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UNCLAS SECTION 01 OF 10 TOKYO 000226 
 
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:  DAILY SUMMARY OF JAPANESE PRESS 01/18/07 
 
 
INDEX: 
 
(1) Futenma relocation: Nago City requests revised plan that could 
move V-shaped runway as is to offshore location 
 
(2) Gov't to increase USFJ host subsidies in 4 stages 
 
(3) Japan's risky move to approach NATO; Abe's visit to NATO 
headquarters first for Japanese prime minister 
 
(4) Abe administration: Ruling parties and its members (Part 3): 
Post-Abe hopefuls in action 
 
(5) Editorial: LDP at annual convention appears to be increasingly 
inward looking 
 
(6) Editorial: Prime Minister Abe must aim for a beautiful 
administration first 
 
(7) Scramble for natural resources - Part 9: Oil road runs in 
desert, given decreasing oil output in China 
 
ARTICLES: 
 
(1) Futenma relocation: Nago City requests revised plan that could 
move V-shaped runway as is to offshore location 
 
ASAHI (Page 14) (Full) 
Eve., January 18, 2007 
 
On the issue of relocating the US forces' Futenma Air Station in 
Okinawa Prefecture, Nago City, the site of the relocation, has drawn 
up a revised plan that would shift the location of the current plan, 
Henoko Point, offshore to the southwest. The aim is to move the 
runway far from the neighboring residential area, thus reducing the 
sound from the aircraft and giving consideration to safety. The 
plan, already transmitted to the prefectural government, has 
reportedly received its consent. On the other hand, the city until 
now has been calling for a shortening of the length of the runway 
from the planned 1,800 meters to 1,500 meters, but if the alternate 
base is moved offshore, the city is thinking of allowing the 
1,800-meter runway to be built. 
 
A third round of council meetings between the central government and 
Okinawa on the Futenma relocation is scheduled for Jan. 19. Nago 
City has adopted a policy course of presenting the plan shifting the 
location to the offing as its local plan if at the meeting the 
government does not take a positive stance toward revising the 
current plan on its own. 
 
Regarding the distance for moving the location into the offing, the 
city was not specific, but it is thinking of seeking a revision that 
would put the runway in an area where they could still use Hirashima 
Island for camping and the like after the construction. In addition, 
under the current plan, the area for land reclamation is a spot in 
Oura Bay where the water is approximately 30 meters deep. However, 
if the location is shifted offshore, it would be in shallow waters 
of less than 10 meters deep, allowing the construction time to be 
shortened. 
 
Nago City reached a basic agreement last year in April with the then 
Defense Agency on a plan to build a V-shaped runway at Henoko Point. 
In this agreement, the construction site was basically the Henoko 
 
TOKYO 00000226  002 OF 010 
 
 
Point plan that the Japanese and US governments had agreed to in 
October 2005. 
 
Regarding the city's seeking a revision, a senior city official 
stressed: "The agreement was a 'basic' one for the sake of the talks 
with the government. It did not mean that the current plan to locate 
it at Henoko Point was set. The city until now has always been 
seeking to push the location as much as possible into the sea." 
 
(2) Gov't to increase USFJ host subsidies in 4 stages 
 
TOKYO (Page 1) (Full) 
January 18, 2007 
 
The government yesterday revealed the full text of its draft bill to 
establish a law for special measures to facilitate the planned 
realignment of US forces in Japan. The bill features expanding the 
government's subsidization of municipalities hosting US military 
bases. According to the bill, the government will subsidize 
base-hosting municipalities in four stages: 1) accepting the planned 
realignment of US forces in Japan; 2) setting about an environmental 
assessment; 3) starting construction work for new facilities; 4) and 
completing construction work and starting operation. The bill says 
the government is to pay up to 95% of total costs for public works 
projects in Okinawa Prefecture. The bill also incorporates a 
preferential measure allowing base-hosting local governments to 
issue bonds in a flexible way. 
 
The government plans to subsidize localities housing facilities to 
be newly built for US forces and will also subsidize contiguous 
municipalities. In addition, neighboring municipalities subsidized 
for soundproofing under the current law will be included as well. 
The government will make a cabinet decision on Feb. 9 to adopt the 
bill for its passage through the Diet in its ordinary session to be 
called on Feb. 25. 
 
The legislation is intended to carry out realignment plans in a 
steady way. In concrete terms, the government plans to relocate the 
US Marine Corps' Futenma Air Station in Ginowan City, Okinawa 
Prefecture, to a coastal area of Camp Schwab in the northern Okinawa 
city of Nago. Another realignment plan is to redeploy carrier-borne 
aircraft from Atsugi base in Kanagawa Prefecture to Iwakuni base in 
Yamaguchi Prefecture. In addition, the government also plans to 
transfer F-15 fighter jets' training in part from the US Kadena Air 
Base in Okinawa Prefecture to other bases in mainland prefectures. 
Some base-hosting local communities will likely oppose the 
government's planned expansion of its public investment in return 
for their increased burden of hosting US forces. 
 
(3) Japan's risky move to approach NATO; Abe's visit to NATO 
headquarters first for Japanese prime minister 
 
MAINICHI (Page 2) (Slightly abridged) 
Eve., January 17, 2007 
 
By Tadahiko Mori 
 
Last week, when the Defense Agency (JDA) was upgraded to a ministry 
and the Self-Defense Forces' (SDF) overseas operations were put in 
the category of "principal duties," Prime Minister Shinzo Abe 
visited the North Atlantic Treaty Organization (NATO) headquarters 
in Brussels and vowed to boost cooperation (with NATO) on overseas 
operations. NATO's raison d'etre has changed significantly with the 
 
TOKYO 00000226  003 OF 010 
 
 
end of the Cold War, but it is still the largest and most powerful 
military organization in the world and can exercise the right to 
collective self-defense, though Japan is banned from using that 
right under the Constitution. While asserting that he observes 
various principles mentioned in the Constitution, Abe became the 
first Japanese prime minister to visit NATO headquarters. His 
behavior has given rise to concern among the Japanese public that 
Japan may lean toward "militarism" without giving an account to the 
public. 
 
Let me explain first about the current state of NATO. In the Cold 
War days, when the US and the Soviet Union confronted each other, we 
were taught at school that NATO was a military alliance consisting 
of the United States and Western European nations to counter the 
Warsaw Treaty Organization (Warsaw Pact), composed of communist 
nations. NATO was not something familiar for Japan. 
 
Following the collapse of the Cold War, the Warsaw Pact was 
dissolved in 1991, and when the Soviet Union fell apart, NATO lost 
its raison d'etre it had had until then. With its survival at stake, 
NATO transformed itself into a security organization that would 
extensively cover a broad area from the Atlantic Ocean to Europe. 
The weight of its operations shifted accordingly from its 
participation in direct wars over the so-called nuclear issues to 
its engagement in resolving ethnic disputes or peacekeeping 
operations. 
 
NATO also expanded the purview of its activities, though until then 
the range of its activities had been limited in areas around its 
member nations. When an ethnic dispute arose on the Balkan 
Peninsula, NATO played an active role in addressing the dispute, and 
when the Kosovo war broke out (in 1999), NATO, despite the lack of a 
genuine UN resolution, decided to strike a sovereign nation state 
(the former Yugoslavia). After the 2001 terrorist attacks on the US, 
NATO sent its troops to Afghanistan and Iraq in the name of 
peacekeeping activities. In Afghanistan, a country viewed as a 
battlefield, NATO troops suffered heavy causalities. Since 2005 NATO 
has provided logistic support for peacekeeping operations in Sudan. 
 
No doubt, the 2001 terrorist attacks on the US changed the nature of 
NATO. For a few years until the occurrence of such attacks on the 
US, I covered NATO headquarters in Brussels. At the time, one senior 
NATO officer said to me: "NATO will drop the concept of region in 
the future. Anything that threatens our member nations will be 
regarded as the objects of our strikes." Since then, NATO has been 
steadily following an expansion line. NATO's membership at present 
is 26, an increase from the 12 in 1949, when NATO was founded. 
Making the best use of various relations of partnership, NATO has 
broadened friendly ties with nearby nations. Even Russia joined NATO 
as a quasi-member in 2002, and has cooperated with NATO in military 
affairs. 
 
Moreover, NATO in its summit meeting held last November in Riga, 
Latvia, cited Australia, New Zealand, South Korea, and Japan by name 
and called them political partners sharing values on security. NATO, 
which wants international support for its military operations, 
basically welcomes the spread of political support worldwide. 
 
Japan, meanwhile, wants to step up "military pressure," albeit 
indirectly, on North Korea and China so as to resolve such issues as 
the abductions of Japanese by North Korea. NATO in this context 
could serve as support for Japan. Following Foreign Minister Taro 
Aso's visit to NATO headquarters last May, even Abe visited it 
 
TOKYO 00000226  004 OF 010 
 
 
recently. Behind this move is perhaps Japan's intention to broaden 
support for its bid for a permanent membership of the United Nations 
Security Council (UNSC). 
 
Nagao Hyodo, professor at Tokyo Keizai University, who has promoted 
official contacts with NATO since 1998 when he served as ambassador 
to Belgium, commented: "The globalization of NATO and Tokyo's 
diplomatic consideration are now in agreement." 
 
In the eyes of Japan, the Europe-based NATO appears to be working 
exclusively for Europe, but what it is actually doing is different. 
Basically, NATO works in line with instructions given by the US. 
 
In fact, immediately after the 2001 terrorist attacks in the US, 
NATO exercised the right to collective self-defense for the first 
time at the request of the US. Every member nation of NATO took part 
in the war on terror in various forms (including political and 
financial assistance). 
 
Japan is not a NATO member, but once Japan and NATO build some kind 
of cooperative ties, Japan will have to have a hand in NATO's 
actions, even indirectly. Reacting to Abe's visit to NATO, one 
senior NATO official praised it: "It was an important step for Japan 
and NATO to buttress political and military ties in Asia and the 
Pacific." Prof. Hyodo commented: "Although it's inconceivable for 
Japan to take part directly in military operations, no doubt NATO 
will expect Japan to play the role of financial supporter for 
reconstruction assistance. 
 
In a speech at the NATO's board of directors meeting, Abe stated: 
"It is a historic event and a great pleasure for me to be the first 
Japanese prime minister to take part in the meeting. . . . Japan and 
NATO are partners sharing such values as freedom, democracy, and 
human rights. The Japanese people are no longer hesitant to send the 
Self-Defense Forces (SDF) abroad if their overseas dispatches are 
aimed at bringing peace and stability to the international 
community." 
 
I have leaders of East European nations in their speeches at NATO 
headquarters earnestly seeking to join NATO as "proof of a 
democratic state." The elation I felt in their speeches was also 
there in Abe's speech. 
 
Abe has previously expressed his strong desire to amend the 
Constitution, and his visit to NATO may be part of his diplomatic 
approach on that policy line, but the problem is that he did so even 
before the procedures for constitutional revision have been put in 
motion. A diplomatic approach that can be taken as disregarding the 
Constitution is proceeding before most of the public are aware. 
 
If Japan wants to put more pressure on North Korea, it should do so 
via such political organizations as the UN or the European Union 
(EU) or by making good use of bilateral relations. Japan's move to 
breezily rely on a military organization demonstrates Japan's 
precarious tilt toward the military. Yuichi Hosoya, professor of 
history of international political science at Keio University, 
commented: "There is a difference from (former Prime Minister) 
Koizumi-led diplomacy that focused on the Japan-US alliance, but my 
worry is that if it goes ahead with this approach without any 
long-term strategy showing how Japan will be engaged in the 
international community and with the lack of political will, Japan 
could be forced to do as it is told by NATO." 
 
 
TOKYO 00000226  005 OF 010 
 
 
Regarding the upgrade of the JDA to a ministry, a German newspaper, 
Hamburger Abendblatt, described it as the "end of pacifism," adding, 
"With the end of the Cold War and at increased requests from its 
ally the US, Japan is increasingly prodded to show its initiative on 
international scenes." 
 
At a joint press conference with Abe, NATO Secretary General De Hoop 
Scheffer stated: "How will Japan cooperate with us in the future? 
Everything is up to Japan's decision. I had a very reassuring 
discussion with the prime minister regarding reconstruction 
assistance." Aside from what is the prime minister's real motive, 
his visit to NATO undoubtedly has made European and US military 
people harbor great expectations for Japan's action in the future. 
 
(4) Abe administration: Ruling parties and its members (Part 3): 
Post-Abe hopefuls in action 
 
NIHON KEIZAI (Page 2) (Abridged) 
January 18, 2007 
 
The Liberal Democratic Party convention took place yesterday. Once 
the convention was over, former Finance Minister Sadakazu Tanigaki 
was surrounded by reporters. 
 
Tanigaki delivered a speech in Kyoto, his constituency, on Jan. 15 
in which he highlighted the need to search for a setup for creating 
a middle-of-the-road wing in addition to the right wing, as if to 
attack Prime Minister Shinzo Abe. Tanigaki also revealed that he had 
been asked by Foreign Minister Taro Aso to join hands as part of a 
plan to bring together the three factions that had spun off from the 
now defunct Miyazawa faction. Tanigaki added, "I told Mr. Aso that 
such a step was premature." Tanigaki's bold comment is undoubtedly 
ascribable to the Abe cabinet's plummeting approval rate. Following 
the resignation of Genichiro Sata as administrative reform minister, 
political fund scandals involving Agriculture, Forestry and 
Fisheries Minister Toshikatsu Matsuoka and other lawmakers have 
emerged. 
 
Tanigaki's revelation of the secret meeting with Aso infuriated the 
foreign minister. Tanigaki even revealed that Aso had said, "Let me 
assume (the post of prime minister) first." The dominant view in the 
capitol district of Nagatacho is that 66-year-old Aso can become 
prime minister only if Abe resigns early. "The foreign minister is 
looking ahead," a lawmaker said. 
 
Attention is also focused on the activities of Yasuo Fukuda, who 
gave up running in the LDP presidential race last September. As 
usual, Fukuda spent a large part of the year-end and New Year 
holidays at his home in Tokyo. Many think Fukuda is not concerned 
with the post of prime minister. 
 
Fukuda attended New Year's parties in Gunma Prefecture, his home 
turf, on Jan. 4 and 11 in which he commented, "Even if things are 
going well now, you must remain vigilant." Late last year, Fukuda 
also asked cooperation next year of Seishiro Eto, who had 
spearheaded the campaign to realize a Fukuda administration. 
 
On Jan. 3, former Prime Minister Junichiro Koizumi showed up at the 
National Theater to view a Kabuki play. He quietly enjoyed the drama 
in light security. He has been living easy, for instance, often 
dining with cultural figures. 
 
There is a persistent rumor in the capital area of Nagatacho that 
 
TOKYO 00000226  006 OF 010 
 
 
Koizumi may come back to assume the helm of government again. 
Koizumi has resumed his political activities, attending a meeting in 
his constituency. 
 
"The ruling coalition still holds an overwhelming majority in the 
Lower House, so the results of the Upper House race will not affect 
the prime minister in any way," former Prime Minister Yoshiro Mori 
said on Jan. 16 apparently in an effort to check the moves of 
potential successors to Abe. 
 
In the previous LDP presidential race, everyone rallied around Abe. 
Such vigor no longer exists today. 
 
As far as the post of prime minister is concerned, eagerness and 
demand do not match. Asked by a reporter about the moves of Tanigaki 
and others, Abe said: "The LDP has many promising members. It's good 
that they are all acting vigorously." 
 
(5) Editorial: LDP at annual convention appears to be increasingly 
inward looking 
 
TOKYO SHIMBUN (Page 5) (Full) 
January 18, 2007 
 
There were only two guest speakers at the Liberal Democratic Party's 
(LDP) annual convention yesterday. The speakers were the head of its 
coalition partner, a party that the LDP ask for election support, 
and the leader of a business organization, on which the party calls 
for political donations. Is this an indication of the LDP taking on 
an inward-looking attitude? If the LDP is giving preference to 
shoring up the Abe administration over sending a message outside the 
party, it will betray its image as a party of reform. 
 
At last year's convention, LDP lawmakers were basking in the 
aftermath of overwhelming victory in the House of Representatives 
election. LDP President Junichiro Koizumi and other party members 
seemed to be full of confidence. At yesterday's convention, the 
ruling LDP led by Shinzo Abe appeared to be on the defensive, 
probably because of the cabinet's unexpected slump in the polls. 
 
We wonder why the convention lacked any sense of tension or crisis, 
even though party members are aware of the public's cold scrutiny of 
its actions. The LDP may be satisfied with its present situation 
because the main opposition party Minshuto's (Democratic Party of 
Japan) support rate has also leveled off. If so, we feel we must 
give the LDP a warning. 
 
The guest speakers were New Komeito Chief Representative Akihiro Ota 
and Japan Business Federation Chairman Fujio Mitarai. In order for 
the LDP to play up its being an "open party," it used to be the 
practice to invite prominent figures as speakers from circles other 
than the business world and to encourage them to make candid 
statements. However, such a practice has been discontinued. 
 
If the party simply regarded the convention as an event to cheer on 
its members to fight in the upcoming unified local elections and the 
House of Councilors election, it has become an extremely 
inward-looking, apparently "arrogant" governing party in the eyes of 
those who are outside the party. 
 
LDP President Abe used the same speech that he delivered at the 
Japan National Press Club on Jan. 16, just shortening it at 
yesterday's convention. Some of the policy goals Abe stressed at the 
 
TOKYO 00000226  007 OF 010 
 
 
convention are seemed to be the framework for the policy speech he 
is expected to deliver at the upcoming regular session of the Diet, 
which convenes on Jan. 25. 
 
Regardless of the contents of his speeches, former Prime Minister 
Koizumi always seemed to know how to make his appeal to the public. 
Abe does not need to model himself after Koizumi, but he should at 
least make a substantive speech. 
 
Abe stressed in his speech yesterday: "We will fight the Upper House 
election fair and square. We will surely be able to win in it if we 
show the public the goals that we should aim at, while explaining 
our achievements." What he said, however, was just restating his 
party's logic. Unless he explains what "fair and square" means and 
what specific goals the LDP aims at, the public will hardly be able 
to understand him. 
 
If he wants to advocate a policy of placing priority on regional 
communities, he should show the public what his policy measures are. 
Otherwise, he won't be able to convince them. Though Abe becomes 
aggressive when he has to challenge various difficult issues, 
including his goal for a new constitution, this time, it seems he is 
whistling in the dark. 
 
Although this year's noisy convention did not differ from past ones, 
we are disturbed that the words that should have been used were 
watered down. 
 
The LDP should realize that as the ruling party, it has the power to 
revitalize or destroy party politics. 
 
(6) Editorial: Prime Minister Abe must aim for a beautiful 
administration first 
 
ASAHI (Page 3) (Full) 
January 18, 2007 
 
In the Liberal Democratic Party convention yesterday, Prime Minister 
Shinzo Abe vowed that in order to make Japan a beautiful country, he 
would boldly address challenges, no matter how difficult they are. 
 
But something not so beautiful has occurred under the nose of the 
prime minister. A series of incidents of inappropriate accounting of 
political funds involving Abe cabinet ministers has come to light. 
Without resolving them, making Japan a beautiful country is not 
possible. 
 
Following the resignation of Genichiro Sata as administrative reform 
minister late last year, a chain of office expense scandals 
involving lawmakers, such as Agriculture, Forestry and Fisheries 
Minister Toshikatsu Matsuoka and Education, Science and Technology 
Minister Bunmei Ibuki, has emerged. 
 
Allegations have also surfaced that Matsuoka and Upper House member 
Hirohide Uozumi used their offices in favor of some organizations 
that made political donations to them. A secretary to Lower House 
member Seishiro Eto has also reportedly collected a large amount of 
money in the name of subscription fees for a business journal. 
 
The Abe administration, which was launched just over 100 days ago, 
has been hit by one "politics and money" scandal after another, as 
if the old LDP has fully awakened. 
 
 
TOKYO 00000226  008 OF 010 
 
 
Abe appears unconcerned about those scandals. He held a press 
conference at the Japan National Press Club on Jan. 16 in which he 
only discussed the system, saying: "I am the head of the executive 
branch of government. The best modality for political funds must be 
discussed by lawmakers and political parties." Abe seems to be 
oblivious to the fact that the lawmakers who are responsible for the 
executive branch are the ones that committed the questionable 
conducts. 
 
There is another thing that is not beautiful. Cabinet ministers in 
question, all intent on rejecting the allegations, have yet to 
fulfill their accountability. 
 
Matsuoka said: "Expenses were reported in accordance with the 
Political Funds Control Law. I have fulfilled my accountability." He 
is totally devoid of the sincerity to concretely spell out his 
office expenses. 
 
The Political Funds Control Law prescribes that in view of the fact 
that political funds come from the public for the development of 
sound democratic politics, lawmakers shall clarify their incomes and 
expenditures. 
 
Those lawmakers suspected to have conducted inappropriate 
bookkeeping are obliged to offer clear explanations to the public. 
 
Abe is not facing up to lawmakers' questionable accounting practices 
and public distrust in politics that followed Sata's resignation. 
Such a stance seems to have encouraged an ugly trend to do anything 
as long as it does not violate the law. 
 
In the next ordinary Diet session that opens on Jan. 25, the LDP 
intends to discuss an Abe-initiated education-rebuilding program. 
The major opposition Minshuto (Democratic Party of Japan), on the 
other hand, plans to lock horns with the ruling coalition over 
correcting disparities. 
 
The two parties apparently want to focus on campaign issues with the 
Upper House election this summer in mind. They should, instead, 
focus on elucidating facts about the lawmakers' shady accounting 
practices. 
 
Minshuto must first offer a clear explanation on President Ichiro 
Ozawa's office expenses in excess of 400 million yen, as well. 
 
The current political fund system that is lax with expenditures is a 
problem. But there are things that must be done before discussing 
the system. 
 
(7) Scramble for natural resources - Part 9: Oil road runs in 
desert, given decreasing oil output in China 
 
YOMIURI (Page 9) (Excerpts) 
January 16, 2007 
 
An oil road runs in the Taklimakan Desert in northwest China, which 
used to be the Silk Road route. The China National Petroleum 
Corporation (CNPC) constructed the road, which connects key energy 
facilities. 
 
In the Taklimakan Desert, CNPC has so far discovered oil and gas 
fields that produced a total of 2.41 billion tons of oil. 
 
 
TOKYO 00000226  009 OF 010 
 
 
CNPC Tarim Oilfields Co. President Sun Longde said, "We will 
continue to explore 150 million tons of oil annually. I expect that 
here will become China's largest oilfield in the future." 
 
It had been known since ancient times that oil lies underground in 
the desert. But because of the severe climate there, with 
temperatures shooting up to 40 degrees in the summer and plunging to 
20 degrees below zero in the winter, the desert had been left 
untouched until the 1980s. 
 
In the early 1990s, China launched a project to develop the frontier 
desert, given decreasing domestic oil output. From the Daqing 
Oilfield, the nation's largest oilfield, 56 million tons of oil was 
produced at a peak period, but oil wells there are now running dry. 
 
Meanwhile, energy demand has been on the rise in China due to its 
economic growth, and the nation eventually turned into an 
oil-importing nation from an oil-exporting nation in 1993. 
 
In an international oil-investment conference held in Beijing in 
March 1994, in which foreign firms also participated, China 
announced plans to introduce foreign capital and technologies for 
its energy-development projects. China started developing oilfields 
in deserts and at the bottom of sea, which had been impossible. 
 
In March of the same year, the State Council of the People's 
Republic of China finalized guidelines on industrial policy 
stressing the necessity of rationally making use of natural 
resources overseas. In response, state-owned oil companies began 
struggling for overseas natural resources. 
 
The 10th five-year program adopted in 2001 specified as an overseas 
advancement strategy, "The nation will acquire more natural 
resources, which are lacking, from overseas by supporting companies' 
resource-exploitation operations overseas." As it stands, China gave 
top priority to acquiring overseas concessions. 
 
Recently, attention has been focused on an argument that global oil 
production might decrease after reaching its peak in several years. 
Keeping this in mind, a sense of alarm about China's forcible 
takeover bids for natural resources is growing in the international 
community. China, however, has its own argument. 
 
The Institute of World Economics and Politics acting president said: 
"Foreign-affiliated plants in China use many of the energy China 
imports. American consumers use one-fourth of oil and 40% of natural 
gas in the end." 
 
China, though, seems to have taken a strategy to secure overseas 
natural resources while preserving domestically produced resources. 
 
In China, coal accounts for about 70% of domestic energy needs, with 
almost all of the needs for coal met with domestic products. Last 
year, however, China began to step up efforts to secure even coal 
from overseas or by obtaining concession rights to oilfields 
overseas. 
 
In December, China started imports of coal by railroad from Russia. 
Datong Coal Mine Group Limited Liability Corp. won coal-exploitation 
rights in Turkey. In addition, a number of Chinese companies have 
declared bid for a project to develop Tavan Tolgoi Coal Mine, which 
is said to be the world's largest mine. 
 
 
TOKYO 00000226  010 OF 010 
 
 
In a speech in a meeting of the State Council of the People's 
Republic of China late last year, Vice Premier Zeng Peiyan said, 
"China should make efforts to resolve the shortage of natural 
resources. We should try to obtain natural resources by using 
foreign money reserves." 
 
China now possesses foreign reserves worth one trillion yen, or more 
than about 120 trillion yen, the largest amount than those of any 
other nations, topping Japan. If China continues to acquire natural 
resources with this huge amount of money, more and more natural 
resources in the world will be poured into China. 
 
SCHIEFFER