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RHMFISS/COMUSJAPAN YOKOTA AB JA
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C O N F I D E N T I A L SECTION 01 OF 04 TOKYO 000822 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/14/2031 
TAGS: PREL PGOV ECON CH JA
SUBJECT: CHINA WATCHERS PIN HOPES FOR IMPROVED JAPAN-CHINA 
RELATIONS ON NEXT PRIME MINISTER 
 
REF: A. TOKYO 0698 
 
     ¶B. TOKYO 0775 
 
TOKYO 00000822  001.2 OF 004 
 
 
Classified By: Ambassador J. Thomas Schieffer.  Reasons:1.4(b/d). 
 
¶1.  (C)  Summary:  No improvement in Japan's relations with 
China should be expected during Koizumi's remaining seven 
months in office, according to Diet members and academic 
China specialists contacted by Embassy Tokyo.  Citing 
domestic political difficulties in both countries, our 
interlocutors believe that Koizumi's successor will have to 
overcome a growing sense of anti-Chinese nationalism if the 
bilateral relationship is to be improved.  Most believe that 
the increasing economic interdependence between the two 
countries makes it imperative for the next prime minister to 
consider how to deal with visits to Yasukuni shrine, which 
has become an unfortunate focal point for Japan-China 
relations.  Both the Diet members and academics we consulted 
stressed the risky nature of direct U.S. involvement in the 
Japan-China dispute, asserting that it threatened to expose 
differences on history between the United States and Japan 
which could be exploited by China.  Strongly and unanimously 
favoring improved relations with China, our interlocutors are 
concerned about the possibility of Chinese criticism of 
Japanese politicians during the delicate period leading up to 
the LDP presidential election in September.  At present, 
however, it does not appear that any of Koizumi's most likely 
successors value the benefits of improved Japan-China 
relations more highly than the political benefits they 
personally gain by appealing to Japanese nationalism.  End 
Summary. 
 
No Improvement Under Koizumi 
---------------------------- 
 
¶2.  (C)   A number of the Embassy's Diet and academic 
contacts interested in China-related issues have all told us 
on a confidential basis that no improvement in Japan-China 
relations can be expected while PM Koizumi is in office. 
They all point to the possibility of a new phase in bilateral 
relations under the next prime minister, but recognize the 
difficulties and uncertainties involved in achieving a 
breakthrough in Japan's currently very difficult relationship 
with China. 
 
Domestic Political Constraints 
------------------------------ 
 
¶3.  (C)  According to our interlocutors, the domestic 
political situation in both Japan and China is to blame for 
the current impasse.  Many fault PM Koizumi for using 
anti-China feeling in Japan to boost his popularity, taking 
advantage of the country's increasing nationalism.  While 
Koizumi now understands the problems his Yasukuni visits have 
created for Japanese diplomacy in Asia, he came to this 
realization too late.  Although Koizumi tried to tone down 
his October 2005 visit, making it briefer and much less 
formal than past visits, the issue had become so politicized 
that the differences were lost on the Japanese public and 
Beijing.  Since much of Koizumi's popularity is based on his 
refusal to compromise, changing his stance on Yasukuni would 
be highly risky for him politically.  Observers point out 
that once the budget is passed in late March, Koizumi will 
come under increasing political attack as the struggle to 
replace him intensifies.  Under such circumstances, taking a 
major step on China relations will become virtually 
impossible, our contacts say.  They fully expect the matter 
of prime ministerial visits to the shrine to carry over to 
the next administration. 
 
¶4.  (C)  Japan's China watchers also expect that Beijing will 
not compromise on the Yasukuni issue.  Several contacts cited 
the Chinese leadership's need to use anti-Japanese sentiment 
to unite the PRC's diverse population in support of the 
Chinese Communist Party, now that communist ideology has lost 
its authority.  Expressing concern over weak civilian control 
of the military, a number of our interlocutors noted 
President Hu's need to demonstrate a hard line on Japan to 
maintain the support of China's military.  Tokyo University 
Professor Akihiko Tanaka told us he believes U.S. expressions 
of concern over Japan-China relations do have a positive 
 
TOKYO 00000822  002.2 OF 004 
 
 
effect on PRC thinking.  He added, however, that there is no 
indication China is willing to put the Yasukuni issue on a 
separate track to advance relations with Japan in other 
areas.  According to Keio University Professor Kojima, the 
Prime Minister's Yasukuni visits have become an unfortunate 
focal point of the relationship.  Although the PRC depends on 
continued Japanese investment, technology transfers and 
access to markets for Japanese-branded goods assembled in 
China to continue its economic growth, Kojima feels President 
Hu will adhere to his refusal to meet with Japanese leaders 
until Tokyo makes a firm commitment on Yasukuni visits.  That 
is almost certainly the case ahead of the 17th Party Congress 
in late 2007, he averred. 
 
¶5.  (C)  Japan's growing economic interests and dependence on 
China make it imperative that Japanese political leaders try 
to deal with China in a constructive manner.  Japanese 
business leaders have increasingly expressed concern that the 
"cold" political relations might begin to affect the "hot" 
economic ties.  Yet, growing anti-Chinese nationalism makes 
it difficult to put the relationship on a positive track. 
LDP Diet Member Taro Kono told the Embassy that despite his 
reputation for working to improve ties with China, it has 
recently become extremely difficult politically to take any 
steps on China unless it can be shown that Japan is getting 
something in return.  As Senior Vice Minister of Justice, 
Kono told us he has a number of ideas for improving relations 
with China in legal affairs, yet he hesitates to take such 
steps for political reasons.  Komeito Diet Member Isamu Ueda 
similarly told the Embassy that in years past, Komeito's 
fraternal relations with the CCP were a simple matter of 
shaking hands.  But now that economic relations between the 
two countries are so closely intertwined, real issues have 
arisen that directly affect Komeito's supporters.  When 
Komeito's leaders visit Beijing, they are mindful to show 
they are standing up for their constituents' interests, he 
stated. 
 
Japanese Nationalism and the China Threat 
----------------------------------------- 
 
¶6.  (C)  According to Tokyo University's Tanaka, anti-Chinese 
nationalism in Japan has developed as a counter-reaction to 
anti-Japanese sentiment in the PRC.  He assessed that over 
the past few years, a fairly strong level of public support 
for taking a hard line on China has emerged.  Recent 
statements by FM Aso and DPJ leader Seiji Maehara that China 
is a "threat" are beginning to resonate, he said, noting a 
Yomiuri/Gallup poll in November 2005 in which 76 percent of 
the respondents labeled China a threat.  The Komeito's Ueda 
told us that although China cannot truly be considered a 
threat in the face of Japan's military alliance with the 
United States, China's growing offensive military capability 
is cause for concern -- making transparency a priority issue. 
 LDP Diet Member Keizo Takemi separately expressed discomfort 
with the growing political influence of China's navy in PRC 
leadership circles.  Japanese interests in the East China 
Sea, the Senkakus and other territorial issues all run up 
against the PLA Navy, he observed.  Takemi believes the 
Yasukuni issue has received too much attention and lamented 
the lack of good news to counter the repeated clash of 
interests with China. 
 
¶7.  (C)  Nonetheless, nationalism is not yet the dominant 
voice in Japanese politics.  Professor Kojima reminded us 
that a large segment of the population (including a solid 
majority of the business community) still believes that Japan 
must try to improve its relations with China, and that 
Japanese political leaders should avoid statements and 
actions that arouse the anger of Japan's neighbors.  Many 
people believe a balanced approach should be taken on 
Yasukuni, he asserted.  Recently the conservative Yomiuri 
newspaper (Japan's largest daily) has joined with the liberal 
Asahi Shinbum to condemn the Prime Minister's Yasukuni visits 
and to urge a reevaluation of Japan's militarist past.  LDP 
Diet Member Kono noted that while politicians are quarreling 
with the PRC, many entrepreneurs are becoming increasingly 
concerned about Japan losing influence and market share in 
international commerce due to Japan's bad relations with 
China.  He said that Japanese political leaders do not fully 
understand Japan's growing economic interdependence with 
 
TOKYO 00000822  003.2 OF 004 
 
 
China and are not paying attention to the total negative 
effects that the quarrel is having on Japanese interests. 
The fact that PM Koizumi, Abe and Aso have said that visits 
to the shrine are a personal matter may offer a way out of 
this difficulty, Kono suggested. 
 
A Challenge For Koizumi's Successor 
----------------------------------- 
 
¶8.  (C)  Our interlocutors believe that the leading 
contenders to replace Koizumi are actively considering how to 
approach the Yasukuni issue and Japan's relations with China. 
 Of the four top candidates, former Chief Cabinet Secretary 
Fukuda and Finance Minister Tanigaki have already staked out 
positions generally interpreted as promoting better ties to 
China, but popular support for Foreign Minister Aso and 
front-runner Chief Cabinet Secretary Abe is based in large 
measure on their hard-line nationalist stance.  Nonetheless, 
a number of observers feel that Abe and Aso do not want to 
place themselves in the same predicament as PM Koizumi by 
committing to annual shrine visits.  Still it is hard for 
them to compromise without losing popular support.  The 
latter two have made a tradition of annual personal visits to 
Yasukuni and have stated they will continue to do so.  Our 
interlocutors speculate they will try to do so under 
circumstances that limit the negative fallout from Beijing. 
The LDP's Kono observed to the Embassy that FM Aso has said 
he will continue to visit the shrine, but has also emphasized 
that it is a personal matter, indicating he understands the 
sensitivity of the situation with China, despite his recent 
provocative statements (ref A).  Kono also noted that 
although CCS Abe has taken a similar stand, he has been 
relatively quiet on the issue since becoming Chief Cabinet 
Secretary.  Given Abe's well-established reputation as a 
 
SIPDIS 
nationalist, there is no political advantage in his joining 
the anti-China crowd, Kono opined. 
 
¶9.  (C)  The possibility that the next prime minister might 
usher in a new phase in Japan-China relations depends in part 
on the political circumstances in which the new LDP president 
is elected.  Tokyo University's Tanaka observed that given 
the highly charged nature of the Yasukuni issue, shrine 
visits may well figure in the LDP presidential election 
campaign, forcing the winner to adopt a certain position on 
Yasukuni or relations with China.  He averred that much 
depends on how Beijing reacts to circumstances in Japan 
during this intense political period.  For instance, should 
the Prime Minister or one of the LDP presidential candidates 
decide to visit Yasukuni during the shrine's April spring 
festival or on the sensitive August 15 date, any Chinese 
criticism would be used by the hard-liners to their 
advantage, he opined. 
 
Managing the Relationship Despite the Stalemate 
--------------------------------------------- -- 
 
¶10.  (C)  LDP Diet Member Koichi Kato told the Embassy that 
he completely discounted the possibility of a near-term 
improvement in Japan's relationship with China.  However, he 
thought that some risk-management steps should be taken to 
prevent potential conflict.  He cited the ongoing dialogue 
between Vice Minister Yachi and Vice Minister Dai Bingguo 
(ref B) as useful in that regard, even without a breakthrough 
in the relationship.  National Institute of Defense Studies 
(NIDS) Research Fellow Yasuhiro Matsuda expressed the view 
that such a channel of communication may prove invaluable 
should a new prime minister wish to undertake an initiative 
on China relations.  He thought that a Track II dialogue 
between Japan and China on history might also prove useful, 
but wondered whether such a dialogue would be able to 
overcome the growing distrust between the Japanese and 
Chinese people. 
 
U.S. Involvement 
---------------- 
 
¶11.  (C)  Several of our contacts mentioned that direct U.S. 
intervention in the Japan-China relationship is a 
particularly difficult matter for Japan.  The alliance with 
the U.S. is crucial for enabling Japan to deal with China on 
an even footing, yet U.S. involvement on the history issue 
 
TOKYO 00000822  004.2 OF 004 
 
 
may reveal differences between the two allies that could be 
exploited by China, they said.  Moreover, the Japanese public 
is sensitive to perceptions of external pressure from the 
United States.  LDP Diet Member Takemi and others related 
that nationalism in Japan is not only based on anti-China 
sentiment, but on opposition to the United States as well. 
Should the United States be seen as pressing Japan to adopt a 
particular historical interpretation or policy, there could 
well be a backlash against the United States, he warned. 
Diet Member Takemi, who speaks Chinese and studied at 
Harvard, explained that nationalists would assert the need 
for Japan to be more independent of the United States and 
would call into question the value of the security alliance. 
 
 
Comment 
------- 
 
¶12.  (C)   Our interlocutors disagree with PM Koizumi's 
repeated visits to Yasukuni shrine, citing the need to 
improve relations with China.  They have also given up on 
Koizumi resolving the current stalemate.  Due to the 
uncertainties in the LDP presidential campaign and the 
numerous domestic political constraints, our contacts all 
believe it is too hard to tell whether the next prime 
minister will be able to improve ties with China, even if 
that is a priority goal.  The best chance for such an 
outcome, they insist, is for a candidate with a good 
understanding of the importance of Japan's interests in China 
to be elected LDP president, and for China to tread carefully 
in the run-up to that election.  At present, however, it does 
not appear that any of Koizumi's most likely successors value 
the benefits of improved Japan-China relations more highly 
than the political benefits they personally gain by appealing 
to Japanese nationalism. 
SCHIEFFER