't appreciate very much 4.0 6.4
Don't appreciate at all 1.3 1.2
N/A 0.8 1.0

Q: In what area do you think Japan and China should cooperate from
now on? Pick as many as you like from among those listed below, if
any.

Japan China
Politics, diplomacy 50.3 47.9
Economy 44.8 56.1
Security 37.0 25.8
Natural resources, energy development 44.7 37.6
Science & technology 10.1 54.5
Environmental issues 57.6 23.7
Epidemic prevention, including new-type flu viruses 21.6 8.1
Education, culture 17.2 19.2
Other answers (O/A) 0.5 ---
Nothing in particular (NIP) + N/A 5.6 2.2

Q: Do you think Japan-China relations will improve, deteriorate, or
remain unchanged?

Japan China
Improve very much 5.1 14.6
Improve to a certain degree 32.4 60.0
Remain unchanged 51.2 21.1
Deteriorate to a certain degree 6.8 2.5
Deteriorate very much 1.0 0.2
N/A 3.4 1.7

Q: Do you think Japan has been a pacifist nation over the postwar
six decades?

Japan China
Yes 54.5 23.0
Yes to a certain degree 35.7 45.9
No to a certain degree 5.7 15.0
No 2.4 11.7
N/A 1.8 4.4

Q: Do you think the plus impact of China's economic growth on
Japan's economy will be bigger, or do you otherwise think its
negative impact will be bigger?

Japan China
Plus impact 23.3 55.2
Negative impact 38.1 16.7
About the same 32.4 20.8
N/A 6.1 7.2

Q: Which country or area do you think will play a role as Asia's
leader? Pick up to two from among those listed below.


TOKYO 00002201 003 OF 011


Japan China
Japan 71.1 50.1
China 59.7 82.8
South Korea 12.4 21.4
Taiwan 1.2 9.7
India 21.9 10.3
Thailand 0.9 3.7
Malaysia 1.1 1.5
Indonesia 1.4 1.0
Other ASEAN member countries 1.4 1.9
O/A+NIP+N/A 6.0 1.8

Q: What's your impression of China? Pick as many as you like from
among those listed below, if any.

Japan China
It's economically rich 10.6 37.7
Its technology level is high 11.7 29.7
It's a growing military power 57.4 44.9
It's promoting tradition, culture 21.7 72.9
It's protecting the natural environment 2.8 42.6
It's a safe place 2.6 29.4
O/A 5.2 0.0
NIP 19.9 0.3
N/A 2.5 0.6

Q: What's your impression of Japan? Pick as many as you like from
among those listed below, if any.

Japan China
It's economically rich 42.1 72.2
Its technology level is high 71.2 74.7
It's a growing military power 3.1 25.2
It's promoting tradition, culture 21.3 30.3
It's protecting the natural environment 20.7 23.7
It's a safe place 42.7 8.7
O/A 1.1 0.1
NIP 5.1 2.1
N/A 0.7 0.6

Q: What's your impression of the Chinese people? Pick as many as you
like from among those listed below, if any.

Japan China
Diligent 16.0 78.3
Big-hearted 5.9 61.3
Kind 3.9 52.5
Social 4.4 20.7
Patriot 64.7 61.9
Creative 8.7 27.6
Clear-cut 48.6 15.1
Rational 10.5 6.9
O/A 2.0 ---
NIP+N/A 13.3 0.6

Q: What's your impression of the Japanese people? Pick as many as
you like from among those listed below, if any.

Japan China
Diligent 63.1 55.4
Big-hearted 18.9 15.3
Kind 41.5 19.9

TOKYO 00002201 004 OF 011


Social 9.6 20.7
Patriot 7.9 38.8
Creative 10.9 53.2
Clear-cut 4.1 18.6
Rational 17.7 6.4
O/A 1.5 0.2
NIP+N/A 8.3 3.8

Q: The Olympic Games will be held in Beijing, China, from Aug. 8.
Are you interested in the Beijing Olympics?

Japan China
Very interested 35.6 64.3
Somewhat interested 37.0 32.3
Not very interested 20.2 2.4
Not interested at all 7.0 0.8
N/A 0.2 0.2

Q: Japan and many other advanced countries have set specific
numerical benchmarks to reduce their emissions of carbon dioxide and
other greenhouse effect gases. Do you think China should also set
its own?

Japan China
Yes 78.4 65.4
Yes to a certain degree 17.3 29.8
No to a certain degree 1.3 2.0
No 0.9 0.3
N/A 2.0 2.5

Q: (Asked in Japan) In China, young people, who were born in or
after 1980 and who are called the "one-child generation," are said
to be self-centered as compared with those older than them. Do you
think the same is true of Japanese young people in their 20s?

Japan China
Yes 43.2 ---
Yes to a certain degree 30.9 ---
No to a certain degree 12.4 ---
No 9.8 ---
N/A 3.7 ---

Q: (Asked in China) Do you think young people, who were born in or
after 1980, are self-centered as compared with those older than
them?

Japan China
Yes 59.1
Yes to a certain degree 32.1
No to a certain degree 4.6
No 2.3
N/A 1.9

Polling methodology

Japan
Date of survey: July 12-13.
Subjects of survey: 3,000 persons chosen from among all eligible
voters throughout the country (at 250 locations on a stratified
two-stage random sampling basis).
Method of implementation: Door-to-door visits for face-to-face
interviews.

TOKYO 00002201 005 OF 011


Number of valid respondents: 1,828 persons (men-48 PERCENT ,
women-52 PERCENT ).

China
Date of survey: July 11-16.
Subjects of survey: Outlook Weekly outsourced the survey to Horizon
Research. Men and women, aged 20 and over, were chosen in Beijing,
Shanghai, Guangzhou, Wuhan, Chengdu, Xian, Dalian, Hefei, Harbin,
and Kunming.
Method of implementation: Door-to-door visits for face-to-face
interviews
Number of valid respondents: 1,286 persons (men-49 PERCENT ,
women-51 PERCENT ).

(2) Overseas advance of non-manufacturing companies accelerating:
External direct investment increases 35 PERCENT in fiscal 2007;
Retailing, transportation companies finding way out of stagnant
domestic demand

NIKKEI (Page 3) (Full)
August 11, 2008

Foreign investment by non-manufacturing companies from the
retailing, transportation and communications industries is
accelerating. External direct investment by those companies in
fiscal 2007 jumped to approximately 4.3 trillion yen, up 35 PERCENT
compared with the preceding year. The investment balance as of
fiscal 2007 increased to approximately 28 trillion yen. Retailers
have expanded operating bases in Asia because of stagnant sales on
the domestic market. Investment in the development of resources,
such as natural gas, also increased. However, since emerging
countries strictly regulate foreign investment by services
industries and the like, efforts to liberalize investment through
trade talks are indispensable in order to turn investment in foreign
countries into profits.

According to the balance of payments statistics issued by the
Finance Ministry and the Bank of Japan, external direct investment
by nonmanufacturing companies reached 4.3396 trillion yen in fiscal

2007. Direct investment means business-purpose investment, such as
investment in foreign subsidies and the purchases of foreign
companies. The amount invested in such sectors as real estate by
nonmanufacturing companies topped 6 trillion yen a year during the
bubble era. However, the amount dropped below 2 trillion yen in
fiscal 2005. A major feature of the accelerating foreign investment
is that with the domestic market hitting the ceiling due to the
declining birthrate and the aging society, domestic demand-oriented
industries are advancing into emerging countries in search of new
opportunities there.

Development of resources on the rise

By industry sector, overseas investment by the retailing and
wholesaling industry, which dropped to the 200 billion yen level in
fiscal 2004, picked up to approximately 560 billion yen in fiscal

2007. Aeon is continuing to open stores in Asia, such as China,
Malaysia and Thailand, after fiscal 2008 as well. Its plan is to
boost overseas investment for the next three years to 140-160
billion yen, about four times the level recorded in the past three
years.

The transportation industry is expanding the network of the

TOKYO 00002201 006 OF 011


distribution of goods targeting Japanese companies. Its external
direct investment reached approximately 330 billion yen in fiscal
2007, double the amount marked in the previous year. The industry is
visibly increasing operating bases in Asia, as can be seen the
purchase of an Indian company by Nippon Express. Overseas advance of
service businesses in general is also becoming robust, as seen in
the case of QB House, a low-priced barber chain.

Investment in the development of resources against the backdrop of
the steep rise in resources prices is also growing rapidly.
Investment in the mining industry in fiscal 2007 rose to
approximately 480 billion yen, up 76 PERCENT from the previous
year. The development of gas fields and oil fields in such countries
as Australia and Indonesia by Japanese companies, such as Inpex
Corporation, also accelerated. The investment balance at the end of
fiscal 2007 jumped to 2.1104 billion yen, 1.5 times the level of the
end of the preceding year.

Increase of 76 PERCENT in investment in Asia

Looking at the investment balance according to area of the
destination of investment, North America accounts for the largest
portion of 35 PERCENT of the whole, followed by the EU with 23
PERCENT and Asia with 16 PERCENT . However, when it comers to the
track record in fiscal 2007, the amount invested in Asia stood at
836.4 billion yen, up 76 PERCENT from the preceding year, topping
investment made in North America (803.2 billion yen),where the
economy is slowing. The investment balance with China, into which
retailing and wholesaling companies are successively making inroads,
reached approximately 220 billion yen, up 37 PERCENT from the
preceding year. Investment in the Philippines by communications
companies also grew.

The scale of Japanese nonmanufacturing companies' overseas business
is still smaller than that of European and U.S. companies. Of the
external investment balance, the proportion held by nonmanufacturing
companies is 45 PERCENT in Japan, while such a proportion in the
U.S. and main European countries is 70 PERCENT -80 PERCENT .
Concerning emerging countries in Asia, on which Japan is focusing
emphasis, some countries have foreign investment restrictions,
including restricting the number of operation bases established by
service businesses, hampering Japanese companies from improving
profits.

The World Trade Organization (WTO) is aiming to liberalize the
service sector, by abolishing foreign investment restrictions in
such areas as communications, construction and retailing as well as
the agriculture and industrial fields. The Ministry of Economy,
Trade and Industry calculates that an agreement at WTO talks would
promote the consolidation of the investment and business environment
for nonmanufacturing countries, producing an economic effect of
about 20 trillion yen throughout the world. It intends to seek an
early resumption of the talks.

The business downturn and the steep rise in raw material prices are
casting a pall over corporate profits. As such, there are some
unclear aspects about whether external direct investment will
continue to increase this fiscal year and thereafter as well.

(3) Impact of removing DPRK from list of states sponsoring
terrorism: Shizuoka Prefectural University Professor Hajime Izumi
says U.S. concern about abduction issue has not changed

TOKYO 00002201 007 OF 011



YOMIURI (Page 4) (Excerpts)
August 10, 2008


Q. It looks like the U.S. is heading in the direction of removing
North Korea from the list of countries sponsoring terrorism.


A. North Korea was designated in 1988 as a terrorist-supporting
state due to its involvement in the bombing of a KAL airliner in
Nov. 1987. When it was so designated, such sanctions were imposed as
a ban on exports of weapons and on economic assistance. Afterward,
other elements keeping it on the list were the protection of the
hijackers of the JAL airliner Yodo and Japan's abduction issue.

Removing the DPRK from the terror list is the decision of the U.S.
President. The report to Congress includes: 1) assurances that the
country so designated did not provide assistance to terrorists for
the past six months, and 2) no fear of assistance being provided in
the future. The delisting becomes possible if the Congress raises no
objections by resolution within 45 days. President Bush on June 26
presented the Congress with a report on North Korea. It will be
possible to delist North Korea after Aug. 11.

The U.S. government has used delisting as a card in its negotiations
with North Korea on making it give up its nuclear development
programs. The current move to delist is because there has been a
certain amount of progress on this issue.


Q. What impact would delisting have?


A. For North Korea, it would be meaningful since the U.S. would
change its policy of viewing it as an adversary. But the real impact
would be small, I think.

The U.S. government would continue its sanctions measures based on
the revised provisions of the Weapons Export Control Act. Although
expenditures can be used for denuclearization, the U.S. can provide
neither economic assistance nor financing. It is also against the
IMF and World Bank providing financing to North Korea. So delisting
North Korea does not mean that it would be immediately receiving
economic benefits.

The U.S. is the only country that clearly tells North Korea what
Japan's position is on the abduction issue. Concern has emerged in
Japan that if the U.S. decides to delist North Korea, Japan would
lose is effective card for resolving the abduction issue. However,
since the U.S. government treats the abductions as a human rights
issue, which is connected to that country's foreign policy
principles, it would not lose interest in that issue. It will not
become something that will cause harm to the Japan-U.S. alliance.

(4) Interview with Defense Minister Yoshimasa Hayashi: Reform needed
to recover public trust

MAINICHI (Page 5) (Full)
August 9, 2008

-- What is your Diet strategy to continue the Maritime Self-Defense
Force's refueling activities in the Indian Ocean?

Defense Minister Hayashi: The government has yet to make a decision.
But the September 11 anniversary (of the terrorist attacks on the

TOKYO 00002201 008 OF 011


U.S.) will come soon. More than 40 countries made sacrifices on the
war on terror (in Afghanistan),so I think there is a consensus that
we should do something.

-- New Komeito, the ruling Liberal Democratic Party's coalition
partner, is reluctant to take a second vote in the House of
Representatives on this issue.

Hayashi: This is the same as shogi or chess, and no one would
declare strategy from the beginning. We must explain the
significance of the war on terror.

-- There is an idea being floated from within the LDP to task the
MSDF with escorting Japanese oil tankers.

Hayashi: Generally speaking, we have to think about what kind of
legislation we will need to do so, and we have also to think about
what we should do. I wonder if we can do it easily.

-- On the issue of relocating the U.S. military's Futenma airfield
in Okinawa, local governments are calling for the planned relocation
site of its alternative facility to be moved offshore.

Hayashi: The Japan-U.S. agreement is balanced. It's difficult to
change it without rational reason. We will have to find common
ground. Working groups are making efforts to create a good idea. I'd
like to visit Okinawa at the earliest possible time.

-- A government advisory panel has presented a report of
recommendations to reform the Defense Ministry. What's the future
course?

Hayashi: Prime Minister Yasuo Fukuda told me to raise the SDF's
morale. It's very important to carry out reform to recover public
trust. We will work out an implementing plan this month, and we will
have a roadmap. In the LDP, I have a long experience to reform the
public servant system. This involves all government bureaucrats.
There are government offices that are in charge of planning. In the
meantime, the Defense Ministry, which is in charge of exercising
force, will have to reform its organization in a different way.

(5) Editorial: Georgian conflict: Use of force can never solve
anything

ASAHI (Page 3) (Full)
August 10, 2008

Fierce fighting has begun in Georgia, a newly emerging state on the
coast of the Black Sea that became independent with the collapse of
the former Soviet Union. Clashes are occurring between the Georgian
and neighboring Russian troops, and there are reports of many lives
being sacrificed from the shelling and air strikes.

The conflict is occurring in an area centered on South Ossetia,
which faces the border between Georgia and Russia. It is a place
where many Ossetians, a minority group, live. They are seeking to
separate and join the North Ossetia Republic on the Russian side of
the border, and armed conflict between them and the Georgian
government has continued ever since the country became independent.


Russian troops were deployed as a peace-keeping force, and although

TOKYO 00002201 009 OF 011


large-scale combat has abated, the region exists as if it were a de
facto small independent state within the country of Georgia.

It is not clear exactly what set off the current clashes. The
picture that emerged was one of Georgian government sending in
forces, aiming at subduing the autonomous state, with Russia then
coming in to counterattack, expanding the conflict.

Although the United Nations convened an emergency Security Council
session, nothing could be accomplished since Russia confronted the
United States and other members on the issue. Russia should first
put aside its own interests and motivations and work toward an
immediate cease fire. That is its responsibility as a member of the
UN Security Council with veto power.

The United States, too, must step in as an intermediary. Georgia's
President Saakashvili (40) has deep ties to the U.S., having studied
in America and having had a career working at a law firm in New
York. Since the U.S. in part has supported President Saakashvili,
who has heightened the confrontation with Russia, it should be held
partly responsible.

The confrontation centered on Southern Ossetia goes beyond being a
simple minority group's issue, for it is also entangled in an
international political power game.

Georgia since its independence has clearly wanted to distance itself
from Russia by such actions as its desire to join NATO. On the other
hand, its strategic importance has grown as oil was found near the
Caspian Sea and a pipeline route was laid down for natural gas.

That is why Russia, rising from its dire economic straits in the
1990s, began to strengthen its influence by squeezing the Georgian
government. Its support for separatist movements in new Russia, such
as in South Ossetia and Abkhazia, should not be seen as unconnected
to such motivations.

Although the U.S. and Europe have adopted a posture of cooperation
with the Saakashvili government, which is tilting even further
toward the West, the real intention is to avoid sharp confrontation
with Russia. In the armed invasion that has just occurred, there
seems to be a calculated move not to force the indecisive U.S. and
Europe to make a move.

Will Southern Ossetia break away or will it remain an autonomous
state? If this is decided by armed force, it would no doubt set off
sparks among the minority issues here and there in the former Soviet
Union. There is no other means of resolving this except to stop the
fighting and turn to the negotiating table.

The international community must line up behind this, using the
United Nations and other forums.

(6) TOP HEADLINES

Asahi: Mainichi: Yomiuri: Sankei: Tokyo Shimbun:
Uchishiba wins judo gold again, Nakamura strikes bronze

Nikkei:
Government unlikely to hike pension payments in fiscal 2009 despite
inflation


TOKYO 00002201 010 OF 011


Akahata:
Justice Ministry's data at Diet Library record privileges regarding
crimes committed by U.S. servicemen: Reference prohibited due to
government pressure

(7) EDITORIALS

Asahi:
(1) Raise minimum wages of working poor
(2) South Korea getting impatient: Is diplomacy toward neighboring
countries all right as is?

Mainichi:
(1) Possession of nuclear weapons: It is risky to treat India as
exception
(2) Worker Dispatch Law: Amend the Law in manner of rooting out
unstable employment

Yomiuri:
(1) Relocation of Futenma Air Station: Do not lose sight of big
picture of reducing burdens
(2) Blood-drawing equipment: Hospitals too insensitive to infection
risk

Nikkei:
(1) Subprime mortgage fiasco has changed trend of global economy

Sankei:
(1) Shuffled cabinet should pave way for administrative reform,
decentralization
(2) E-encephalitis: Speed up effort to create preventive inoculation
system

Tokyo Shimbun:
(1) Toyota Motors marks fall in profits: Be prepared for recession
in global economy
(2) Ossetia: Prevent conflict from escalating

Akahata:
(1) It is a problem that the government tries to settle noise damage
caused by U.S. military planes with money

(8) Prime Minister's schedule, Aug. 8

NIKKEI (Page 2) (Full)
August 9, 2008

08:34 Depart for China on ASDF U-4 supporting aircraft from Haneda
Airport.
Morning Arrived at Beijing International Airport.
Noon Attended welcoming reception hosted by Chinese President Hu
Jintao and his wife at Great Hall of the People in Beijing.
Afternoon Gave words of encouragement to Japanese team to Beijing
Olympics. Met with President Hu at Zhougnanhai.
Night Attended opening ceremony of Beijing Olympics.
Before down on Aug. 9 Left Beijing Airport on ASDF U-4 supporting
aircraft.

Prime Minister's schedule, Aug. 9

NIKKEI (Page 2) (Full)
August 10, 2008

TOKYO 00002201 011 OF 011



03:56 Arrived at Nagasaki Airport on ASDF U-4 supporting aircraft.
04:46 Et with Nagasaki Mayor Taue.
Attended welcoming reception hosted by Chinese President Hu Jintao
and his wife at Great Hall of the People in Beijing.
10:36 Attended 63rd Nagasaki memorial service at Peace Park.
12:16 Held press conference at Hotel New Nagasaki. Met
representatives of atomic bomb victims, joined by Health Minister
Masuzoe and Nagasaki Gov. Kaneko.
13:33 Visited Meguminooka Nagasaki Atomic Bomb Home.
14:52 Met with Nagasaki Mayor Taue at Nagasaki Airport.
15:11 Left Nagasaki Airport on ASDF U-4 supporting aircraft.
17:21 Arrived at Haneda Airport.
18:02 Signed in to report his return at the Imperial Palace.
18:16 Returned to his official residence.

Prime Minister's schedule, Aug. 10

NIKKEI (Page 2) (Full)
August 11, 2008

He spent the whole day at his official residence.

SCHIEFFER