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RUCNDT/USMISSION USUN NEW YORK 7474

UNCLAS SECTION 01 OF 08 TOKYO 005598 
 
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 12/18/07 
 
 
Index: 
 
(1) Prime minister's statement accelerates mistrust: Government 
frantic about expressing apology in wake of sharp drop in public 
support ratings of cabinet (Tokyo Shimbun) 
 
(2) Prime minister faces storm of criticism due to his campaign 
pledge comment on pension records; Highly alarmed at plunging 
cabinet support rate, Fukuda apologizes for LDP fliers causing 
misunderstanding (Nikkei) 
 
(3) CO2 reduction indexes to be set according to type of business: 
Environment Ministry considering amending related law; Names of 
unscrupulous companies to be revealed (Asahi) 
 
(4) Materials manufacturers to mass-produce high-function materials 
in China (Nikkei) 
 
(5) TOP HEADLINES 
 
(6) EDITORIALS 
 
(7) Prime Minister's schedule, December 17 (Nikkei) 
 
ARTICLES: 
 
(1) Prime minister's statement accelerates mistrust: Government 
frantic about expressing apology in wake of sharp drop in public 
support ratings of cabinet 
 
TOKYO SHIMBUN (Page 2) (Full) 
December 18, 2007 
 
The issue of unidentified holders of 50 million public pension 
accounts caused by erroneous data input has once again hit the 
administration. The major cause is that the Fukuda government has 
for all practical purposes reneged on former Prime Minister Shinzo 
Abe's Upper House campaign pledge to totally settle the issue. Abe 
underscored his determination to identify the missing accounts to 
the very last person. Public support ratings of the cabinet have 
plummeted due to the attitude of the present government, which has 
continued to make excuses, saying, "This is not a case of a breach 
of a public pledge." Since Prime Minister Yasuo Fukuda's careless 
remark could be taken as defiance, it has incurred the public's 
anger. 
 
The government and the ruling parties are frantically making 
excuses, noting that  though it had pledged to complete the 
cross-checking of unattributed 50 million pension accounts by the 
end of March, it never said that it would identify the holders of 
all pension accounts. 
 
It is true that in the part on the cross-checking procedure, the 
agreement reached between the government and the ruling parties on 
July 5 simply mentions that it would be implemented by the March 
2008 target time. 
 
However, the Liberal Democratic Party's (LDP) during the Upper House 
election campaign actually took an approach that was largely 
different from the agreement. The flyer it prepared for the election 
includes the words "Identification of all pension accounts will be 
completed," which can be taken as identifying holders of all of 
 
TOKYO 00005598  002 OF 008 
 
 
unidentified 50 million pension accounts that have yet to be unified 
under basic pension numbers.  For that reason, Chief Cabinet 
Secretary's excuse that the "LDP simplified the matter for the 
 
SIPDIS 
election campaign" is seen as unacceptable. The government cannot 
avoid being labeled as having broken its commitment. 
 
It also has been extremely difficult to identify holders of about 
9.45 million pension holders among the 50 million accounts. "Paying 
benefits to the last holder," the major premise of the agreement 
between the government and the ruling camp, is beginning to fall 
apart.  The government came under fire as having violated its 
commitment in this regard, too, which consequently compounded 
mistrust in politics. 
 
In addition, as if further confirmation is needed, the prime 
minister made that statement, making the public mistrust complete. 
Commenting on the election pledge, the prime minister noted, "In the 
sense that the election pledge has caused misunderstanding, I feel 
the person who explained the matter is also responsible." The 
statement indicates his real feeling that why he should be forced to 
take the previous Age administration's responsibility. 
 
However, given the sharp slip in support ratings of his cabinet, the 
prime minister yesterday offered an apology: "It is true that there 
were words that could cause misunderstanding (in the election 
pledge). I must apologize for that." 
 
Machimura during a press conference also acknowledged a lack of 
explanations regarding the LDP's election pledge. He noted in a 
serious manner, "We must humbly listen to the voices of the public 
and respond to them properly." 
 
However, the domino effect of mistrust in politics is once again 
beginning to undermine the administration. 
 
(2) Prime minister faces storm of criticism due to his campaign 
pledge comment on pension records; Highly alarmed at plunging 
cabinet support rate, Fukuda apologizes for LDP fliers causing 
misunderstanding 
 
NIKKEI (Page 3) (Abridged slightly) 
December 18, 2007 
 
The Fukuda administration now finds itself facing a growing storm of 
criticism over its response to the issue of some 50 million 
unidentified public pension accounts that have yet to be integrated 
into basic policy numbers. During the July House of Councillors 
election campaign, the Liberal Democratic Party disseminated fliers 
saying that the government would complete integrating the 50 million 
accounts into basic policy numbers. Prime Minister Yasuo Fukuda 
apologized for the fliers "causing misunderstanding." To defuse 
criticism, the government intends to steadily implement its policy, 
announced on July 5. The government's response is drawing fire even 
from within the ruling parties. 
 
"I think it's because of the pension problem and the like. The 
government must take solid steps, while humbly lending an ear to the 
voices of the people." Chief Cabinet Secretary Nobutaka Machimura in 
a press conference yesterday admitted that the cabinet's plummeting 
support rate, as seen in Nikkei's latest opinion poll that showed a 
12-point plunge to 43 PERCENT  from the previous poll, was partly 
attributable to the government's inadequate response to the pension 
 
TOKYO 00005598  003 OF 008 
 
 
issue. 
 
Machimura also apologized, saying, "If the government's explanation 
misled people, we must apologize for the insufficient explanation." 
Prime Minister Fukuda, too, said to the press corps: "It was a fact 
that the LDP fliers contained a misleading expression, and I must 
apologize for it." 
 
The apology was simply for causing "misunderstanding" over the 
government's response to the pension issue. (Machimura and Fukuda) 
did not acknowledge that the government broke its public pledge. 
Machimura explicitly said: "Work has been proceeding (in line with 
the government policy, released on July 5). Nothing has been done 
out of the line of it." Machimura thus pointed to the government's 
posture of implementing its July policy, defining it as a de facto 
"public pledge." 
 
The government's July policy says that it will complete 
cross-checking the 50 million pension records by the end of March 
¶2008. It does not say, however, that the government will identify 
the holders of all the 50 million accounts. If that is also the 
Fukuda administration's public pledge, even if holders of some 
accounts are not identified through cross-checking, that would not 
constitute breaking the public pledge. 
 
But during the Upper House election campaign, then Prime Minister 
Shinzo Abe promised that the government would pay out pension 
benefits to the last person, going a step further than the 
government policy. About Abe's promise, Machimura explained: "The 50 
million accounts include those to whom the government was aware in 
the first place that it cannot (pay benefits)." It is a fact, 
however, that there is a gap in views with the public. To what 
extent the government can obtain public understanding remains is 
unknown. 
 
Even ruling party members are criticizing Prime Minister Fukuda who 
said about the slow-moving identification work, "Is it so serious as 
to be called breaking a promise to the public," and Machimura. 
 
LDP Secretary General Bunmei Ibuki in yesterday's executive meeting 
with the government said in a firm tone: "The pension issue is a 
matter of great concern to the public, and we must deal with it 
sincerely and carefully." New Komeito Diet Affairs Committee 
Chairman Yoshio Urushibara also complained to the press, saying: 
"Comments by the prime minister and other cabinet ministers seem to 
be out of line with the people's perspective." 
 
Checking pension records each holder's responsibility 
 
The Social Insurance Agency (SIA) began yesterday mailing documents 
on pension records to those who are believed to be the holders of 
unidentified pension accounts. The documents are designed to notify 
the policy holders of the existence of un-integrated pension 
records. Each holder is responsible to check the records to find if 
there are any flaws in them. In other words, resolving the problem 
of unidentified pension accounts is based on the responsibility of 
each policy holder. There is a long way go before restoring public 
trust in the national pension program. 
 
The SIA plans to send by the end of March 2008 documents on pension 
records to a total of 10 million people who are believed to be the 
holders of unidentified pension accounts. 
 
TOKYO 00005598  004 OF 008 
 
 
 
Those pensioners who received the documents and found that their 
pension benefits might increase must report to their respective SIA 
offices to verity their records. Those who are not receiving 
benefits must mark down any mistakes on the records and send them 
back to the SIA. 
 
All policy holders and pensioners other than the holders of 
unidentified accounts will receive records from the SIA by October 
next year. 
 
Whether this approach can completely settle the pension record 
problem remains to be seen. 
 
Of the 50 million accounts, the SIA has yet to identify the holders 
of 20 million accounts. The country's pension system has many 
problems such as unpaid pension premiums. Revamping the national 
pension system is expected to remain as a major political challenge 
in the years to come. 
 
(3) CO2 reduction indexes to be set according to type of business: 
Environment Ministry considering amending related law; Names of 
unscrupulous companies to be revealed 
 
ASAHI (Top Play) (Full) 
December 18, 2007 
 
The Environment Ministry is now considering amending the Law 
Concerning the Promotion of Measures to Cope with Global Warming as 
a drastic measure to cut greenhouse gas emissions, such as carbon 
dioxide (CO2).  The details of the draft bill were revealed 
yesterday. The draft notes that entities subject to the reporting of 
the amount of emissions would be increased and guidelines for 
reductions in emissions would be set, according to the type of 
business. The names of companies whose efforts are markedly poor 
would be revealed. The ministry will aim at presenting the bill to 
the regular Diet session next year. However, since the proposals 
would lead to strengthening regulations on corporate activities, 
business circles and the Ministry of Economy, Trade and Industry 
(METI) are expected to oppose the proposal. Coordination of views 
could bog down. 
 
Japan's emissions of greenhouse gasses in fiscal 2006 increased 6.4 
PERCENT  from the level of the base year of fiscal 1990, according 
to preliminary figures. As such, Japan finds it difficult to meet 
the target of cutting emissions of such gases by 6 PERCENT , 
compared with the 1990 level (average figure to be achieved between 
2008 and 2012) as mandated under the Kyoto Protocol. The amendment 
aims at strengthening measures targeting the services sector, such 
as offices, whose emissions of greenhouse gasses have shown a 
pronounced increase of 41.7 PERCENT , compared with the 1990 level. 
 
The present law obligates each business establishment, such as a 
factory whose size exceeds a certain set scale, to report the amount 
of its emissions. Under the draft, one entire company and franchises 
instead would be required to report such an amount. If the size of 
one entire company exceeds a certain set size, it would be able to 
report the amount of emissions covering all of its small-scale 
factories and branch offices or outlets in the case of convenience 
store chains. The Environment Ministry estimates that entities 
subject to the new regulation in the services sector would increase 
about 10 PERCENT  to about 50 PERCENT  from the present number. 
 
TOKYO 00005598  005 OF 008 
 
 
 
According to the guidelines, the environment minister would set 
indexes and measures, such as the amount of emissions allowed in 
certain set economic activities, to be observed by each industry 
sector. Businesses whose emissions of greenhouse gasses tend to 
increase at a pace higher than a set level would be obligated to 
observe the index.  Those that responded to the order extremely 
insufficiently would be advised to constrain emissions. If they fail 
to follow the recommendation, their names would be revealed. 
Business circles will likely express concern that such measures 
would lead to setting an emissions framework for each company. The 
ministry would also consider mandating equipping government offices 
and condominiums to be newly built, if their size exceeds a certain 
set scale, with power generation facilities using recyclable energy, 
such as solar light. 
 
A mechanism of acknowledging not only emission quotas (credit) 
obtained by implementing measures to cut greenhouse gas emissions 
overseas but also implementation of reductions in emissions by 
domestic small- and medium-size businesses as reductions attained 
would also be established. 
 
The guidelines would also set the responsibility of the people and 
employers in concrete terms. The people would be urged to choose 
goods that emit less greenhouse gasses. Employers would be asked to 
provide appropriate information, such as explanations on their 
products. 
 
(4) Materials manufacturers to mass-produce high-function materials 
in China 
 
NIKKEI (Top Play) (Full) 
December 17, 2007 
 
Basic materials manufacturers have decided to produce high-function 
materials in China. Mitsui Chemical Inc. and Mitsubishi Gas Chemical 
Co. will build plants in China for high-function resins used in 
automobiles and electronic appliances sometime between 2010 and 
¶2012. Asahi Glass Co. has already started mass-producing 
energy-saving glass. Materials that are superior in terms of 
strength and other performance are in high demand in the Chinese 
market for basic materials - the second largest after the United 
States'. Such companies have so far imported commodity-grade 
products from Japan. With Japanese companies' decision to start 
local production, their strategy toward China will enter a new 
phase. 
 
China's demand for petrochemicals accounts for 16 PERCENT  of global 
demand, second after the US. In 2006, Japanese chemical 
manufacturers shipped 16 PERCENT  of their domestic products to 
China, but much of them were commodity-grade products, such as 
polyethylene. The companies now aim to advance into the Chinese 
market with value-added and profitable high-functional products. 
 
Mitsubishi Gas Chemical plans to construct a polycarbonate (PC) 
plant in Shanghai in 2010 at a cost of 30 million yen. The plant 
will initially output 80,000 tons a year and supply products to 
local auto and electronic appliance plants. The company intends to 
increase the production volume to 200,000 tones in the future. 
Excellent in thermal resistance and transparency, PCs are used in 
such products as automotive lights, DVD substrates, and the bodies 
of electronic devices. The company, the world's third largest PC 
 
TOKYO 00005598  006 OF 008 
 
 
producer, aims to use its first plant in China to raise its market 
share. 
 
Mitsui Chemicals has decided to construct a plant for phenols - a 
basic material for PCs - in Shanghai, investing more than 30 billion 
yen. The plant will be on line in 2012 and will have an annual 
output capacity of 300,000 tons. The company has already plants for 
PC materials in Japan and Singapore, enjoying the second largest 
share in the global market. 
 
In China, the market for consumer goods with high quality and 
performance is expanding, reflecting an increase in the number of 
high income-earners. Accordingly, since demand for high-functional 
resins is also sharply increasing, the Chinese market is becoming 
more attractive for Japanese chemical manufacturers. 
 
On the strength of their technological prowess, Japanese companies 
have decided to build plants for high-function products in China, 
based on the anticipation that these investments will have few risks 
because of minimal competition with Chinese firms and expected 
steady demand. 
 
In other industries than chemicals, Asahi Glass Co. has started 
producing energy-saving glass at its plant in Dalian. By coating a 
specific metal film on glass, insulation effect will be increased, 
resulting in bringing down households' air conditioning and heating 
expenses. Its price is about three times higher than commodity-grade 
products, but given the expanding wealthy class and growing 
awareness among the public of the need to protect the environment, 
demand for the product is likely to boost. Among the leading 
Japanese glassmakers, Asahi Glass is the first company that has 
started production in China. 
 
Oji Paper Co. also plans to output high-class printing paper in 
Nantong in 2010 as the first paper manufacturer to invest in China. 
 
In China, demand for basic materials for automobiles and electronic 
appliances has skyrocketed over the past several years. Japanese 
materials manufacturers aim to tap the Chinese market for 
high-function materials ahead of American and European companies as 
part of efforts to strengthening their international 
competitiveness. 
 
(5) TOP HEADLINES 
 
Asahi: 
Environment Ministry drafts industry-specific yardsticks for curbing 
CO2 emissions 
 
Mainichi: 
Support rate for Fukuda Cabinet drops 13 points to 33 PERCENT 
 
Yomiuri: 
Former Vice-Defense Minister Moriya to be rearrested today 
 
Nikkei: 
METI eyes beefing up support for small businesses via credit 
guarantee association 
 
Sankei: 
Work in final stage to determine whether to approve school textbook 
publishers' requests for correcting references to Okinawa mass 
 
TOKYO 00005598  007 OF 008 
 
 
suicide 
 
Tokyo Shimbun: 
Record 6,130 residents file Atsugi base noise pollution lawsuit 
seeking 4.6 billon yen in compensation 
 
Akahata: 
JCP seeks revision of Worker Dispatch Law aimed at equal treatment 
to workers 
 
(6) EDITORIALS 
 
Asahi: 
(1) Fukuda administration: Honeymoon-like period is over 
(2) Correction of tax revenues: Ruling party proposal is missing the 
point 
 
Mainichi: 
(1) Sharp plunge in public support rating for Fukuda administration 
could indicate change in trend 
(2) Documents on pension records sent: Social Insurance Agency 
should not jump to a conclusion that this will settle the issue 
 
Yomiuri: 
(1) Sympathy budget: Confidence in Japan-US alliance has been 
maintained 
(2) Recycling home electronics: Remove malicious business to improve 
recovery rate appliances: 
 
Nikkei: 
(1) Confiscation of fiscal resources will undermine autonomy of 
health insurance association 
(2) Authorized possession of guns must not be left uncontrolled 
 
Sankei: 
(1) Prime minister's remarks: Consider again that they carry a 
special weight 
(2) Court decision on Mitsubishi Motors: Company should improve its 
proclivity of hiding inconvenient facts 
 
Tokyo Shimbun: 
(1) Documents on public pension records sent: We should make sure we 
notify if errors are found 
(2) Lawsuit on death by overwork: We call for revision of labor 
control 
 
Akahata: 
(1) Padded bills for weapons: Defense Ministry should correct its 
stance of giving in to military industry 
 
(7) Prime Minister's schedule, December 17 
 
NIKKEI (Page 2) (Full) 
December 18, 2007 
 
08:22 
Met at the Kantei with Environment Minister Kamoshita and Vice 
Environment Minister Tamura. 
 
08:41 
Attended a meeting of cabinet ministers responsible for a 
livelihood-protection project. Then, attended a meeting on reforming 
 
TOKYO 00005598  008 OF 008 
 
 
the Defense Ministry. Later, met State Minister for People's Life 
Kishida, with Vice Minister Uchida of the Cabinet Office. 
 
09:54 
Met Economic and Fiscal Policy Minister Ota and others. 
 
11:00 
Gives awards to the gold medalists in the Skill Olympics 
International Convention. 
 
12:16 
Arrived at his official residence. 
 
12:58 
Attended a funeral service for former Management and Coordination 
Agency Director General Takami Eto at the Aoyama Funeral Hall. 
 
14:55 
Met at the Kantei with Finance Minister Nukaga, Vice Finance 
Minister Tsuda, and others. Followed by Internal Affairs Minister 
Masuda and Decentralization Promotion Committee Chairman Uichiro 
Niwa. 
 
16:06 
Met National Police Agency Director General Yoshimura. Followed by 
Vice Foreign Minister Yachi. 
 
17:01 
Attended a party executive meeting in the Diet building. 
 
17:23 
Met Administrative Reform Minister Watanabe and Chief Cabinet 
Secretary Machimura at the Kantei. 
 
SIPDIS 
 
18:04 
Met Abu Dhabi Crown Prince Mohammed, with Nukaga and Economy, Trade 
and Industry Minister Amari. Then attended a ceremony to sign a 
joint statement. Later, hosted a dinner party for the crown prince. 
 
21:25 
Returned to his private residence in Nozawa. 
 
SCHIEFFER