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UNCLAS SECTION 01 OF 10 TOKYO 002075 
 
SIPDIS 
 
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: JAPANESE MORNING PRESS HIGHLIGHTS 04/18/06 
 
Index: 
 
¶1.   Top headlines 
¶2.   Editorials 
¶3.   Prime Minister's daily schedule 
 
Middle East focus: 
¶4.   Government plans to freeze aid to Palestinian Authority, 
  lining up with US, EU 
¶5.   Vice foreign minister lining up talks with Iranian officials 
on nuclear issue 
 
China affairs: 
¶6.   Another headache for government as China challenges Japan's 
  EEZ in E. China, Japan seas 
¶7.   Japan Coast Guard did not notify Prime Minister's office 
about China's ban on navigation in E. China Sea median line area 
until two weeks later 
 
Defense issues: 
¶8.   Mayor of Yokosuka ready to accept US nuclear-powered carrier 
  if safety assured 
¶9.   Ambassador Schieffer briefs Foreign Minister Aso on safety 
of US nuclear-powered carriers 
¶10.  Japan to allow US forces to use two bases in Kyushu as relay 
hubs during a contingency 
¶11.  US, Japan agree to efforts to persuade Iwakuni City to 
accept Atsugi jet transfer to Iwakuni base 
¶12.  Chief Cabinet Secretary Abe wants to probe into government's 
interpretation of Japan's use of right of collective self-defense 
 
Political agenda: 
¶13.  Prime Minister Koizumi's statement ruling out extension of 
  current Diet session perplexes ruling camp, which has backlog of 
  important bills 
¶14.  Uncertain whether the amendments to the Basic Education Law 
will pass the Diet this session as planned 
¶15.  Minshuto head Ozawa, changing personal policy, will now hold 
regular press conferences 
 
¶16.  Environment Minister Koike returns to work after 19 days in 
  hospital for acute pneumonia 
 
¶17.  Japan's overseas production of autos at 10 million mark now 
  exceeds domestic production 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi, Mainichi & Sankei: 
Kubota to pay up to 46 million yen to compensate asbestos victims 
 
Yomiuri: 
FTC suspects bid rigging for sewage plant projects worth 100 
billion yen 
 
Nihon Keizai: 
Nomura Group to set up investment fund for hospital, nursing care 
facilities, real estate 
 
Tokyo Shimbun: 
 
TOKYO 00002075  002 OF 010 
 
 
Kimura Construction suspected of window-dressing accounts to the 
tune of 360 million yen 
 
2) EDITORIALS 
 
Asahi: 
(1)  Shortage of doctors: Consolidating hospitals is one idea 
(2)  Organ transplant law: Find a way to help children 
 
Mainichi: 
(1)  Long-term interest rate hike: Show ultimate solution for 
fiscal reconstruction 
(2)  Private Information Protection Law: A year in which only 
bureaucrats benefited 
 
Yomiuri: 
(1)  Fingerprinting visitors common, necessary 
(2)  Utilize labor law system as means to settle labor-management 
disputes 
 
Nihon Keizai: 
(1)  Find legal gaps by investigating the quake-resistance data 
falsification scam 
(2)  China urged to explain sea traffic ban 
 
Sankei: 
(1)  China's ban on ship traffic: Japan must lodge protest with 
China against aggression 
(2)  Falsified quake-resistance data scam: Nothing has been 
resolved yet 
 
Tokyo Shimbun: 
(1)  Get to the root of faulty quake-resistance scandal 
(2)  ETC trouble: Use should be made easier 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, April 17 
 
NIHON KEIZAI (Page 2)  (Full) 
April 18, 2006 
 
10:27 
Met with Brazil TV Bandeirantes president and his wife. 
 
11:27 
Met with JDA Director-General Nukaga. 
 
12:04 
Attended a liaison meeting of the government and the ruling 
parties. 
 
14:29 
Met with State Minister in Charge of Administrative Reform Chuma 
and Deputy Chief Cabinet Secretary Saka. 
 
15:32 
Met METI Minister Nikai, Natural Resources and Energy Agency 
Director-General Kodaira, and METI International Trade Policy 
Bureau Director-General Kitamura. 
 
16:04 
 
TOKYO 00002075  003 OF 010 
 
 
Met with Ambassador to Russia Saito and others. Afterwards, met 
with Public Security Investigation Agency Director-General 
Oizumi. 
 
17:01 
Attended a staff meeting in Diet. 
 
17:28 
Met with Environment Minister Koike at Kantei. 
 
18:30 
Met with Cameroon President Biya at residence and later hosted a 
dinner party for the president. 
 
4) Government plans to freeze aid to Palestinian Authority, 
lining up with US, EU 
 
YOMIURI (Page 2) (Excerpt) 
Evening, April 17, 2006 
 
The Japanese government has firmed up its intention to freeze for 
the time being new economic assistance, such as social 
infrastructure, to the Palestinian Authority that is led by 
Hamas, an Islamic fundamentalist organization. The aim is to line 
up with the United States and European Union (EU), which have 
already announced a halting of assistance, and to pressure Hamas 
to change its armed-struggle policy line. 
 
The halt in assistance will be limited to new projects to 
construct social capital infrastructure. In the event that Hamas 
requests humanitarian assistance, such as food supplies, Japan 
will take a stance of complying with it. 
 
The government will consider restarting aid upon consulting with 
the US and EU, and assessing whether the Hamas-led government has 
changed its antagonistic policy toward Israel. When Foreign 
Minister Aso visits the US during the Golden Week holidays in 
early May, he plans to exchange views with US officials on this 
issue, as well. The government's position is to avoid direct 
negotiations with the Hamas government, and instead, to use 
President Abbas as the contact point for negotiations. 
 
5) Coordination underway to hold senior-working-level talks with 
Iran 
 
NIHON KEIZAI (Page 2) (Full) 
April 18, 2006 
 
Vice Foreign Minister Shotaro Yachi yesterday told a press 
conference that the Japanese and Iranian governments were making 
arrangements to hold senior-working level talks in Teheran. Yachi 
stopped short of mentioning a specific timeframe, but he stated: 
"We'd like to meet them as soon as possible." 
 
6) Emergence of disputes over EEZ in East China Sea and Sea of 
Japan involving Japan, its neighbors 
 
MAINICHI (Page 2) (Full) 
April 18, 2006 
 
Disputes over exclusive economic zones in the East China Sea and 
the Sea of Japan are emerging, involving Japan, China, and South 
 
TOKYO 00002075  004 OF 010 
 
 
Korea. In the East China Sea, China issued a warning notice 
against navigation, which bans ships from navigating in the 
waters around the Japan-China median line, and Japan has raised 
an objection. In the Sea of Japan, the Japan Coast Guard (JCG) 
plans to conduct a marine survey around Takeshima (or Dokdo in 
Korean), while South Korea has warned that it will take strong 
measures, including seizing ships. 
 
China's "warning against sea traffic" around its gas field 
 
China's warning notice is intended to ban ship traffic in a 
narrow area stretching some 200 kilometers south and 3.6 or so 
kilometers east to west from its Pinghu gas field located on the 
north side of the Japan-China median line, on the grounds of 
expanding the gas field. China has stated in the notice that it 
will lay pipelines and cables in the area from March 1 through 
Sept. 30. But Japan was unaware of the ban until April 13, when 
it alerted ships around the area to the sea traffic ban, because 
it had not been notified. 
 
According to the JCG, it is often the case that bans on ship 
navigation are issued in a narrow area, such as the inside of a 
bay, for the safety of ships when offshore construction or 
military drills are carried out, but it is unusual to ban sea 
traffic for a long time and in a broad area in the middle of the 
ocean. The government sees it as a problem that the area subject 
to China's traffic ban involves Japan's territory, crossing over 
Japan-China median line. 
 
Japan and China are in a dispute over the rights to explore gas 
fields around the median line. At a press briefing yesterday, 
Chief Cabinet Secretary Shinzo Abe criticized China for violating 
Japan's rights: "Such an action violates our country's sovereign 
rights, as well as the United Nations Convention on the Law of 
the Sea (that stipulates the rights of coastal countries and 
other rights)." The Foreign Ministry conveyed Japan's concern to 
China on April 14 and 16 and made inquiries about all the facts 
concerning the matter. It is waiting for a response from China. 
 
7) Prime Minister's office out of the loop for two weeks about 
China's sea traffic ban in East China Sea, despite JCG having 
grasped it late last month; Foreign Ministry slow to make 
inquiries about it 
 
SANKEI (Page 1) (Excerpts) 
April 18, 2006 
 
The Japan Coast Guard (JCG) grasped late last month that the 
Chinese government, which is exploring oil and gas fields in the 
East China Sea, had posted a ban on sea traffic by general ships 
in the waters around the Japan-China median line in the East 
China Sea, but the Prime Minister's Official Residence (Kantei) 
did not receive any notice about the matter before April 14. 
Several government officials revealed this information. The 
Foreign Ministry likewise did not take action before April 14 to 
make inquiries about the matter. Questions are now again raised 
about the government's crisis management system. 
 
The widespread view is that because informal consultations among 
representatives to the six-party talks on North Korea's nuclear 
programs, including Chinese Vice Foreign Minister Wu Dawei, were 
held in Tokyo April 9-12, Japan might have avoided bringing up 
 
TOKYO 00002075  005 OF 010 
 
 
the matter during that time. 
 
According to a source concerned, the JCG found a notice about sea 
traffic ban on the website of the Chinese Maritime Bureau late 
March and immediately asked China about it via mail, but China 
did not reply for one week. Later, China sent the JCG a mail 
denying the construction work of expanding its Pinghu gas field. 
With no proper response made by China to Japan's inquiries, the 
JCG reportedly ended up failing to confirm all the facts about 
the matter. 
 
8) Yokosuka mayor to accept US nuclear carrier deployment 
premised on safety 
 
ASAHI (Page 3) (Full) 
April 18, 2006 
 
The US government yesterday submitted a document to the city of 
Yokosuka, Kanagawa Prefecture, regarding the US Navy's plan to 
deploy the USS George Washington, a nuclear-powered aircraft 
carrier, to its Yokosuka base. The document, provided to Yokosuka 
Mayor Ryoichi Kabaya through the Foreign Ministry, explains the 
safety of nuclear-powered warships, including their architecture 
and operations. In response, Kabaya told a press conference that 
he cannot find out any reason to oppose the carrier's deployment 
to the base if the document is reliable. With this, the mayor 
clarified that he would accept a nuclear carrier if its safety is 
confirmed. 
 
At present, the Yokosuka base is home to the USS Kitty Hawk, an 
oil-fueled conventional aircraft carrier. The city has objected 
to the planned deployment of a nuclear-powered aircraft carrier 
to the base and has asked the Japanese and US governments to 
continue to deploy a conventional carrier even after the Kitty 
Hawk is mothballed. 
 
Kabaya received a briefing yesterday on the document from the 
Foreign Ministry's Japan-US Security Treaty Division Director 
Junji Shimada. In his press remarks, the mayor gave a positive 
evaluation of the document, saying, "It's more specific and 
detailed than expected, and it's not perfunctory." The mayor also 
said, "I've asked for a conventional ship, and the bottom line is 
safety." He added: "There are still problems, such as disaster 
prevention measures, but I think I will accept the planned 
deployment of a nuclear carrier (if its safety is confirmed.) I 
will have no reason to oppose it." 
 
9) US envoy briefs Aso on nuclear warship safety 
 
ASAHI (Page 3) (Full) 
April 18, 2006 
 
US Ambassador to Japan Schieffer met with Foreign Minister Aso 
yesterday in Tokyo and handed a document to Aso, explaining the 
safety of US nuclear-powered warships from the perspective of 
their architecture, operations, and safeguards in connection with 
the US Navy's plan to deploy the USS George Washington to its 
Yokosuka base in Kanagawa Prefecture in 2008. 
 
The document describes the designs and workings of US Navy 
nuclear reactors in detail, and it also details radiological 
dosages on crewmen. "We will cooperate with the (Japanese) 
 
TOKYO 00002075  006 OF 010 
 
 
government in an effort to meet concerns expressed by the 
Japanese people, particularly by (Yokosuka City's) local 
residents," Schieffer said. Aso gave a positive evaluation of the 
presented document, saying: "The Japanese government has 
consistently believed in the safety of US nuclear-powered 
warships during their port calls, and this document endorses that 
judgment." 
 
10) US Marines to use 2 ASDF bases in Kyushu as hubs 
 
NIHON KEIZAI (Page 1) (Full) 
April 18, 2006 
 
Japan will prepare two Air Self-Defense Force (ASDF) bases at 
Tsuiki in Fukuoka Prefecture and at Nyutabaru in Miyazaki 
 
SIPDIS 
Prefecture as relay hubs for the US Marine Corps in the event of 
emergencies near Japan, sources said yesterday. The government 
outlay several ten billion yen to build training facilities, 
aprons for transport planes and helicopters, hangars, and billets 
for emergency use at the two ASDF bases. This will be 
incorporated in a final report to be released in early April on 
the realignment of US forces in Japan. 
 
Japan and the United States held a two-day session of 
intergovernmental working-level consultations in Tokyo on April 
13-14, with senior officials attending. On that occasion, the 
Japanese and US governments basically agreed to prepare the two 
ASDF bases as hubs for the US Marines. 
 
The US Marine Corps, currently deploying about 18,000 troops on 
Japan's southernmost island prefecture of Okinawa, will move 
8,000 of them to Guam in the process of realigning the US 
military in Japan. Japan and the United States have been seeking 
to consolidate military cooperation in order to prepare for 
conflicts on the Korean Peninsula or in the East China Sea. The 
two governments have agreed to share the two ASDF bases that are 
situated geographically close to the region. The Tsuiki base has 
a 2,400-meter runway, and the Nyutabaru base has a 2,700-meter 
base. 
 
The government deems it possible to lessen Okinawa's base-hosting 
burden and to maintain deterrence for Japan's national security. 
 
The US Marine Corps believes that its use of staging bases, other 
than those in Okinawa, will help it respond to ballistic missile 
attacks and other events. The two ASDF bases are expected to 
function as rear-echelon outposts readied with logistics 
including supplies. In addition, the two bases will also serve as 
training sites for fighter jets deployed to Kadena airbase in 
Okinawa. 
 
11) US force realignment: Japan, US agree to focus on convincing 
Iwakuni; US makes concession ahead of mayoral election 
 
SANKEI (Page 5) (Excerpts) 
April 18, 2006 
 
Japan and the United States have outlined a final agreement on 
the US Marine Corps' Iwakuni Air Station in Yamaguchi Prefecture, 
an outstanding issue along with the cost of relocating US Marines 
from Okinawa to Guam as part of the realignment of US forces in 
Japan. The two countries agreed to transfer carrier-based 
 
TOKYO 00002075  007 OF 010 
 
 
aircraft and aerial refueling planes to the Iwakuni base. At the 
same time, the US compromised on relocating large helicopters to 
Guam to reduce Iwakuni's burden. With the Iwakuni mayoral 
election coming up on April 23, the two countries' intentions to 
focus on persuading Iwakuni residents following Okinawa coincided 
with each other. 
 
"In order to constrain the noise level, we will move the 
helicopters from Iwakuni to Guam," Chief Cabinet Secretary Shinzo 
Abe said April 16 in Iwakuni, where he visited for stumping for 
the LDP candidate running in the Iwakuni mayoral race. Abe 
underscored the government's efforts to strike a balance for the 
Iwakuni base. 
 
Through the April 13-14 senior working-level talks, Japan and the 
US reached an agreement on: (1) transferring 12 KC-130 air 
tankers from Futenma Air Station in Okinawa to the Iwakuni base 
and splitting training to the Kanoya base in Kagoshima and Guam; 
(2) moving eight CH53D large transport helicopters from Iwakuni 
to Guam; and (3) building a civilian air terminal at the Iwakuni 
base. 
 
When the two countries produced an interim report last October, 
they had envisaged the Kanoya base as the relocation site for the 
air tankers. But they have changed the plan and picked the 
Iwakuni in the end due to the difficulty to build facilities. 
Local residents may take the decision as an additional burden. In 
a plebiscite in March, Iwakuni citizens said "no" to the plan to 
relocate carrier-based aircraft from Atsugi Naval Base in 
Kanagawa to the base in the city. 
 
Looking back on the process leading up to the bilateral 
agreement, a Japan-US negotiation source commented, "The United 
States made a major concession for realizing the plan to relocate 
aerial refueling planes to Iwakuni." Specifically, the US agreed 
to split training to Iwakuni, Kanoya, and Guam, and to relocate 
all the eight large transport helicopters from Iwakuni to Guam. 
Moving the helicopters that have been operated along with 
helicopters in Okinawa would be disadvantageous to the US 
military. But Washington has recently proposed such an option, 
according to the negotiation source. The bilateral agreement on 
building a civilian air terminal has paved the way for the 
military-civilian use of the Iwakuni base, which has long been a 
dream for local residents. 
 
12) Abe expresses eagerness to review government's interpretation 
of right to collective self-defense 
 
SANKEI (Page 5) (Full) 
April 18, 2006 
 
In a meeting of the House of Representatives' Special Committee 
on Iraq Reconstruction Assistance yesterday, Chief Cabinet 
Secretary Shinzo Abe stated regarding the government's 
 
SIPDIS 
interpretation of the right to collective self-defense: "It is 
important to always examine and look into what is possible under 
constitutional constraints as times change, and we will have to 
do so." The government's interpretation is that "Japan has the 
right under international law but is not allowed to use it under 
the Constitution." Abe's remark indicates the necessity of 
reviewing this interpretation. 
 
 
TOKYO 00002075  008 OF 010 
 
 
Prime Minister Junichiro Koizumi also expressed a similar view in 
a press conference just after he assumed the current post. Abe, 
who is viewed as the most likely candidate to succeed Koizumi, 
expressed an eagerness to tackle the challenge being left undone 
by Prime Minister Koizumi. 
 
Abe made the above remark in response to a question by Democratic 
Party of Japan member Akihisa Nagashima. He emphasized no change 
in the government's current interpretation but commented: "The 
position based on this interpretation is quite uncommon, even in 
rest of the world." He then stressed the necessity of examining 
and studying the present interpretation, saying: "We must not 
allow some problem to occur when Self-Defense Force members are 
engaged in operations with troops dispatched from other countries 
in the international community. It is also necessary to prevent 
SDF troops from getting left in the lurch." 
 
In a Lower House Budget Committee meeting in 2004, when he was 
serving as Liberal Democratic Party secretary general, Abe said: 
"It might be possible to look into the possibility of allowing 
SDF troops to exercise (the right of collective self-defense)?" 
 
13) Prime Minister states, "I will not extend the Diet session"; 
Is he more serious than people had thought?; Ruling parties 
perplexed; Timeframe for passing bill amending Basic Education 
Law likely to be affected, if not extended 
 
NIHON KEIZAI (Page 2) (Excerpts) 
April 18, 2006 
 
Prime Minister Junichiro Koizumi stated that he had no intention 
of extending the current Diet session, which is to be adjourned 
on June 18. The statement is giving rise to speculation among 
ruling party members. At first, many thought he made that 
statement in order to cut off the possibility of retreat so as to 
facilitate deliberations on such legislation as the 
administrative reform promotion bill. However, some are now 
beginning to suspect that the prime minister made that statement 
more seriously than people had thought. It may be possible to 
present bills, including the amendment to the Basic Education 
Law, that would likely take time to reach an agreement in the 
ruling parties on, to the Diet, but it will be difficult to pass 
them into law without extending the session. Ruling party members 
are perplexed, unable to fathom the true intention of the prime 
minister. 
 
Referring to the handling of various bills, including the 
amendment to the Basic Education Law, the prime minister during 
yesterday's liaison council meeting between the government and 
the ruling parties gave this order: "I would like both the Lower 
House and the Upper House to discuss how to deal with the bills, 
based on the premise that the Diet session will not be extended." 
The prime minister's order has made party members wonder there 
may be something more than principle in his statement. 
 
Closely related to LDP presidential election 
 
One reason why various speculation has been floated is that how 
the current session ends is closely related to the LDP 
presidential election in September. Among Koizumi's potential 
successors, Shinzo Abe, Taro Aso, and Sadakazu Tanigaki are 
cabinet ministers. As long as the Diet is session, they may 
 
TOKYO 00002075  009 OF 010 
 
 
hesitate to overtly declare their candidacies. As a result, they 
may get off to a slow start. 
 
If the Diet is not extended, political circles will be caught up 
in speculation for the remaining three months on who will succeed 
Koizumi. LDP Secretary General Tsutomu Takebe, who favors Abe, is 
considering a way to allow the public to take part in the party 
presidential race, by holding gatherings across the country at 
which all the candidates would give speeches. If the prime 
minister were to give the green light to Takebe's idea, it would 
be advantageous to Abe. 
 
The Democratic Party of Japan (DPJ or Minshuto) has been gaining 
momentum since Ichiro Ozawa became the new president. Some are of 
the view, therefore, that Koizumi's statement was intended to 
contain Ozawa's maneuvering by boosting the atmosphere for the 
presidential race. 
 
14) Passage of bill amending the Basic Education Law during 
current Diet session uncertain; Government, ruling camp want to 
avoid confrontation with Minshuto 
 
MAINICHI (Page 5) (Excerpts) 
April 18, 2006 
 
The ruling Liberal Democratic Party (LDP) and the New Komeito 
have agreed on amendments to the Basic Education Law. However, 
the government and ruling coalition have failed to reach an 
agreement on when to submit a bill to the ongoing session. Prime 
Minister Junichiro Koizumi has reiterated, "I would like to see 
the Diet situation before making a decision." Since some ruling 
camp members have predicted that the bill will be carried over to 
the next Diet session, whether the bill will clear the Diet is 
uncertain. The reasons seem to be that an extension of the 
session would be necessary in order to pass the bill during the 
current session and that the government and ruling bloc want to 
avoid an unnecessary confrontation with Minshuto (Democratic 
Party of Japan) President Ichiro Ozawa. 
 
Koizumi took a cautious stance about the timing of submitting a 
bill amending the education law, telling reporters last night: 
 
"A bill promoting administrative reforms and a set of bills on 
reform of the medical system are now being deliberated. We should 
ascertain the course of deliberations on various bills." 
 
15) Minshuto President Ozawa begins regular press briefings today 
 
MAINICHI (Page 5) (Excerpts) 
April 18, 2006 
 
Minshuto (Democratic Party of Japan) President Ichiro Ozawa will 
hold a press conference once a week, starting today. During his 
tenure as secretary general of the now defunct Shinseito (Japan 
Renewal Party) in 1993, he suspended regular press briefings, 
arguing, "I have no obligation (to meet the press); that's a 
service." Because he is known as "media-phobic," some members in 
the main opposition party will have to keep an eye on Ozawa, 
wondering how long he will continue to meet the press. 
 
It has been the practice for Minshuto to hold a press briefing 
Tuesday afternoon. Ozawa had been reluctant to meet the press, 
 
TOKYO 00002075  010 OF 010 
 
 
but he will follow the party's practice since he pledged in the 
party presidential race that he would change. 
 
16) Environment Minister Koike: Women feel more fatigue than men 
as we work 10 times harder than they do 
 
NIHON KEIZAI (Page 2) (Full) 
April 18, 2006 
 
Environment Minister Yuriko Koike returned to her official duties 
yesterday for the first time in 19 days after being hospitalized 
for acute pneumonia. She explained to reporters the reason for 
her extreme fatigue, saying, "In order to prove ourselves to 
society, women work 10 times harder than men. So we often 
overwork." 
 
17) Overseas production of Japanese vehicles exceeds 10 million 
units last year; Production in China expected to expand in 2006 
 
NIHON KEIZAI (Page 1) (Excerpts) 
April 18, 2006 
 
Overseas production by Japanese automakers topped 10 million 
units in 2005. Prospects have now become strong that overseas 
production will outpace domestic production in 2006. Japanese 
automakers first made inroads into Europe and North America, and 
their production bases have now spread to China and India. Output 
at overseas has increased by double-digits for four consecutive 
years, exceeding domestic production, which is increasingly only 
slightly. Fifty years have passed since Japanese auto 
manufacturers started overseas production. They are now going to 
shift to a global management system with eye on overseas markets 
both for production and sales. 
 
The number of vehicles Toyota Motor and seven other car 
manufacturers produced at their overseas production plants 
reached 9.96 million units (excluding those produced under the 
knock-down system with local contents below 40%) in 2005. If 
vehicles manufactured abroad by Isuzu Motors and other truck 
makers (410,000 units) are added, the number of Japanese vehicles 
produced overseas tops 10 million units, which is on a par with 
the scale of domestic production (10.8 million units). 
 
Toyota will start operating a plant with a production capacity of 
100,000 units in Guangzhou, China, and another with production 
capacity of 200,000 units in Texas. Nissan and Honda have also 
come up with a plan to increase production in China. Overseas 
production by Japanese automakers is expected to exceed domestic 
production in 2006. 
 
SCHIEFFER