Identifier
Created
Classification
Origin
09TOKYO852
2009-04-14 08:06:00
CONFIDENTIAL
Embassy Tokyo
Cable title:  

CODEL MCCAIN MEETS WITH PRIME MINISTER ASO

Tags:  ECON EFIN PREL PGOV PMIL JA 
pdf how-to read a cable
VZCZCXRO9006
PP RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHPB
DE RUEHKO #0852/01 1040806
ZNY CCCCC ZZH
P 140806Z APR 09
FM AMEMBASSY TOKYO
TO RUEKJCS/SECDEF WASHDC PRIORITY
RUEATRS/TREASURY DEPT WASHDC PRIORITY
RHHJJPI/PACOM IDHS HONOLULU HI PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 2280
RHMCSUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 8784
RUEHUL/AMEMBASSY SEOUL PRIORITY 4807
RUEHFK/AMCONSUL FUKUOKA PRIORITY 3504
RUEHOK/AMCONSUL OSAKA KOBE PRIORITY 7305
RUEHKSO/AMCONSUL SAPPORO PRIORITY 4041
RUEHGH/AMCONSUL SHANGHAI PRIORITY 0570
RUEHSH/AMCONSUL SHENYANG PRIORITY 0693
C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 000852 

SIPDIS

STATE FOR E, EAP/J AND EAP/CM
NSC FOR DANNY RUSSELL AND JIM LOI

E.O. 12958: DECL: 04/13/2019
TAGS: ECON EFIN PREL PGOV PMIL JA
SUBJECT: CODEL MCCAIN MEETS WITH PRIME MINISTER ASO

TOKYO 00000852 001.2 OF 002


Classified By: CDA James P. Zumwalt, Reasons 1.4 (B) and (D).

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 000852

SIPDIS

STATE FOR E, EAP/J AND EAP/CM
NSC FOR DANNY RUSSELL AND JIM LOI

E.O. 12958: DECL: 04/13/2019
TAGS: ECON EFIN PREL PGOV PMIL JA
SUBJECT: CODEL MCCAIN MEETS WITH PRIME MINISTER ASO

TOKYO 00000852 001.2 OF 002


Classified By: CDA James P. Zumwalt, Reasons 1.4 (B) and (D).


1. (C) Summary: Senators John McCain (R-AZ),Lindsay Graham
(R-SC),and Amy Klobuchar (D-MN) met with Prime Minister Aso
April 9 and exchanged views on China's defense spending and
its economy, North Korea, and the London G20 Summit and
nuclear energy. Senator McCain thanked PM Aso for Japan's
contributions to the efforts to stabilize Afghanistan and
Iraq and reaffirmed that the U.S.-Japan Security Alliance has
broad bipartisan Congressional support. The Prime Minister
in turn thanked the United States for its close collaboration
before, during and after the launch of the North Korean
missile and said Japan is "extremely satisfied" with the
level of cooperation. End Summary.

Concerns -- Chinese Defense Expenditures and Export-led Growth
-------------- --------------


2. (C) PM Aso told CODEL McCain Japan is concerned about two
issues in China: the number one concern is the
non-transparent double-digit annual increase in expenditure
on defense, and the second concern is China's reliance on
export-led growth to fuel its economy. Aso explained that
Japanese-Chinese relations have "not been good" during the
1,500 years of bilateral relations. "Today might be the best
relationship ever," Aso proclaimed, and said the December
2008 trilateral Japan-China-South Korea trilateral summit was
the first time the three leaders had met in a stand alone
summit meeting. He said China had been reluctant to hold
talks during his time as Foreign Minister, but the leadership
changed its mind in 2008 because of deteriorating economic
conditions. However, China's regional intentions remain
unclear and its defense priorities remain non-transparent.
The Chinese are working to become a naval power and are
building an aircraft carrier, a development Aso described as
troubling because German, Japanese and Russian efforts to
develop each facet of military power resulted in global

problems.


3. (C) The second major concern for Japan is China's
worsening economic situation, which Aso described as "much
worse than Japan's." China remains a "merchant economy" that
only exports goods. Aso said Chinese firms are good at
making profits, but are not particularly strong in
manufacturing. In order to manage the worsening economy, the
Chinese government is sending workers to inland provinces,
but not to their homes because of concerns over unrest. Aso
said there were over 8,000 "turmoils" (riots) in 2008 and the
Chinese government is giving laid-off workers jobs in
construction industries in an effort to maintain social
stability. Aso added the only way the Chinese Communist
Party can maintain political stability is through economic
growth, and that requires policies to stimulate domestic
demand.

North Korea
--------------


4. (C) Aso explained Japan has tightened regulations on
remittances to North Korea following the April 4 missile
launch to include lowering the reporting threshold on
remittances from JPY30 million to JPY10 million. Japan's
actions, however, are not dissuading the DPRK from moving
forward on its missile programs because China has increased
its trade with North Korea as Japanese exports fell.
China-DPRK trade exceed JPY500 billion in 2008, more than
offsetting Japan's export ban, Aso told the Senators. (NOTE:
Aso said Japanese-DPRK trade fell to JPY800 million in 2008
from a high of JPY60 billion. END NOTE).


5. (C) The DPRK remains a very capable developer of missiles
and bombs and the situation on the Korean peninsula is "very
serious." Aso is skeptical the DPRK can develop a nuclear
weapon and questions their technological ability to
miniaturize it for a warhead, but added the DPRK is improving
its programs as evidenced by three successively better
missile launches and two missile varieties: the Nodong medium
range and Taepodong long range ballistic missile.

TOKYO 00000852 002.2 OF 002



G20 Impressions
--------------


6. (C) Aso told the Senators the United States, UK and Japan
understand the importance of fiscal stimulus and recognize
government expenditures are "very important" right now. He
added Germany and other EU members were reluctant to do more
during the London Summit because they do not have Japan's
experience with deflation.

Nuclear Energy
--------------


7. (C) Describing Japan's 30 year successful history with
nuclear energy, Aso told the Senators Japan has constructed
31 reactors since 1980 without a single fatal accident.
Japan's has world class technology and many countries want to
procure Japan's nuclear know-how. Aso told CODEL McCain the
Russian government attempted to buy nuclear technology from
Japan in 2007, but when contract talks failed the Russian
government attempted to purchase the companies outright.
Fortunately, Aso said, the price of oil plummeted from
$150/barrel to below $40/barrel ending the Russian bids for
Japanese nuclear technology companies.
ZUMWALT