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RR RUEHFK RUEHGH RUEHKSO RUEHNH
DE RUEHKO #1946/01 1210729
ZNY CCCCC ZZH
R 010729Z MAY 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 3203
INFO RUEHBJ/AMEMBASSY BEIJING 6848
RUEHMO/AMEMBASSY MOSCOW 1636
RUEHFR/AMEMBASSY PARIS 5450
RUEHUL/AMEMBASSY SEOUL 2916
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RUEHGZ/AMCONSUL GUANGZHOU 1311
RUEHHK/AMCONSUL HONG KONG 6229
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RUEHOK/AMCONSUL OSAKA KOBE 4465
RUEHKSO/AMCONSUL SAPPORO 1835
RUEHGH/AMCONSUL SHANGHAI 0154
RUEHSH/AMCONSUL SHENYANG 0482
RUEATRS/TREASURY DEPT WASHDC
RUEHIN/AIT TAIPEI 6412
RUEHGV/USMISSION GENEVA 3060
RUEHBS/USEU BRUSSELS

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 001946 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS USTR 
TREASURY FOR EAST ASIA OFFICE - HAARSAGER, CUSHMAN, YANG, 
POGGI 
TREASURY ALSO FOR IA DOHNER 
PARIS FOR USOECD 
GENEVA ALSO FOR USTR 
 
E.O. 12958: DECL: 05/01/2027 
TAGS: ECON EFIN PREL PGOV JA CH
SUBJECT: METI OUTLINES ABE-WEN SUMMIT OUTCOMES 
 
 
Classified By: Joseph R. Donovan, Charge d'Affaires, a.i. 
Reason: 1.4 (b, d) 
 
¶1.  (C)  Summary:  The recent meeting between the 
Japanese Prime Minister and the Chinese Premier 
produced few tangible economic results, according to 
an official of Japan's Ministry of Economic, Trade, 
and Industry (METI).  Nevertheless, the summit meeting 
did signal political commitment for further, more 
substantive discussions, in which -- the official took 
pains to highlight -- METI would play a leading role. 
The METI official also communicated strong Japanese 
interest in the possible outcomes of the upcoming 
U.S.-China Strategic Economic Dialogue and noted that 
Japanese officials and politicians, recalling the 
fallout of Japan's own boom years of the 1970s and 
1980s, have actively been engaging the Chinese on ways 
to address the weaknesses in China's economy.  End 
summary. 
 
Abe-Wen Summit Light on Substance (But That's OK) 
--------------------------------------------- ---- 
 
¶2.  (C)  The April 11 meeting between Japanese Prime 
Minister Shinzo Abe and Chinese Premier Wen Jiabao 
yielded little in the way of substantive progress on 
economic issues, acknowledged METI Northeast Asia 
Division Deputy Director Masato Sasaki in a meeting 
with econoffs on April 24.  The main achievement, 
Sasaki stressed, was top-level blessing to proceed 
with additional discussions, a necessary condition for 
the Chinese. 
 
¶3.  (C)  In addition, although endorsement of the 
high-level economic dialogue to be led on the Japanese 
side by Foreign Minister Taro Aso and on the Chinese 
side by Vice Premier Zeng Peiyan was the crowning 
economic achievement of the Abe-Wen summit, other 
ministerial-level exchanges would remain the main 
channel of discussion between Tokyo and Beijing on 
important issues, Sasaki said.  Notably, energy issues 
would not be a major portion of the new high-level 
dialogue, but would continue to be discussed primarily 
in regular meetings between METI Minister Akira Amari 
and Ma Kai, the head of China's National Development 
and Reform Commission (NDRC).  Sasaki also provide a 
briefing paper in English with the highlights of the 
outcomes of the Abe-Wen meeting along with brief 
summaries of the meetings held by Minister Amari with 
other senior Chinese officials accompanying Wen, 
including NDRC Chairman Ma, Commerce Minister Bo 
Xilai, and Minister of China's Administration of 
Supervision, Inspection, and Quarantine Li Changjiang. 
 
¶4.  (C)  According to Sasaki, the Japanese were 
pleased with the economic content of the joint 
statement emerging from the Abe-Wen meeting, even 
though details were sparse.  He pointed to the item on 
intellectual property rights (IPR) in the joint 
statement, which calls on both sides to "strengthen 
dialogue and cooperation and make constant efforts to 
enhance management" of the IPR system and protections 
as an achievement for just having the Chinese 
acknowledge IPR protection as an important element in 
China's economic relations with Japan.  When asked 
whether the two leaders had discussed efforts to reach 
a successful conclusion to the Doha Round of 
negotiation in the World Trade Organization (WTO), 
Sasaki responded that the subject had not been raised. 
 
TOKYO 00001946  002 OF 003 
 
 
He added that while Japan might bring up the WTO 
negotiations with certain other countries -- 
Australia, Brazil, and India, for example -- they did 
not see China as relevant to the process, largely 
because China had tended to follow India's lead with 
respect to the Doha Round. 
 
High-level Dialogue 
------------------- 
 
¶5.  (C)  As for the timing of the first formal session 
of the high-level dialogue, Sasaki indicated that it 
could not be arranged before September and would 
probably not happen until late November or early 
December.  The timing of a return visit to China by 
Prime Minister Abe would affect these plans, he noted. 
In the meantime, the possible content of the high- 
level meeting would be discussed with the Chinese 
through diplomatic channels; no working groups or 
preparatory meetings are planned.  Nevertheless, 
Sasaki emphasized that the Japanese would be looking 
for "substance" when the high-level dialogue finally 
convened.  He observed, however, that while business 
groups like the Japan Business Federation (Keidanren) 
had urged the government to take steps to improve 
Japan-China relations, now that the improvement had 
been realized, there was no common business agenda. 
Different firms or industries had specific issues or 
complaints that they would like to have addressed with 
the Chinese without any major unifying themes. 
 
East China Sea 
-------------- 
 
¶6.  (C)  Sasaki said that the Japanese had raised the 
dispute over offshore oil and gas development in the 
East China Sea both in the Abe-Wen meeting and in the 
side meeting between Minister Amari and NDRC Chairman 
Ma.  Although the lack of tangible results on this 
issue had disappointed the Japanese, Sasaki indicated 
that the instruction by the two leaders to have a 
report prepared by both countries on "specific 
measures" related to joint development of the disputed 
area signaled limited progress.  He noted that an 
April 6 experts meeting on the East China Sea issue 
has produced no results but had been significant 
simply for having taken place at all. 
 
Interest in SED 
--------------- 
 
¶7.  (C)  Sasaki expressed great interest in the 
possible content and outcomes of the upcoming U.S.- 
China Strategic Economic Dialogue.  In particular, 
Japan was interested in the "signal from the SED to 
the markets."  According to Sasaki, the U.S. 
administration appeared to be under growing pressure 
to achieve a tangible outcome from the next session of 
the SED.  Nevertheless, current economic conditions in 
both China and the United States are "fragile" with 
serious structural issues needing to be addressed.  To 
do so properly would take time, he noted, but 
international market perceptions could change quite 
quickly. 
 
Learn from Japan (in the 1970s) 
------------------------------- 
 
¶8.  (C)  With respect to concerns vis-a-vis China, the 
 
TOKYO 00001946  003 OF 003 
 
 
Japanese were recounting their own experiences of 
industrial policy and economic management of the 1970s 
and 1980s, Sasaki noted.  Many of the same conditions 
that had existed in Japan at that time -- an 
excessively high savings rate, a weak financial sector 
(especially in industrial finance), and production 
overcapacity -- can be seen in China, Sasaki observed. 
The Chinese know this as well, he noted, and have 
discussed the Japanese experience in a number of 
different forums at all levels.  According to Sasaki, 
the Chinese had shown interest not just in the 
policies of the Japanese government related to these 
phenomena but also to the political strategies and 
responses of Japan's ruling Liberal Democratic Party 
(LDP) in that era -- specifically how Japan had 
reacted to foreign pressure and why.  LDP Secretary- 
General Hidenao Nakagawa had been particularly engaged 
with his Chinese interlocutors on this topic, Sasaki 
said. 
 
Comment 
------- 
 
¶9.  (C)  Interestingly, the April 24 meeting at METI 
occurred at the Ministry's behest.  Sasaki offered 
nothing on the content of the Abe-Wen summit that had 
not been available in the press but did look to 
emphasize the meetings METI Minister Amari held with 
various Chinese counterparts in order, we presume, to 
let the USG know that METI is a player in the China 
relationship, despite the fact that Foreign Minister 
Aso will lead the new high-level dialogue. 
DONOVAN