DAILY SUMMARY OF JAPANESE PRESS 11/21/08

UNCLAS SECTION 01 OF 06 TOKYO 003218 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 11/21/08 INDEX: (1) China's sovereign wealth fund negotiating with AIG to acquire stake in Alico at cost of up to one trillion yen (Nikkei) (2) Seiron column by Doshisha University Prof. Koji Murata: Japanese people, too, should stop always following U.S. footsteps (Sankei) (3) Economic Minister-Counselor to Japan Cekuta pursues the views of Hokkaido on the BSE issue and other matters (Hokkaido Shimbun) (4) TOP HEADLINES (5) EDITORIALS (6) Prime Minister's schedule, November 20 (Nikkei) ARTICLES: (1) China's sovereign wealth fund negotiating with AIG to acquire stake in Alico at cost of up to one trillion yen NIKKEI (Top Play) (Full) November 21, 2008 China Investment Corp. (CIC),a Chinese sovereign wealth fund, has started negotiations with the struggling U.S. giant American International Group (AIG) on a planned massive investment in American Life Insurance Co., also known as Alico, which is under the wings of AIG. The Chinese entity is aiming to reach a deal by the end of the year on a plan to purchase a stake of up to 49 PERCENT in Alico. Alico are doing life insurance business in more than 55 countries, including Japan. China, which sees the ongoing financial crisis as a good opportunity, has suddenly appeared on the main stage to reorganize the global insurance market. According to informed sources yesterday, a consortium, which CIC formed with Chinese insurers, has held preferential negotiations with AIG to purchase its shares in Alico, with the end of this year as their deadline. The Chinese side is expected to propose 500 billion yen to one trillion yen as the amount paid for acquiring the stake of 49 PERCENT in Alico. Citing AIG's future growth potential, AIG reportedly has set forth the condition that it will keep more than 50 PERCENT of voting rights in Alico to maintain the right of management. If both sides reach an agreement, this could open the way for future capital and business tie-ups between AIG and the Chinese investors. Alico Japan, a branch of U.S. firm Alico, accounts for 60-70 PERCENT of the company's entire insurance premium revenue. If the investment plan is implemented, China will make an effective entry into the Japanese insurance market. China's entry could trigger a reorganization of the industry. Alico Japan's insurance policies are likely to be maintained even if the Chinese investors acquire Alico shares. AIG announced on Oct. 3 its decision to sell Japanese subsidiaries AIG Edison Life Insurance Co., AIG Star Life Insurance Co., and Alico Japan. AIG decided to sell AOG Edison and AIG Star in a package, but the possibility had appeared of selling Alico Japan separate from its other global businesses. But the company gave up TOKYO 00003218 002 OF 006 on selling the global operations by the piece, based on the judgment that their values might fall. AIG rapidly fell in financially difficult in the fallouts of the credit woes stemming from the U.S. subprime mortgage crisis. AIG has undertaken large volumes of credit default swaps, a type of derivative that insures against defaults, so the U.S. government judged that a collapse of AIG will inevitably have a serious impact on the global financial market. Based on this judgment, the government came up with expanded assistance measures, such as the injection of public funds in AIG and easing loan terms. In accordance with the government's assistance decision, AIG intends to accelerate the sale of its assets, but its management-reconstruction plan has not advanced smoothly. Given this, many observers anticipated that if the reconstruction plan ran against a snag, the current financial crisis could become even more serious. The fate of AIG was a matter of concern for the global stock market. Observers speculate that China is aiming to pave the way to become a major player in the global insurance market by investing in Alico. China also seems to be aiming to learn advanced know-how on insurance services and make use of the know-how for its domestic business. Reportedly, though, CIC has latent losses in some share holdings, affected by the U.S.-triggered financial woes. Given this, negotiations on such conditions as the purchase price may have rough going. (2) Seiron column by Doshisha University Prof. Koji Murata: Japanese people, too, should stop always following U.S. footsteps SANKEI (Page 13) (Full) November 19, 2008 Sen. Barack Obama (D-Illinois) was finally elected the next president of the United States. He won a landslide victory, topping a majority of 270 electors. The 47-year-old Obama will become the first black American president. Obama swept away the racial barrier in America, just as John F. Kennedy had broken the religious barrier. Obama is being called the "Black Kennedy" since he speaks as eloquently as Kennedy did and is young like Kennedy was when he became president. Aiming at pursuing dialogues in the international community, Obama has called for a unification of divided American public opinion. Obama, who is asking the American public to unify at a time of national crisis, is reminiscent of Abraham Lincoln in the Civil War era. Lincoln was tall and a native of Illinois. If there had not been a financial crisis, it would have been difficult for Obama to win the presidential election. Dealing with the global financial crisis is the biggest challenge for Obama for the time being. At this point, he appears similar to Franklin Roosevelt, who fought against the Great Depression by coming up with his New Deal program. If Obama fails to manage the financial crisis, he will lose popularity. As a result, he may have to leave the White House after his first term is over. If such happens, he would be following in the footsteps of Jimmy Carter and he might even be called the "Black Carter." TOKYO 00003218 003 OF 006 Top priorities for Obama's foreign policy are restoring civil order in Afghanistan and resolving the issue of Iran's nuclear ambitions. Compared to these issues, the North Korean nuclear issue is not a high priority for the Obama administration. Japan-U.S. relations are in such circumstances. The Obama administration will probably ask Japan for further cooperation in assisting the reconstruction of Afghanistan. However, the Japanese government's position is that it cannot dispatch the Self-Defense Forces (SDF) to that country. How much Japan should cooperate is a matter of policy choice. We must seriously reconsider what kind of international involvements are necessary for Japan, which wants to win a permanent seat on the United Nations Security Council (UNSC). Less than 40 SDF personnel are now participating in UN peacekeeping operations (PKO). The government's official development assistance (ODA) budget has been on the decline. Japan should independently reconsider how to dissolve the issue of North Korea's abductions of Japanese nationals and what kind of methods and strategies should be taken. It should not just seek cooperation from the United States. Although Japan cannot resolve both the nuclear and abduction issues without Washington's involvement, it needs to have independence in its action and not just always seek cooperation from the United States. It is important for Japan to find the right balance between its own independent action and America's involvement. I recently am often questioned about what kind of impact the election of Obama will have on Japan-U.S. relations. However, I think there is a lack of independent ideas -- what Japan should do and what it wants to do with its relations with the United States -- in the questions I have received. The government's -- particularly the Foreign Ministry's -- policy of following the footsteps of the United States has long been criticized. I wonder if the media and public that criticize the government and the Foreign Ministry have followed in the footsteps of the United States in terms of coming up with new ideas. We live in a democratic society. If voters cannot conceive of not following in the footsteps of the United States, it is not surprising that the government and the Foreign Ministry follow them. Lastly, Obama is trying to change the international image of America. In order to improve its international image, Japan, too, needs to think and make more efforts. Attaching priority to improving the nation's international image and pursuing independent actions do not contradict each other. If Japan pursues the latter alone, ignoring the former, it will lapse into self-righteousness. If Japan is aware of the former alone, it will mean to follow the footsteps of the United States or play the hypocrite. The image of a Japan that does not reflect on its past conducts and of a Japan that does not make any apologies for the past are obviously incorrect. Although my ability is limited, I have had discussions on the matter with Americans, Europeans, and Chinese and South Korean people at international conferences. In order to correct the distortion in this image of Japan, a detailed study of history is necessary. No one will probably object to this view. Based on such a study of history, it is important for Japan to present its views persuasively in a calm manner. TOKYO 00003218 004 OF 006 It is difficult for a narrow-minded view, namely, that one's own opinions about modern history form the only true and correct historical view, and calling those who reject it as anti-Japanese -- to get support and understanding not only from opponents in argument but also from third parties. It is time for both Japan and the United States to reconsider a strategy of improving their images in the international community. (3) Economic Minister-Counselor to Japan Cekuta pursues the views of Hokkaido on the BSE issue and other matters HOKKAIDO SHIMBUN (Page 4) (Full) November 20, 2008 Robert Cekuta, minister-counselor for economic affairs at the U.S. Embassy in Japan, met Deputy Governor Noboru Arashida in the Hokkaido prefectural building to pursue the views of the prefectural government on the reason for continuing blanket inspection of cattle for BSE and other issues. The prefectural side, which assumed he was paying a formal courtesy call, ended up taking it as an unexpected application of gaiatsu or foreign pressure from the United States, which is seeking such concessions as the easing of restrictions on beef imports. On the blanket inspections for BSE, the minister-counselor stressed indirectly the safety of U.S.-produced beef. He said: "I have my doubts how much consumers understand about such things as the butchering method for meat. If they were to understand it, the need for such inspections would disappear." The deputy governor replied, "Inspections themselves provide consumers with a feeling of peace of mind." He indicated that the blanket inspections would continue. The minister-counselor also asked about the application of science and technology in the agricultural sector. The deputy governor stated, "Consumers still have an allergy to genetically-modified foods." He pointed out: "What are consumers afraid? It is too bad that Hokkaido cannot receive the benefits of science and technology." He hoped to be able to tackle the dissemination of GM products in Hokkaido. (4) TOP HEADLINES Asahi & Tokyo Shimbun: Ex-vice welfare minister's wife: Man carrying box stabbed her without speaking Mainichi: Wife says attacker was in 30s-40s, wearing work uniform Yomiuri: No fingerprints left at site of ex-vice minister, wife murder in Saitama Nikkei: China's sovereign wealth fund now engaged in negotiations with AIG to acquire big state in Alico Sankei: Violent incidents involving elementary school students on sharp rise TOKYO 00003218 005 OF 006 Akahata: Isuzu Motors dismisses all non-regular employees (5) EDITORIALS Asahi: (1) Aso's words and government carry no weight (2) Judgment on development plan for dry beach of Awase in Okinawa a warning against wasteful projects Mainichi: (1) Aso controversial remark critical of doctors quite serious (2) Reflect survey results on children's problem deeds in specific measures Yomiuri: (1) Specify how to bear costs and pay benefits for social welfare (2) Can actual situation on bullying be grasped through survey? Nikkei: (1) Prime minister's statement on postal service encourages moves by anti-reformists (2) Slump in consumption casting shadow over U.S. stock market Sankei: (1) Return to policy of freeing up road tax revenues (2) Senior NPA officer arrested for drunk driving: Stricter measures needed Tokyo Shimbun: (1) Government must tackle issue of reviewing pension system (2) Survey finds bullying cases decreasing but ways becoming loathsome Akahata: (1) Possessing countries possessing should not act to preserve cluster bombs (6) Prime Minister's schedule, November 20 NIKKEI (Page 2) (Full) November 21, 2008 07:33 Had a walk around his private residence in Kamiyamacho. 10:02 Met at the Kantei Japan-Bangladesh parliamentary league vice-chairman Kosuke Ito and others, followed by Vice Foreign Minister Yabunaka. 11:14 Met Internal and Communications Ministry Vice Minister for Policy Coordination Terasaki, Deputy Foreign Ministers Sasae and Kohno, METI Deputy Director General for Policy Coordination Ishige and others, joined in by Deputy Chief Cabinet Secretary Matsumoto. 14:35 Met Japan Medical Association Chairman Karasawa and Vice Chairman Takeshima in the presence of Upper House member Hidetoshi Nishijima. TOKYO 00003218 006 OF 006 15:21 Met advisor Yamaguchi, followed by Cabinet Intelligence Director Mitani. 16:03 Met Matsumoto, Sasae and Kohno, joined in by European Affairs Bureau Director-General Nishizaki and North American Affairs Bureau Director-General Nishimiya. 16:55 Met former Deputy Chief Cabinet Secretary Iwaki and others, followed by Regional Bloc System Committee Chairman Sugiura and his deputy Sata. 17:29 Met Finance Minister Nakagawa, Economic and Fiscal Policy Minister Yosano, Chief Cabinet Secretary Kawamura, Vice Finance Minister Sugimoto and others. Nakagawa stayed on. 18:02 Attended a Council on Economic and Fiscal Policy meeting. 19:11 Met National Police Agency Director-General Yoshimura. 20:08 Returned to his private residence. Prime Minister's schedule, November 21 NIKKEI (Page 2) (Full) November 21, 2008 00:08 Departed from Haneda Airport on a government plane to attend the APEC summit. SCHIEFFER