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UNCLAS SECTION 01 OF 11 TOKYO 005425 
 
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 12//07 
 
 
Index: 
 
(1) Moriya scandal: Defense equipment procurement system to be 
revised to stick the knife into harmful effect of presence of 
trading house (Sankei) 
 
(2) Moriya falls into the darkness of interests-Possibly in the 
aftermath of scramble for U.S. military realignment projects (Tokyo 
Shimbun) 
 
(3) Spot interview with Masahi Nishihara: Arrest of Moriya may 
affect the Futenma relocation issue (Yomiuri) 
 
(4) Corruption in a sanctuary: Pursuit of military interests; 900 
firms flock to enormous Guam relocation project (Akahata) 
 
(5) In COP13 to open today, Japan to set out government proposals, 
including monitoring deforestation by satellite (Tokyo Shimbun) 
 
(6) Reform of independent administrative agencies in homestretch: 
Capability of prime minister, state minister in charge of 
administrative reform being questioned regarding whether they can 
fend off resistance from government agencies (Tokyo Shimbun) 
 
(7) TOP HEADLINES 
 
(8) EDITORIALS 
 
(Corrected copy) Japan-China economic dialogue: Cooperation for 
promoting protection of intellectual property rights; Joint paper 
includes cooperation on environment issues (Nikkei) 
 
ARTICLES: 
 
(1) Moriya scandal: Defense equipment procurement system to be 
revised to stick the knife into harmful effect of presence of 
trading house 
 
SANKEI (Page 3) (Excerpts) 
November 30, 2007 
 
Hiroyuki Kano 
 
Following the arrest on suspicion of taking bribes of former 
Administrative Vice Defense Minister Takemasa Moriya (63), who was 
lavishly entertained by a trading company specializing in military 
procurement, the government and the ruling parties have started 
looking into the possibility of taking a second look at a system of 
trading companies serving as an agent in procurement of defense 
equipment, such as aircraft and weapons -- a practice peculiar to 
Japan. The Defense Ministry is now looking into a new system that 
removes the presence of agents at the order of Defense Minister 
Shigeru Ishiba. The envisaged new system will be on the agenda of 
the first meeting of the Expert Council on Reform of the Defense 
Ministry to be held for the first time at the Prime Minister's 
Official Residence on Dec. 3. The Defense Ministry procured defense 
equipment worth about 2.1 trillion yen in fiscal 2006, of which 
equipment worth about 116 billion yen was imported. The usual 
practice is that when the Defense Ministry imports defense 
equipment, Japanese trading companies that have contracts with 
foreign manufacturers deliver ordered products to the ministry. 
According to the Defense Ministry, Britain, Germany and Australia in 
 
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SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
most cases directly import equipment from manufacturers. South Korea 
has a system similar to Japan's. However, domestic agents only serve 
as something like liaison offices in that country. 
 
By Naohisa Hanzawa 
 
Since the former Defense Agency, now the Defense Ministry, has never 
had experts with knowledge of business practices and command of the 
foreign languages needed for directly negotiating with foreign 
manufacturers, the system of using trading houses as agents has 
developed in Japan. As a result, it has been the job of trading 
companies to  collect information on the performance of equipment to 
be procured and the prices of such equipment. Such a system has 
created a breeding ground for various problems, including high costs 
and lavish entertainment of senior defense officials. 
 
Following the Moriya bribery incident, the Defense Ministry has 
started studying cases of other countries regarding the presence of 
trading companies in equipment procurement and considering nurturing 
personnel capable of negotiating with foreign manufacturers. One 
plan is to set up a procurement agency specializing equipment 
procurement as an extra-ministerial bureau. 
 
It is estimated that in order for the Defense Agency to procure 
equipment without the involvement trading companies, it would be 
necessary for it to increase the number of officials by several 
thousand. There is concern that such a proposal could incur 
criticism as going against the administrative reform drive. 
 
Concurrently with the government effort to reform the present 
defense equipment procurement system, the Liberal Democratic Party 
(LDP) and the Democratic Party of Japan (DPJ or Minshuto) yesterday 
held full-fledged internal discussions on procurement of imported 
defense equipment. Voices calling on the Defense Ministry to secure 
transparency in procuring imported equipment dominated a meeting of 
the LDP National Defense Division held on the morning of the same 
day. However, some opposed such a view, noting that it would be a 
problem to totally deny the role of trading companies. 
 
Moriya dominated the Defense Ministry as vice minister for a 
four-year period, which is unprecedentedly long.  It is true that 
the consolidation of the national emergency legislation and the 
upgrading of the defense agency to status of a ministry  would not 
have realized without the political clout and faculties of Moriya, 
who directly appealed to members of the national defense policy 
clique in the Diet and secretaries to the prime ministers. However, 
his dogmatic approaches characterized by, for example, promoting an 
official who made a pledge of allegiance, while firing a senior 
official who had been regarded as a potential successor, were 
visible during his long-term administration. 
 
Moriya's arbitrary administration was particularly pronounced in the 
talks on the realignment of U.S. forces stationed in Japan (USFJ), 
in which he fulfilled a role to weave through a course as the 
government pursued the talks. He appointed his right hands, who were 
not in charge of the issue, as chief members of the talks and 
controlled the course of the talks at will. One of such men was 
Nobuki Kawamura, former director of the Defense Policy Division, who 
was fired for managing Moriya's investment funds. The so-called Team 
Moriya turned a deaf ear to its partner Foreign Minister and caused 
friction with affected local governments. 
 
 
TOKYO 00005425  003 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
I could not believe my ears when I heard Moriya blast then Deputy 
Under Secretary of Defense Richard Lawless, who was the chief 
negotiator of the U.S. government at a semi-public meeting, "Mr. 
Lawless, you should not say something like that in your position." 
Moriya and Lawless were in a fierce confrontation over a location 
for constructing an alternative facility for the relocation of 
Futenma Air Station in Okinawa. Moriya autocratically piled abuse on 
Lawless, as he did not like the statement that official had made. 
 
The realignment talks became protracted due to circumstances in 
Japan. The fixed view among Japanese government officials was that 
the talks would have broken down without Mr. Lawless, since other 
officials knowledgeable about Japan were all gone. However, Moriya's 
attitude of slighting Lawless as if his status was lower than him as 
a negotiation partner made me feel that ideals of the realignment of 
the USFJ to promote the Japan-U.S. alliance had become empty. 
 
The U.S. government increasingly became distrustful of Moriya after 
many rounds of talks. That is because he leaked things that were 
under negotiations as something already agreed on, with the aim of 
making plans convenient to Japan into accomplished facts. 
 
Upset by Moriya's absolute control, one U.S. negotiator revealed his 
dissatisfaction to me: "Mr. Moriya does not keep to the rules, even 
to the minimum. I cannot believe these are talks with a U.S. ally." 
 
Insisting on the return of U.S. facilities located in the 
south-central part of Okinawa Prefecture, Moriya repeatedly leaked 
information about that. The U.S. government was nervous about rumors 
involving vested interests. A point has been made that Nihon Mirise, 
established by Motonobu Miyazaki, who gave bribes to Moriya, was 
trying to take part in a project to transfer of the U.S. Marine 
Corps in Okinawa to Guam. 
 
In view of the threats from North Korea, China and international 
terrorism, strengthening the two countries' capability to jointly 
deal with such through the realignment of the USFJ is a pressing 
issue. I can only hope that the realignment plan can free itself 
from the pattern of government administration swayed by vested 
interests. 
 
(2) Moriya falls into the darkness of interests-Possibly in the 
aftermath of scramble for U.S. military realignment projects 
 
TOKYO SHIMBUN (Page 24) (Full) 
November 29, 2007 
 
Former Administrative Vice Defense Minister Takemasa Moriya has now 
been arrested. His charge is bribe-taking over the Air Self-Defense 
Force's procurement of its follow-on cargo aircraft (CX). Moriya was 
even called the Defense Ministry's "emperor." There is a rumor going 
around that behind-the-scenes struggles over huge defense interests 
and internal power struggles sent him down to the bottomless pit. 
What lies in the darkness behind his downfall? 
 
Tateo Tamura, a journalist who often interviewed Moriya, presumes 
that he was made the scapegoat in the scramble for defense 
interests. 
 
"Since the Hashimoto cabinet, the government has poured a huge 
amount of money into Okinawa, based on rough estimates. There are 
some people who don't want their Okinawa stakes unveiled. Moriya has 
 
TOKYO 00005425  004 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
no decisive evidence (that would expose the core), so I guess they 
probably thought the (defense scandal) case would end up with 
charges of a contractor's treating Moriya to free golf. The 
government is now going to spend as much as 3 trillion yen on U.S. 
military realignment projects, and vested interests are engaged in a 
monumental tug of war over that initiative. It's conceivable that 
Moriya was involved in these struggles." 
 
According to Tamura, suspicions have long been rumored about Moriya. 
However, Moriya himself did not seem worried about the suspicions 
about his collusive ties with a Defense Ministry contractor, Tamura 
says. In October last year, however, Yamada Corporation, a 
defense-related trading company, instituted a lawsuit against Nihon 
Mirise Corporation (NMC), a trading firm established by a former 
managing director of Yamada Corp. After that, Moriya's face was 
clouded over. Around May this year, rumors again surfaced about 
Moriya. "He told me, 'I wonder if Mr. Kyuma (i.e., former Defense 
Minister Fumio Kyuma) might have spilt the beans," Tamura said. "I 
thought there was something unusual going on," he added. 
 
Moriya was later summoned to the Diet as a sworn witness. Before his 
Diet summons, he told Tamura in an interview, "There is someone else 
who is really bad in connection with defense interests." Tamura 
asked Moriya, "What do mean 'really bad'?" Moriya fell silent then, 
according to Tamura. 
 
"Now I can do nothing but to expect the Tokyo District Public 
Prosecutors Office to disclose the truth from what Moriya says." 
With this, Tamura is paying attention to what Moriya will say. 
 
"He (Moriya) couldn't read the Liberal Democratic Party's factional 
power politics." This analysis came from Motoaki Kamiura, a 
commentator on military affairs. 
 
Moriya worked out a plan to relocate Futenma airfield in Okinawa 
Prefecture to a site in waters off the cost of Camp Schwab. After 
the Iraq war, Moriya laid the groundwork for sending Ground 
Self-Defense Force troops to the southern Iraqi city of Samawah in 
order to assist with Iraq with its nation-rebuilding efforts. In a 
way, Moriya made contributions to the LDP-led government. On the 
other hand, he successfully got the LDP's approval for a plan to 
upgrade the Defense Ministry to full ministry status. He accumulated 
such results to consolidate his power. 
 
In August, there was an uproar over a political move to replace 
Moriya with another official. Moriya stuck to his post as 
administrative vice minister, and he insisted on installing his 
favorite official in the post of administrative vice minister. Many 
observers deem that Moriya intended to rule the Defense Ministry 
through his confidant even after retirement. He probably wanted to 
display his influence over a number of huge projects. The projects 
included the U.S. military's realignment in Japan which reportedly 
totals more than 3 trillion yen. Among other projects, the Defense 
Ministry is planning to lay down a network of missile defense (MD) 
shields to cover Japan against ballistic missiles. The Defense 
Ministry will also select a fighter support plane (FX) model for the 
ASDF. 
 
Kamiura said: "Within the LDP, the former Hashimoto faction (which 
is now the Tsushima faction) used to control defense interests and 
had deep ties to Moriya. But now, the Machimura faction is becoming 
more influential. Futenma relocation stagnated because Moriya 
 
TOKYO 00005425  005 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
himself had a big quarrel with the Okinawa governor. The LDP thought 
things would not go well under Moriya. And then, the LDP suffered a 
crushing defeat in the election for the House of Councillors. Things 
went against Moriya's expectations, and there was no one to protect 
him." 
 
This is the first half of a two-page report. 
 
(3) Spot interview with Masahi Nishihara: Arrest of Moriya may 
affect the Futenma relocation issue 
 
YOMIURI (Page 13) (Slightly abridged) 
November 29, 2007 
 
I am worried that the arrest of former Vice Defense Minister 
Takemasa Moriya may significantly affect the Japan-U.S. relationship 
on the security front. 
 
Moriya had played a leading part in going forward with the 
realignment of the U.S. Forces Japan (USFJ), including the 
relocation of the U.S. Marine Corps Futenma Air Station and the 
transfer of U.S. marines from Okinawa to Guam. My concern is that 
Moriya's arrest could delay the realignment process. No progress on 
the base issue involving Okinawa could lead to no progress on the 
transfer of the U.S. Marines. 
 
Hearing rumors that the construction of a base in Guam involves 
various vested interests, I fear that calls for changes to the 
transfer of Marines may grow stronger and that a delay may occur. 
 
The U.S. plans to complete its military transformation in 2014. 
Given this timeframe, Japan has no time to lose. The delay in the 
realignments of the USFJ the more the U.S. government's distrust of 
Japan would increase. Japan must firmly uphold the alliance with the 
US, but the arrest of Moriya could shatter the morale of the 
Ministry of Defense (MOD) and make it difficult to advance 
negotiations with the U.S. The MOD has increased its presence more 
than ever at present, but it would find itself at a disadvantage in 
terms of a struggle for leadership with the Ministry of Foreign 
Affairs (MOFA) in negotiations with the U.S. 
 
Moriya's arrest must have come as a shock even to the U.S. 
government, as well. Over the past few years, Japan has seen its 
alliance with the U.S. moving forward at a steady pace, presumably 
encouraged by the dispatch of the Self-Defense Forces (SDF) to the 
Indian Ocean and Iraq, but the fear at present is that the U.S. may 
lose its respect for the MOD. 
 
In the Diet, the pursuit of the bribery case involving Yamada Corp. 
is expected to gain steam. If lawmakers are wrapped up in pursuing 
the bribery case, I am worried that deliberations on a new 
antiterrorism special measures bill intended to resume the Maritime 
Self-Defense Force's refueling mission in the Indian Ocean would be 
further delayed and that the bill may have to be aborted. 
 
How to reform the current defense procurement system is another big 
challenge for Japan. For this kind of reform, a delay is likely to 
arise in equipment procurement from now on, for instance, a decision 
on an engine to be used for the Air Self-Defense Force's (ASDF) 
cargo aircraft-x (CX) and the selection of the next generation 
fighter. 
 
 
TOKYO 00005425  006 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
In order to meet this challenge, it is necessary to implement 
organizational reform as well as change the mentality of defense 
officials. 
 
In the past, too, there were cases of the breach of trust as well as 
corruption cases involving the MOD's predecessor Defense Agency's 
Central Procurement Office. There was also a bid-rigging case 
involving the Defense Facilities Administration Agency. As the 
defense industry is not a large market in Japan, the number of firms 
and trading houses doing businesses in the defense market is 
limited. In most cases, contracts are signed through negotiations. 
So, the Defense Agency tended to think overcharging would be 
unavoidable. Because a huge amount of money was involved in the 
contracts, interests and rights would have been easily created. 
 
In order to deal with that, I think one idea would be to strengthen 
the function of checking the procurement system from the outside. 
The MOD needs to have the capability to detect cases of overcharges. 
The MOD also needs to rethink and revamp the current procurement 
system under which trading houses are used. Raising a penalty may be 
one idea. 
 
In the U.S., too, there have been cases of corruption involving the 
defense industry. Resorting to each official's sense of morality 
would become necessary. And I think vocational training will be 
regarded as something more important. 
 
The government established a panel of experts headed by Chief 
Cabinet Secretary Machimura to promote reform of the MOD and is 
reviewing the current defense procurement system and the way of 
managing information. What kind of reform proposal will come out 
remains to be seen, but what is essential now is a sense of high 
morality and the strong will to defend the nation. 
 
 
Masashi Nishihara: Serves as president of the Research Institute for 
Peace and Security and formerly served as president of National 
Defense Academy; He is 70 years old. 
 
(4) Corruption in a sanctuary: Pursuit of military interests; 900 
firms flock to enormous Guam relocation project 
 
AKAHATA (Page 1) (Full) 
December 2, 2007 
 
A president of a consultant firm who was on friendly terms with 
former Administrative Vice-Defense Minister Takemasa Moriya noted: 
"Even after leaving Yamada Corp., Mr. (Motonobu) Miyazaki was 
confident about doing business by teaming up with Mr. Moriya. I 
believe the relocation of (U.S. Marines) to Guam was his first 
project." 
 
1.2 trillion yen 
 
The United States is reorganizing its forces around the world based 
on a preemptive strike strategy. The realignment of US forces in 
Japan is a part of that transformation. Among the plans, the 
relocation of U.S. Marines from Okinawa to Guam is a grand project 
costing 1.2 trillion yen in total. Japan is to contribute 710 
billion yen to build housing and cover other costs. 
 
The Ministry of Defense (MOD) on August 2 held a corporate briefing 
 
TOKYO 00005425  007 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
in Tokyo for the planned relocation of U.S. Marines from Okinawa to 
Guam. Briefings were also held in Osaka on August 27, as well as in 
Guam. The briefings by MOD, which usually does not hold such 
sessions, is ascribable to the large number of corporate inquiries. 
 
Here are the lists of companies that attended the briefings. They 
were presented by MOD in compliance with the request of Japanese 
Communist Party House of Representatives member Akira Kasai. 
 
A total of 910 Japanese and foreign firms took part in the three 
sessions, like flies flocking to honey: 269 in Tokyo, 78 in Osaka, 
and 563 in Guam. 
 
On the lists are such major defense firms as Mitsubishi Heavy 
Industries Ltd., Mitsubishi Electric Corp., and IHI, and trading 
houses such as Mitsubishi Corp. and Mitsui & Co. Ltd. The lists also 
include major contractors, like Taisei Corp. and Shimizu Corp., plus 
U.S. consulting firms, designing and steel companies, and financial 
institutions. 
 
A former Defense Facilities Administration Agency (DFAA) official, 
who has been working after retirement at a mid-level general 
contractor that took part in a briefing, noted: "The Guam relocation 
is a juicy project. Because there aren't enough projects in Japan, 
they are desperately trying to join the Guam project. The 
government-backed relocation project is appealing." 
 
Coordinator 
 
Such firms as Yamada Corp., for which Miyazaki served as a managing 
director, and Nihon Mirise Corp., which was established by Miyazaki 
after leaving Yamada, also attended the briefings. 
 
Nihon Mirise produced a set of plans that assumed its participation 
in the project. Included was an overall view of the USFJ realignment 
with a chart illustrating steps leading up to receiving orders. 
 
The Japanese agent falls under the umbrella of a U.S. firm that wins 
an order from the U.S. Department of Defense. Nihon Mirise, 
described as a "project planning company for research and 
selection," is listed under the Japanese agent. In other words, 
Nihon Mirise serves as the coordinator in Japan. 
 
The specific plans were crafted from December 2006 through January 
2007, more than six months before the MOD briefings. 
 
Nihon Mirise obtained information ahead of others and produced the 
upbeat business plans. Behind them, perhaps there was the influence 
of Moriya, who wielded enormous influence as administrative vice 
minister? 
 
The former DFAA official disgustingly said: "(Moriya) blasted the 
DFAA when the bid-rigging scandal involving the agency came to 
light. But what was he doing? In the world of procuring defense 
equipment, overturning a company already selected was referred to as 
the 'Othello game.' Procurement is so orderly that changing one 
contractor affects the entire picture. (Miyazaki) overthrew firms 
already selected. Such is not possible without close ties to 
higher-ups." 
 
(5) In COP13 to open today, Japan to set out government proposals, 
including monitoring deforestation by satellite 
 
TOKYO 00005425  008 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
 
TOKYO SHIMBUN (Page 1) (Full) 
December 3, 2007 
 
(Michio Yoshieda, Nusa Dua, Bali) 
 
The 13th session of the Conference of the Parties (COP13) to the 
United Nations Framework Convention on Climate Change will begin on 
Dec. 3 in Bali, Indonesia. The session will bring together 
representatives from more than 180 countries. They will attempt to 
jump-start negotiations on the design of a new international 
framework to fight global warming beyond the 2012 timeframe set 
under the 1997 Kyoto Protocol. 
 
In a meeting on Dec. 2 of the Umbrella Group - composed of the 
United States, Russia, and other industrialized countries - Japanese 
delegates explained the government's package of proposals designed 
to contain global warming. 
 
The package includes measures to set up a special working group to 
be joined by all major greenhouse gas emitters such as the US, 
China, and India; to help Bangladesh and small island states reduce 
gas emissions; and to create a system to monitor by satellite the 
state of tropical deforestation. 
 
In his press conference on the 2nd, Yvo de Boer, the general 
secretary of the UN Framework Convention on Climate Change, 
 
SIPDIS 
expressed his expectation for probing negotiations to be held on 
measures to contain global warming, saying: "The political answer 
has to come now to what the scientific community has proved." On the 
negotiations, expected to become stormy because of the conflicted 
interests of member countries, de Boer said: "The focus in the 
negotiations is whether the conference will be able to work out a 
mechanism that will involve all countries." 
 
The Kyoto Protocol requires industrialized countries to reduce 
greenhouse gas emissions but does not impose the requirement on such 
emerging countries as China and India. In addition, the US has yet 
to ratify it. 
 
The focus of attention in the COP13 is on whether these economic 
giants will be included in negotiations on forming a more effective 
framework. Participants in the COP13 plan to draw up a Bali roadmap 
for future negotiations and adopt a new protocol at the COP15 in 
¶2009. 
 
(6) Reform of independent administrative agencies in homestretch: 
Capability of prime minister, state minister in charge of 
administrative reform being questioned regarding whether they can 
fend off resistance from government agencies 
 
TOKYO SHIMBUN (Page 2) (Slightly abridged) 
December 2, 2007 
 
Efforts to reform independent administrative agencies have gone into 
the homestretch. State Minister for Administrative Reform Yoshimi 
Watanabe plans to separately hold talks with related cabinet 
ministers starting today with the aim of finalizing the specifics of 
a consolidation and rationalization plan, which the government will 
compile at year's end. With various government agencies opposing 
scrapping or privatizing independent administrative agencies under 
their jurisdiction, which offer post-retirement positions to 
 
TOKYO 00005425  009 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
bureaucrats, the leadership of  Prime Minister Yasuo Fukuda and 
Yoshimi Watanabe is now being questioned. 
 
Reform of independent administrative agencies is the best 
opportunity for the Fukuda administration, which has not yet 
attained any noticeable achievements since the inauguration in 
September, to produce results. The prime minister is actively 
playing up his desire to promote reform. 
 
During an informal cabinet meeting on Nov. 30, Fukuda ordered 
participants, "I want all cabinet ministers to display leadership 
and positively hold talks with the administrative reform minister." 
His statement was meant to check some cabinet ministers who are 
against reform of independent administrative agencies at the request 
of bureaucrats. 
 
Watanabe, who had often been isolated in political circles following 
the resignation of Prime Minister Shinzo Abe, the initiator of 
reform of independent administrative agencies, is getting a boost 
from the prime minister. He during a press conference on Nov. 30 
indicated confidence in negotiations with cabinet ministers, saying, 
"I want to have one-one-one talks with cabinet ministers without the 
presence of working-level officials." 
 
According to the government's Expert Council to Outsource or 
Heighten Efficiency of  Administrative Work, a panel that is mapping 
out a consolidation and rationalization plan, of 102 independent 
administrative agencies, 11 entities, including the Urban 
Renaissance Agency under the jurisdiction of the Land, 
Infrastructure and Transport Ministry, were discussed as targets for 
abolition or privatization, and 17 entities, including the National 
Consumer Affairs Center of Japan,  as targets for integration or 
transfers to other agencies or local regions. Talks between the 
administrative reform minister and relevant cabinet ministers will 
likely focus on how to handle those targeted entities. 
 
Even so, concerned government agencies' resistance is deep-rooted. 
At present, only two independent administrative agencies -- Japan 
Green Resources Agency under the jurisdiction of the Ministry of 
Agriculture, Forestry and Fisheries and Nippon Automated Cargo 
Clearance System Operations Organization under the Finance 
Ministry's jurisdiction -- have been proposed as candidates for 
abolition or privatization. Behind the deep-rooted opposition by 
government agencies are their real feelings that they do not want to 
lose independent administrative agencies, important entities that 
offer post-retirement positions to national government employees. 
 
In addition, many Liberal Democratic Party (LDP) members are 
secretly active to torpedo the reform drive, urged by government 
 
SIPDIS 
agencies. One official involved in the LDP Administrative Reform 
Promotion Headquarters revealed, "A person who served as prime 
minister worked on us to oppose the integration of a certain 
independent administrative agency." 
 
Watanabe underscored, "My basic approach is to settle issues through 
talks with cabinet ministers." However, there may be cases in which 
the prime minister makes decisions, depending on how strongly 
government agencies are opposed. 
 
(7) TOP HEADLINES 
 
Asahi: 
 
TOKYO 00005425  010 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
Special prosecutors' squad questioning as witnesses senior Defense 
Ministry officials on realignment of U.S. forces in Okinawa 
 
Mainichi: 
520 locations across the country added as places for asbestos 
contamination by the asbestos patients support group 
 
Yomiuri: 
Ebara Corp. found to have illegally provided 300 million yen to its 
agent, which was in charge of maneuvering for winning public works 
orders from local governments, to help the agent to pay a penalty 
tax 
 
Nikkei: 
Nippon Steel Corp., Sumitomo Metals, Kobe Steel Group to increase 
their respective production capacity by7 PERCENT  by 2012 
 
Sankei: 
Discounting battle for airfares likely to escalate with FTC's move 
to make an international airfare price cartel subject to the 
Antimonopoly Law 
 
Tokyo Shimbun: 
Former Yamada Corp. executive found to have sent 6 million yen 
separately to former vice defense minister's wife, but the money was 
returned immediately 
 
Akahata: 
13,000 persons participating in a Tokyo metropolitan rally in Zama 
City said no to a war command center and no to U.S. military 
realignment 
 
(8) EDITORIALS 
 
Asahi: 
(1) Proposals for society filled with hope: Two key elements -- 
maintaining the current level of welfare services and making 
desperate efforts to reduce annual expenditures 
 
Mainichi: 
(1) Revision to medical treatment fees: Drastic action necessary to 
resolve shortage of medical doctors 
(2) Enactment of two labor-related laws must be used to improve 
treatment to workers 
 
Yomiuri: 
(1) Responsibility of consumer credit firms should be made clear in 
revising the installment sales law 
(2) Need for expansion of cooperation with other countries for 
protection of cultural assets 
 
Nikkei: 
(1) Japan-China dialogue dealt with the appreciation of the yuan and 
the joint development of gas fields 
(2) Digital television broadcasting can make TV programs even more 
variegated 
 
Sankei: 
(1) Politics and money: Agreed bill must be passed into law 
(2) Variety of living creatures will be lost if no action is taken 
against climate change 
 
 
TOKYO 00005425  011 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 12//07 
 
Tokyo Shimbun: 
(1) Report on survey of hepatitis C patients lacks patients' 
viewpoint 
(2) Cabinet members slow to act to push decentralization 
 
Akahata: 
(1) Japan-sponsored resolution against nuclear arms lacks measures 
to realize an elimination of those arms 
 
(Corrected copy) Japan-China economic dialogue: Cooperation for 
promoting protection of intellectual property rights; Joint paper 
includes cooperation on environment issues 
 
NIHON KEIZAI (Top Play) (Excerpts) 
December 2, 2007 
 
The governments of Japan and China on Dec. 1 held their first 
session of the Japan-China high-level economic dialogue for economic 
ministers of both countries to meet and discuss such issues as trade 
and investment in a comprehensive manner. Both countries confirmed 
the policy of establishing strategic mutual-beneficial relations on 
the economic front. Participants agreed on cooperation on 
environmental issues and energy-conserving technologies as well as 
food safety. They also decided to set up a new framework to share 
information on protection of intellectual property rights and 
finalized a joint document. Regarding the agricultural sector, an 
agreement was also reached that Japan export another 150 tons of 
rice to China. 
 
Major agreements: Japan to exports more rice to China 
 
? Promote Japan-China strategic mutual-beneficial relations. The 
economic dialogue is to be continued. 
? The Chinese side is aware that it is worth learning lessons from 
Japan's bubble economy caused by excessive fluidity. Japan expects 
China to make efforts to raise the value of the yuan more quickly. 
? Strengthen technical cooperation in the environmental and 
energy-conservation areas. 
? Continue cooperation in the food safety area. 
? Exports of another 150 tons of Japanese-grown to China 
? Expedite talks on development of gas fields in the East China Sea 
in the run-up to Prime Minister Fukuda's China visit. 
 
SCHIEFFER