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UNCLAS SECTION 01 OF 08 TOKYO 000345 
 
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 02/08/08 
 
 
INDEX: 
 
(1) Steelmakers to offer energy-conservation technology to China and 
India, aiming to acquire emissions credits (Nikkei) 
 
(2) Moving out to sea also in mind: Machimura (Okinawa Times) 
 
(3) Verbal battle over gasoline tax: "Factories follow roads," say 
government, ruling camp; DPJ's Okada presses Fukuda to admit setback 
from Koizumi reform drive (Tokyo Shimbun) 
 
(4) DPJ holding series of debates and symposia to enlist public 
support for abolishing provisional tax rates (Tokyo Shimbun) 
 
(5) Trying to determine other party's stance toward promotion of 
Muto to BOJ governor: First ruling-opposition talks held on 
selection of BOJ governor (Nikkei) 
 
(6) Obama City supports U.S. presidential candidate Obama? (Tokyo 
Shimbun) 
 
There will be no Daily Summary on Monday, February 11 - a Japanese 
holiday. 
 
ARTICLES: 
 
(1) Steelmakers to offer energy-conservation technology to China and 
India, aiming to acquire emissions credits 
 
NIKKEI (Top Play) (Full) 
February 8, 2008 
 
Japanese steelmakers, such as Nippon Steel Corp. and JFE Holdings 
Inc., have decided to team up with the Ministry of Economy, Trade 
and Industry (METI) to help China and India introduce 
energy-conservation technology in their steel mills. The Japanese 
side will start installing such technology at steel mills in China 
and India after dispatching engineers to survey the situation. The 
companies aim to obtain emissions credits in exchange for 
contributing to reducing greenhouse gas emissions in developing 
countries, based on the Clean Development Mechanism (CDM) provided 
for in the Kyoto Protocol. Through the cooperation project, the 
government will urge China and India to positively participate in a 
post-Kyoto mechanism to fight global warming beyond the 2012 
timeframe set under the protocol. 
 
Participating in the cooperation project will also be Kobe Steel, 
Sumitomo Metal Industries, and the Iron and Steel Federation. Japan 
recently dispatched engineers to such Chinese steelmakers as Jinan 
Iron & Steel Group Corp. in Shandong Province, Taiyuan Iron & Steel 
in Shanxi Province, and Jiangyin Xingcheng Special Steel Works Co. 
Engineers in Jiangsu Province. For India, Japan will send engineers 
first to the Steel Authority of India Ltd. (SAIL), and then to five 
steel mills in fiscal 2008, including the Tata Group. 
 
The engineers will produce in March a report analyzing the 
possibility of introducing specific energy-saving technology in the 
three Chinese steel mills and in SAIL in India. Based on the report, 
the Japanese side will launch negotiations next fiscal year with the 
governments and steelmakers of China and India to translate the 
project into action. Cited as specific energy-saving facilities are 
coke dry quenching (CDQ) facilities designed to generate electricity 
 
TOKYO 00000345  002 OF 008 
 
 
using steam, and equipment to recover and recycle flammable gas from 
blast and coke furnaces into fuel. 
 
Many companies in industrialized countries, including Japan, have 
proactively used the CDM designed to allow industrialized countries 
to earn emissions credits in return for offering financial and 
technical cooperation to developing countries like China. But such 
projects are mainly to recover or destroy chlorofluorocarbon gas, so 
no progress has been made in energy efficiency at steelmakers. 
 
The joint project by the government and the public sector will make 
use of several hundred million yen in subsidies from the New Energy 
and Industrial Technology Development Organization (NEDO). By 
reducing CO2 emissions through their technical cooperation, 
steelmakers will acquire emissions credits. With government 
subsidies as a pump-priming mechanism, METI hopes to promote energy 
conservation to reduce greenhouse gas emissions in Asia. 
 
Crude steel output in China has been sharply increasing in recent 
years. China produced about 490 million tons in 2007, more than 
one-third of the world's total. According to METI, China uses up to 
20% more energy than Japan if both produce the same amount of steel. 
Steelmakers in China reportedly generate over 1 billion tons of CO2 
annually. If Japan's technology is used, emissions would be reduced 
by 160 million tons a year. Crude steel in India is also 
significantly growing. It is now ranking 5th in the world, and is 
expected to double to the Japanese level by 2012. Naturally, CO2 
emissions in India will certainly increase. 
 
The issue of how to fight global warming will be high on the agenda 
for the upcoming G-8 summit in July. As part of global measures to 
contain emissions, Japan has proposed setting nation-specific 
targets for reducing emissions after collecting and aggregating 
emissions data for different industries. 
 
According to the international Iron and Steel Institute (IISI), 
emissions from the steel industry account for nearly 10% of the 
world's total. Under the collecting-and-aggregating method, the 
steel industry will top the list of industries. Given this, Japan 
has decided to help China and India construct energy-efficient 
plants. 
 
(2) Moving out to sea also in mind: Machimura 
 
OKINAWA TIMES (Page 1) (Full) 
February 8, 2008 
 
TOKYO-The government held a sixth consultative meeting yesterday 
evening at the prime minister's office with authorities from Okinawa 
Prefecture and its municipalities to discuss the issue of relocating 
the U.S. Marine Corps' Futenma Air Station in Ginowan, Okinawa 
Prefecture, to a coastal area of Camp Schwab in the prefecture's 
northern coastal city of Nago. Concerning Futenma relocation, 
Okinawa Prefecture and its base-hosting localities have been calling 
on the government to move the planned alternative facility out to 
the sea. "We're now going through the procedures for an assessment 
of the Futenma alternative's potential impact on the environment," 
Machimura said. "In that process," he added, "we will give thought 
to the local request to move it out to the sea, and we will also 
discuss problems about the construction project as well." This is 
the first time for the government in its consultative meeting with 
Okinawa to clarify its intention of discussing the proposal to move 
 
TOKYO 00000345  003 OF 008 
 
 
the construction site out to the sea. Concerning when to hold the 
next consultative meeting, Machimura said it would be "around the 
end of the current fiscal year." With this, he indicated that the 
next meeting would be around April. 
 
In addition, Machimura stressed, "We'll have to make our utmost 
efforts to reach a settlement at the earliest possible time." With 
this, the top government spokesman indicated that the government 
would try to resolve the Futenma issue at an early date by moving 
the relocation site out to the sea. 
 
After the consultative meeting, Gov. Hirokazu Nakaima from Okinawa 
Prefecture met the press. In his press remarks, Nakaima welcomed 
Machimura's response. "I think the government is now beginning to 
consider this matter (offshore relocation) in its own way," he said, 
adding, "I'm also expecting the government to make a decision in 
response to the chief cabinet secretary's remarks." With this, the 
governor expresses his expectations. 
 
Meanwhile, Nakaima has released his statement on the government's 
procedural plan, which was submitted by the Defense Ministry's 
Okinawa Defense Bureau, to assess the newly planned facility's 
potential impact on its environs. In response, the government 
presented a revised plan to Okinawa Prefecture. "We appreciate the 
Defense Ministry's quick response," Nakaima said. The question is 
whether the governor will give the go-ahead for the environmental 
impact assessment. "Based on the government's response to my 
statement," Nakaima said, "I will make an appropriate judgment under 
the law." In the press conference after the consultative meeting, 
however, the governor showed his stance of responding in a positive 
manner. "We will go ahead if we can clear up what our screening 
board can consider," he said. 
 
(3) Verbal battle over gasoline tax: "Factories follow roads," say 
government, ruling camp; DPJ's Okada presses Fukuda to admit setback 
from Koizumi reform drive 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
February 8, 2008 
 
The ruling and opposition camps sparred over the maintenance of the 
provisional gasoline tax rate in the House of Representatives Budget 
Committee session that started yesterday. The government and ruling 
parties protracted the question-and-answer session apparently in an 
effort to maintain the road-related tax revenues. Democratic Party 
of Japan Vice President Katsuya Okada clashed with the ruling 
coalition by shedding light on the rearguard nature of the ruling 
camp. 
 
In yesterday's session, seven lawmakers took the floor as 
questioners. Six of them were from the ruling camp. 
 
LDP Policy Research Council Chairman Sadakazu Tanigaki, using a 
national expressway and highway map in which the completed roads 
were marked in blue and those yet to be constructed in red, 
explained: "Without the reds, (the Japanese archipelago) remains 
disintegrated. The roads must be connected to each other." 
 
Tanigaki was immediately followed by Land, Infrastructure, and 
Transport Minister Tetsuzo Fuyushiba, who discussed in detail the 
significance of road projects, citing the planned roads one by one 
for over eight minutes. "Once roads are built, factories will 
 
TOKYO 00000345  004 OF 008 
 
 
definitely follow," Fuyushiba declared from the viewpoint of 
revitalizing local economies. 
 
New Komeito Policy Research Council Chairman Tetsuo Saito also 
stressed: "It is too simplistic to assert that the government builds 
unnecessary roads with road-related tax revenues." 
 
Kosuke Ito from Tokyo fanned a sense of crisis, stating: 
"Road-related revenues are vital in Tokyo, as well. If (the 
road-related budgets) fail to clear the current Diet session, (the 
completion of) the metropolitan beltway project (connecting Tokyo 
suburbs) will be delayed by 20 years." 
 
"You should admit that you have backed away from the statement made 
by former Prime Minister (Junichiro Koizumi)." 
 
Okada, who took the floor as the last questioner, criticized the 
stances of Prime Minister Yasuo Fukuda and the ruling parties by 
citing former Prime Minister Koizumi, who had aimed at using 
road-related tax revenues for general purposes. 
 
Fukuda contended that the government has not backed away, explaining 
the government's policy to incorporate the tax revenues in excess of 
the road-construction budget into the general account. 
 
Koizumi had categorically said that the road projects in excess of 
the already included in the 9,342 km expressway plan were a "blank 
slate." The government, however, has produced a midterm road program 
that includes plans to build 14,000 km of roads over the next ten 
years. Okada asked Fukuda, "Who made that decision?" 
 
In response, Fukuda said: "Some projects might not be implemented." 
Okada further raised a question, saying: "This also means that every 
single person in this country has to contribute 500,000 yen to the 
road projects over the next 10 years. I wonder if the public will 
support it." Fiercer debate is expected in today's session, for all 
interpellators will be from the opposition camp. 
 
(4) DPJ holding series of debates and symposia to enlist public 
support for abolishing provisional tax rates 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
February 8, 2008 
 
The Democratic Party of Japan (DPJ or Minshuto) has held a series of 
debate sessions and symposia outside of the Diet with the aim of 
playing up the need to incorporate road-related tax revenues into 
general revenues and to abolish the gasoline tax. The party intends 
get the public on its side in a bid to have the upper hand over the 
government and ruling parties in Diet debates. 
 
The DPJ held last night in Tokyo a symposium titled "Should the 
provisional tax rates be lowered or maintained?" Many party 
executives voiced their views in the session. Deputy President Naoto 
Kan, for instance, said: "(The subject of) road-related tax revenues 
provides a good opportunity to fundamentally question the 
transparency of taxes." Secretary General Yukio Hatoyama noted: "We 
cannot budge even an inch regarding the question of using 
road-related tax revenue for general purposes and abolishing the 
provisional tax rates. Enlisting public support is most important." 
Meanwhile, Lower House member Akio Fukuda attended a National Youth 
Mayors Association workshop yesterday, in which he sought the 
 
TOKYO 00000345  005 OF 008 
 
 
mayors' understanding, describing the reform of road-related tax 
revenues as the cornerstone of all reforms. 
 
Kan is scheduled to attend a pep rally to be held today by six local 
organizations. He will also hold an open panel discussion on Feb. 19 
by inviting such individuals as Miyagi Governor Hideo 
Higashikokubaru and Fukuoka Governor and National Governors' 
Association head Wataru Aso. A group of junior DPJ lawmakers is also 
on a national tour to disseminate the party's idea of lowering the 
gasoline price. National Movement Committee Chairman Sakihito Ozawa 
said: "We would like to stir public opinion in tandem with heated 
Diet deliberations." 
 
Although incorporating road-related revenues into general revenues 
and abolishing the provisional tax rates will lower the gasoline 
price, there is concern centering on local districts that they might 
delay necessary road projects as well. The DPJ is urged to quickly 
disseminate its assertion properly. 
 
(5) Trying to determine other party's stance toward promotion of 
Muto to BOJ governor: First ruling-opposition talks held on 
selection of BOJ governor 
 
NIKKEI (Page 3) (Excerpts) 
February 8, 2008 
 
The official channel between the Liberal Democratic Party (LDP) and 
the Democratic Party of Japan (DPJ) has gotten underway for 
discussions on the selection of a successor to Bank of Japan (BOJ) 
Governor Toshihiko Fukui, whose term expires on Mar. 19. They first 
talked about steps to secure Diet approval. Coordination of views on 
the promotion of Deputy BOJ Governor Toshiro Muto, a former vice 
finance minister who is the favorite of the government and the 
ruling camp, is expected to gradually move into full swing. While 
Prime Minister Yasuo Fukuda and DPJ President Ichiro Ozawa remain 
silent, the bargaining over the issue is taking on a complex note. 
 
It has thus far been believed that there are several channels for 
talks on the selection of a new BOJ governor between the government 
and the DPJ. LDP Diet Policy Committee Chairman Tadamori Oshima and 
DPJ Diet Affairs Committee Chairman Kenji Yamamoto on the afternoon 
of Feb. 7 took the first official action. Oshima visited Yamaoka's 
office in the Diet building. They talked for about 30 minutes on 
their own. 
 
Oshima said, "I would like to deal with this issue in a cautious and 
considerate manner," He then sought Yamaoka's view not on who should 
replace Fukui but how his successor should be decided. Handing over 
a piece of paper to Oshima, Yamaoka replied, "Why don't we 
informally hear the policies of candidates at the House Steering 
Committee?" The paper was an agreement signed in February 2004 by 
the Diet Affairs Committee chairmen of the LDP, the DPJ and the New 
Komeito. 
 
The agreement paper noted that when the government proposes a 
personnel appointment plan, such as the appointment of a BOJ 
governor, it is required to informally listen to the views of 
candidates. 
 
The agreement mentions that candidates should be called into the 
board meeting of the Diet Affairs Committees of the Lower and Upper 
Houses. However, Yamaoka proposed that they should be called into 
 
TOKYO 00000345  006 OF 008 
 
 
the committee attended by more participants. Oshima brought the 
agreement back to the LDP, saying, "We will reply after vetting the 
contents." One LDP senior official said that the agreement reached 
by the three parties  "carries weight." 
 
As such, possible procedures might be: (1) the government makes an 
assignment proposal to the joint council of representatives of the 
House Steering Committee of both the Lower and Upper Houses; (2) the 
House Steering Committee listens to the stances of candidates; (3) 
each party chooses one person from among the candidates, based on 
intra-party procedures; and (4) they hold a vote at the plenary 
sessions of the Lower and Upper Houses. 
 
Both Oshima and Yamaoka said that no specific names have been given. 
However, one senior opposition party member, who is cautious about 
the promotion of Muto, a former, suspected, "This may be a maneuver 
toward approving Muto as governor." The DPJ opposed the appointment 
of Muto as deputy governor in 2003, as well. One reason for its 
opposition was that the summoning of Muto to the Diet was not 
realized. The hearing of his policy as proposed this time can be 
taken as a maneuver to play up the idea that transparent procedures 
have been secured, while containing those opposing his appointment. 
 
Chief Cabinet Secretary Nobutaka Machimura on Feb. 7 stated that 
only one person would be recommended, backing up the view that final 
coordination would be undertaken to recommend Muto. Both Oshima and 
Yamaoka are in agreement on the perception that the government will 
recommend only one person. That is because if the LDP and the DPJ 
fail to recommend the same candidate after hearing the views of 
candidates, the candidates would lose face. 
 
Prime minister, Ozawa remain silent: DPJ members advocating notion 
of separation of fiscal and monetary administration in agreement 
with anti-Ozawa forces 
 
The meeting of Diet Affairs Committee chairmen held on Feb. 7 
surfaced suddenly. Only a few government and ruling part officials 
had been informed of a plan to hold such a meeting. 
 
The DPJ's internal procedures are that upon receiving a government 
proposal, it will discuss the matter at its subcommittee tasked with 
considering personnel appointments requiring Diet approval and reach 
a final decision at its executive meeting (Diet executive liaison). 
 
Those in favor of the notion of separation of fiscal and monetary 
administration dominate this panel. One member asked, "Is it all 
right for Mr. Muto, a former Finance Ministry official, to serve in 
the top post of the BOJ, which steers the nation's monetary policy?" 
Some are also resentful of the DPJ leadership trying to create 
momentum to leave the matter to Ozawa at an early stage, believing 
that he should make a final decision. 
 
What makes the matter complex is that those who are cautious about 
the idea of promoting Muto are in agreement with influential members 
who keep their distance from Ozawa, such as Subcommittee Chairman 
Yoshito Sengoku. These people are also squaring off against the LDP. 
They are distrustful of Ozawa, who once secretly tried to explore 
ways to realize a grand coalition along with the prime minister. 
Deputy President Katsuya Okada, who advocates separation of fiscal 
and monetary administration, yesterday hinted at his cautious stance 
toward the promotion of Muto, noting, "There is no change in my 
stance toward this issue." 
 
TOKYO 00000345  007 OF 008 
 
 
 
Many informed sources believe that a battle between Ozawa and 
anti-Ozawa forces has started. If anti-Ozawa forces in the DPJ join 
hands with the Japanese Communist Party, the Social Democratic Party 
and the People's New Party in opposition to the promotion of Muto, 
the situation would become uncontrollable. Such misgivings have 
gradually emerged in the government and the ruling camp. 
 
The prime minister and Ozawa remain silent probably because they 
want to determine the moves among DPJ members. LDP Secretary General 
Bunmei Ibuki visited the Kantei yesterday evening. He told the prime 
minister, "The Diet Affairs Committee chairmen will be busy for some 
time to come. I would like you to take a wait-and-see attitude." 
However, when reporters asked Fukuda, "Did you discuss the selection 
of a new BOJ governor with the secretary general?" he simply 
replied, "No, not at all." 
 
(6) Obama City supports U.S. presidential candidate Obama? 
 
TOKYO SHIMBUN (Page 26) (Slightly abridged) 
February 7, 2008 
 
Those involved in the tourist business in Obama City, Fukui 
Prefecture probably paid more attention to the Super Tuesday primary 
races in the U.S. presidential election campaign than did Prime 
Minister Yasuo Fukuda and Democratic Party of Japan (DPJ or 
Minshuto) President Ichiro Ozawa. It is true that when we input the 
word "Obamashi" for Obama City in Japanese on the computer's search 
engine, we also come up with the word "Obama-shi" for Mr. Obama. 
Even though the tourist agents know this is a poor joke, they are 
giving their vocal support enthusiastically to Democratic 
presidential candidate Barack Obama. They even hope that someday a 
Japan-U.S. summit meeting might be held in their city, Obama. 
 
Obama, an old historical city, has a population of 32,000. Facing 
Wakasa Bay, Obama was once a gateway for continental Asian culture. 
The city has provided fish and other seafood to Kyoto and Nara since 
the Nara Period. The popular television drama series on NHK, 
"Chiritotechin," takes place in Obama. The head of the international 
exchange program in the city said on the phone: "We are aiming at a 
multiplier effect from our city's public relations about the TV 
drama and Mr. Obama." 
 
Appearing on a television program last December, Senator Obama said: 
"When I visited Japan, a customs official told me, 'I'm from Obama 
City in Fukui Prefecture.' I feel like I have an affinity with that 
city." Watching this scene on TV, Shoryu Tamagawa, 44, the priest of 
Haga Temple, sent an e-mail to Mayor Toshio Murakami. His message 
was: "Mr. Obama carried out public relations for Obama City. 
Exchanges might occur. Why don't we offer our thanks to him?" 
 
In January last year, Mayor Murakami sent a letter, in which he 
said: "It would be grateful if you would take an interest in OBAMA." 
The mayor introduced the history and culture of the city to the 
senator. Murakami also presented chopsticks to Obama and his wife. 
 
The Tokyo Shimbun's news coverage team of this column went to 
interview officials in Yokosuka City, where there is a town called 
Oppama. Regarding Obama City's efforts, however, a tourism bureau 
official just said, "You don't say!" It appears that Yokosuka will 
not take any action. The reporters also interviewed a spokesperson 
from Nissan Motor's Oppama plant who said: "I don't think our plant 
 
TOKYO 00000345  008 OF 008 
 
 
has any special plan." They were quite cool to the idea. 
 
The team then looked around for supporters of Hillary Clinton. The 
team found a regional currency called "hirali," which is available 
only in a shopping mall in Hirakata City, Osaka. One hirali is worth 
100 yen. Takeshi Muto, chief secretariat of the nonprofit 
organization Hirakata Regional Currency Hirali said: "Around 
January, our staff made a joke that since the pronunciations of the 
name of our association and the name 'Hillary' are the same, why 
don't we support Hillary Clinton? But nothing has happened yet." 
 
Chikusui Canycom, a farm equipment company, in Ukiha City, Fukuoka 
Prefecture, manufactures and sells tracklaying haulage vehicles with 
the brand name Hillary. The company started selling the vehicle in 
1993, when Bill Clinton became president of the United States. 
Hillary Clinton was then drawing public attention. In accordance 
with bringing out of a new model, the company changed the name of 
vehicle from the Japanese hiragana character to English. The 
official in charge of the public relations of the company flatly 
said: "The sounds of the words happen to be similar. We are not 
aware of Mrs. Hillary Clinton." But the company has the bush cutter 
called "George" and grass cutter "Masao." 
 
Hotel Sekumiya in Obama City has put Obama's portraits on the walls 
of its lobby and around the elevators. Seiji Fujiwara, executive 
managing director of the hotel, who also serves as chairman of the 
city's tourist association's promotion committee, has set up a 
self-proclaimed support group. Fujiwara said: 
 
"Hearing that Hillary first had the edge, our activity to support 
Obama was small. Since Obama has made great strides this time 
around, he now has a chance to win. I want him to beat Hillary. If 
he becomes president, I want him to hold a Japan-U.S. summit in the 
city of Obama" 
 
DONOVAN