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UNCLAS SECTION 01 OF 09 TOKYO 000677 
 
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 03/13/08 
 
 
INDEX: 
 
(1) Prime Minister Fukuda torn between emphasis on consumers and 
diplomacy toward China (Asahi) 
 
(2) Government to propose holding first meeting of "Lake Toya 
process" for post-Kyoto protocol in fall in Japan (Yomiuri) 
 
(3) LDP's Tanigaki at crucial stage in seeking support to run for 
party's presidential election; Tanigaki, Koga factions to merge into 
new faction in May (Tokyo Shimbun) 
 
(4) Emergency access to bases eyed in SDP's SOFA revision proposal 
(Okinawa Times) 
 
(5) MOD report calling for mandating regional defense bureaus to 
obtain the defense minister's approval for procurement and 
establishing life cycle cost management department (Sankei) 
 
(6) Letters to the editor column: "Withdraw the bases" a leap in 
logic (Ryukyu Shimpo) 
 
(7)Close battle on selection of BOJ governor (Nikkei) 
 
ARTICLES: 
 
(1) Prime Minister Fukuda torn between emphasis on consumers and 
diplomacy toward China 
 
ASAHI (Page 4) (Abridged) 
March 12, 2008 
 
Nanae Kurashige, Kenji Oyamada 
 
Prime Minister Fukuda is facing a dilemma between a policy stance 
that places emphasis on consumers, an important challenge for his 
administration, and his policy toward China. In order to deal with 
the issue of poisonous frozen dumplings imported from China, Fukuda 
has taken preventive measures at home, for instance, by 
strengthening the inspection system. But when it comes to the 
important question of shedding light on the causes of the poisonous 
dumplings, Japan and China have yet to work in close cooperation to 
find out the causes because both sides' investigators have differing 
opinions. Japan's dependence on imported Chinese foods has also made 
the situation more complicated. 
 
Poisonous dumplings issue affects bilateral ties 
 
"I have asked Beijing at every opportunity to resolve this incident 
swiftly. The important thing is to work together to resolve it as 
quickly as possible," Fukuda said when he was asked by reporters on 
March 11. 
 
Even at the end of February, when Chinese investigators announced 
that it was least likely that poisonous material was blended in 
dumplings in China, Fukuda showed an understanding toward China's 
stance, noting, "The Chinese officials are willing to shed light on 
the causes of the incident, as well as clear up who was responsible 
for it." 
 
Fukuda, who wishes to place a priority on relations with China, has 
reiterated that the cooperative relationship with China remains the 
 
TOKYO 00000677  002 OF 009 
 
 
same. His aide explained Fukuda's real feelings in this way: "He 
thinks that he needs to manage this situation well so that it will 
not evolve into a diplomatic issue." 
 
The poisonous dumplings came to light soon after Fukuda made it 
clear in his Diet policy speech in January that he would attach 
importance to consumers. 
 
For this reason, the government was quick to address the incident. 
Fukuda visited the Yokohama Quarantine Station to inspect its 
operation, established a bureau director-level post of information 
officer in charge of food hazards, and strengthened inspections of 
imported frozen and processed food for residual pesticides. 
 
However, no progress has been made on finding the cause of the 
incident. The government held a liaison meeting of relevant 
ministries and agencies on March 10 to deal with the problem, but 
what was reported there was that although the Japanese officials had 
asked their Chinese counterparts to come up with materials related 
to some 20 items, materials presented by the Chinese side in 
response to Japan's request were related to only three items. State 
Minister in Charge of People's Life Kishida told a news conference 
on March 11: "I hope the Chinese side will work together with us in 
investigating this." 
 
With Chinese President Hu Jintato's planned visit to Japan likely to 
be put off from April to May, some in the government expressed 
concern that the incident has had an adverse effect on relations 
with China. A high-level government official noted anxiously: "Hu's 
visit to Japan must be welcomed by the public; otherwise, the 
bilateral summit would lose half of its value. That's why we need to 
resolve the incident by all means." 
 
Fukuda is indeed caught between consumers and China as his excessive 
emphasis on consumer issues could have an adverse effect on overall 
Japan-China relations. 
 
Stagnation in distribution of food products 
 
Japan's food self-sufficiency ratio in fiscal 1965, when the ratio 
began to be calculated by the currently-used formula, was 73 PERCENT 
, but since then the ratio has been on the decline. In fiscal 2006, 
the ratio fell to 39 PERCENT , the lowest level among the 
industrialized countries. Among the food exporters to Japan, the 
United States has been at the top but its share declined as China, 
the second largest food exporter to Japan, increased its share. 
 
Japan imports vegetables and processed foods, including frozen 
foods, from China. Japanese imports of processed foods from China, 
in particular, expanded by more than 60 PERCENT  from 2001, when it 
totaled 320.2 billion yen, to 519 billion yen in 2006. A Nissui 
executive noted: "China is an integral part of the Japanese frozen 
food business." 
 
The Ministry of Health, Labor and Welfare (MHLW), which is tasked 
with inspections of imported foods at the border, did not examine 
residual pesticides contained in frozen foods, including dumplings 
using a number of ingredients. Soon after the revelation of the 
poisonous dumpling incident this time, MHLW began a spot inspection 
in Yokohama and Kobe, but the number of inspectors across the 
country totals only 334. Given this figure, it is impossible to 
examine all frozen foods imported from China, which arrive in Japan 
 
TOKYO 00000677  003 OF 009 
 
 
on the scale of 200,000 tons per year. 
 
The prolonged investigation into the incident has begun affecting 
trade in food with China. 
 
Imports of vegetables from China in February dropped 30 PERCENT 
from the same month the year before. A major food manufacturing 
company officer complained: "Since mid-February it has taken much 
time for customs procedures and inspections regarding frozen foods 
imported from Shandong Province, China." 
 
Meanwhile, 50 tons of rice exported from Japan to China reportedly 
have been left in a warehouse at a Chinese port for more than a 
month. In response to inquiries by the Ministry of Agriculture, 
Forestry and Fisheries (MAFF) about this rice, Chinese officials 
said that the delay likely stems from the Lunar New Year 
celebrations in China. However, even now no progress has been made 
on the procedures for distributing the rice. Some in MAFF take the 
view that it might have been a retaliatory act by China to Japan's 
tough response taken after the poisonous dumpling incident. 
 
If the distribution of foods becomes stagnant, it could affect the 
restaurant industry and the boxed meals industry for convenience 
stores, both of which use a number of Chinese food products. It 
could lead them to hike prices. Can Japan sketch out a food strategy 
toward China? The government is faced with a tough issue at present, 
but it has yet to come up with any effective measures. 
 
(2) Government to propose holding first meeting of "Lake Toya 
process" for post-Kyoto protocol in fall in Japan 
 
YOMIURI (Page 2) (Full) 
March 13, 2008 
 
In preparation for the Lake Toya Summit (G-8 Summit) in Hokkaido in 
July, a number of ministerial meetings will be held across the 
nation. As the first one, a climate change meeting of the world's 20 
biggest greenhouse gas emitters (G-20 meeting) will start in Chiba 
on March 14. In the meeting, the Japanese government intends to 
propose holding this fall in Japan the first meeting of a "Lake Toya 
process" planned to be established for creating a new mechanism to 
combat global warming to replace the Kyoto Protocol, which expires 
in 2012. 
 
The G-20 meeting on climate change, clean energy and sustainable 
development will bring together about 60 dignitaries, including 
environment ministers and energy ministers from 20 countries, 
including the Group of Eight (G-8) countries and such emerging 
countries as China and India. Former British Prime Minister Tony 
Blair is scheduled to deliver a speech there. It has been decided 
that the "Lake Toya process" will be established in the G-8 Summit 
in July. 
 
In the about 10 ministerial meetings planned to be held around the 
nation prior to the G-8 Summit, Japan, as the host of the summit, 
will coordinate agenda items and listen to views from other 
countries' representatives. The relevant Japanese cabinet ministers 
will chair all the meetings. High on the agenda in the G-8 Summit 
will be (1) climate change; (2) the global economy; and (3) African 
development. Particularly on the issue of climate change, the 
interests of the G-8 countries, such emerging countries as China and 
India, and developing countries are conflicting. Given this, it is 
 
TOKYO 00000677  004 OF 009 
 
 
essential to coordinate views in the ministerial meetings. The issue 
of climate change is likely to be discussed at such meetings as 
development ministerial and environmental ministerial, besides the 
G-20 meeting. 
 
Ministerial meetings prior to Lake Toya Summit in Hokkaido (July 7 - 
9) 
G-20 Summit in Chiba (March 14-16) 
Development Ministerial Meeting in Tokyo (April 5-6) 
Labor Ministerial Meeting in Niigata (May 11-13) 
Environmental Ministerial Meeting in Kobe (May 24-26) 
African Development Conference in Yokohama (May 28-30) 
Energy Ministerial Meeting in Aomori (June 7-8) 
Internal Affairs and Justice Ministerial Meeting in Tokyo (June 
11-13) 
Finance Ministerial Meeting in Osaka (June 13-14) 
Science and Technology Ministerial Meeting in Okinawa (June 15) 
Foreign Ministerial Meeting in Kyoto (June 26-27) 
 
(3) LDP's Tanigaki at crucial stage in seeking support to run for 
party's presidential election; Tanigaki, Koga factions to merge into 
new faction in May 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 13 2008 
 
Liberal Democratic Party Policy Research Council Chairman Sadakazu 
Tanigaki, who wants to succeed Yasuo Fukuda as president of the LDP 
and prime minister, is now facing a critical juncture. The reason is 
that some LDP lawmakers are raising objections to fielding Tanigaki 
as a candidate for the next LDP presidential election since it would 
be difficult for him to display his presence when his faction merges 
with the Koga faction. 
 
The Koga and Tanigaki factions, which emerged from the once 
prestigious "Kochikai," the formal title of the former Miyazawa 
faction, decided in a joint meeting that the two factions would 
merge in May into a new faction, selecting Makoto Koga as the head 
and Tanigaki as the deputy head. The new faction will have 61 
members, becoming the third largest in the LDP after the Tsushima 
faction (membership of 69). 
 
The focus is now on who will be fielded by the new faction in the 
next presidential election. 
 
Tanigaki ran for the first time in the 2006 presidential race, in 
which he was defeated by Shinzo Abe. Since then, he has been 
regarded in the LDP as one of the potential candidates for the party 
presidency. 
 
Although he was enthusiastic about running, Tanigaki forwent his 
candidacy in the presidential race last fall, lacking a groundswell 
of support he needed for filing. 
 
Moreover, many in the Koga faction supported Taro Aso, a former LDP 
secretary general, in the last presidential election. 
 
SIPDIS 
 
A veteran lawmaker pointed out that Tanigaki lacked visibility in 
the party. Aso, in contrast, has laid the groundwork for his next 
bid for the presidency by delivering speeches across the country and 
by advocating specific policy measures. 
 
 
TOKYO 00000677  005 OF 009 
 
 
This has led some in the Koga faction to express their disapproval 
of Tanigaki's candidacy for the next election. A mid-level lawmaker 
said: "I wonder whether we can fight well in the next House of 
Representative election, which will be a crucial battle." Whether 
Tanigaki can run in the next presidential election depends on 
whether he can display his ability as LDP policy chief in dealing 
with the political row with the opposition over highway construction 
revenues. 
 
(4) Emergency access to bases eyed in SDP's SOFA revision proposal 
 
OKINAWA TIMES (Page 2) (Full) 
March 13, 2008 
 
TOKYO-Social Democratic Party (Shaminto) President Mizuho Fukushima 
and two SDP lawmakers, Kantoku Teruya, a member of the House of 
Representatives, and Tokushin Yamauchi, a member of the House of 
Councillors, held a press conference in the Diet and announced the 
party's proposal to revise the Japan-U.S. Status of Forces 
Agreement. The proposal features allowing emergency entry into U.S. 
military bases with notification and requiring the Japanese 
government to restore the sites of bases to their original state 
after their reversion to Japan. 
 
Teruya, who took part in the making of the SDP's SOFA revision plan, 
stressed his party's position: "Our plan proposes an overall 
revision of the SOFA from the perspective of sovereignty, human 
rights, and the environment. The SDP will pursue a drastic revision 
of the SOFA instead of improving its operation." 
 
In addition, the SDP plan also requires USFJ to submit a quadrennial 
base use plan and report the birthdates, sex, ranks, and positions 
of off-base SOFA personnel in conformity with the Basic Resident 
Register Law. 
 
Meanwhile, the Democratic Party of Japan (Minshuto) and the People's 
New Party have already worked out their respective SOFA revision 
plans. "There is no so much difference," Teruya said. "We may work 
it out in an unexpectedly short time," he added. 
 
Points from SDF's SOFA revision proposal 
 
Article 2 (base use): USFJ must submit a quadrennial report on the 
purpose, scope, and conditions of base use. 
 
Article 3 (base entry): Japanese authorities may have emergency 
access to U.S. military bases with notification. An environmental 
assessment is required for building new facilities. 
 
Article 4 (restoration to original state): The Japanese government 
must restore bases to their original state. 
 
Article 9 (off-base living): USFJ must report necessary matters to 
Japan in conformity with the purport of the Foreign Resident 
Registration Law and the Basic Resident Register Law. 
 
Article 17 (custody): Suspects will be detained at Japanese 
facilities before they are indicted. The U.S. may state its views on 
the custody of suspects, and Japan will pay favorable 
consideration. 
 
(5) MOD report calling for mandating regional defense bureaus to 
 
TOKYO 00000677  006 OF 009 
 
 
obtain the defense minister's approval for procurement and 
establishing life cycle cost management department 
 
SANKEI (Page 5) (Abridged slightly) 
March 13, 2008 
 
In the wake of the revelation of defense contractor Yamada Corp.'s 
bill-padding practice, the Ministry of Defense yesterday drafted a 
final report on reform of the equipment procurement system. The 
envisaged new system is designed to require the regional defense 
bureaus to obtain the defense minister's approval in concluding 
discretionary contracts in excess of 150 million yen and to place 
them under the watch of third-party organs in order to prevent 
receiving padded bills. The report also calls for the establishment 
in MOD in April 2009 or later of a department to manage the life 
cycle cost of major equipment for reducing the procurement cost. 
 
The ministry will announce its final report later this month based 
on this report which was produced by the comprehensive acquisition 
reform project team, chaired by Parliamentary Secretary Minoru 
Terada. 
 
It came to light late last year that over the five-year period that 
ended in fiscal 2006, Yamada Corp. had overcharged regional defense 
bureaus by at least 3 billion yen. The amount is far greater than 
the 230 million yen the Equipment Procurement and Construction 
Office (EPCO) -- the central procurement office -- is suspected to 
have been overcharged. 
 
The report also urges the ministry to revise instructions to require 
the regional defense bureaus to obtain the defense minister's 
approval in concluding discretionary contracts worth over 150 
million yen and to implement the revised instructions in July of 
this year. The functions of the bidding oversight committee in each 
regional defense bureau that checks the appropriateness of 
construction work will also be enhanced so that it can oversee the 
procurement of equipment, as well. 
 
MOD has not been aware of the life cycle cost of most equipment, 
including the maintenance and management costs, thereby resulting in 
the wasteful development and procurement of equipment. 
 
For this reason, MOD has decided to launch a new department in EPCO 
that will be tasked with exclusively managing information on the 
maintenance and management costs. The new department will provide a 
team of officials of the internal bureaus and the staff offices of 
the three forces with necessary information in making decisions on 
developing and mass-producing major equipment. 
 
The report also offers a plan to establish an import control 
department in EPCO in 2009 to exclusively serve as a point of 
contact with foreign manufacturers. Staffing the department with 
certified public accountants and retired trading firm employees, the 
aim is to increase direct contacts with foreign makers. Also 
included in the report is a plan to establish a technology 
evaluation committee to standardize parts and equipment that differ 
among the Ground, Maritime, and Air Self-Defense Forces and to allow 
parliamentary secretaries and vice ministers to assess the research 
and development of major equipment. 
 
(6) Letters to the editor column: "Withdraw the bases" a leap in 
logic 
 
TOKYO 00000677  007 OF 009 
 
 
 
RYUKYU SHIMPO (Page 5) (Full) 
March 12, 2008 
 
Osamu Miyahira, 42, local government employee, Naha City 
 
The recent alleged rape of a junior high school girl by a U.S. 
serviceman is causing wide repercussions. People are saying there is 
no choice but to remove the bases in order to eliminate this sort of 
incident. This sort of opinion, however, is too much of a leap in 
logic. Serious crimes are not exclusive to U.S. military personnel. 
 
According to the Okinawa prefectural police's confirmed statistics, 
there were 101 serious crimes last year (in Okinawa Prefecture), 
including six cases involving U.S. military personnel. In other 
words, the greater part of serious crimes were brought about by 
Okinawa Prefecture's locals. 
 
If that is the case, "this sort of incident" will continue to take 
place, irrespective of the presence of military bases. In fact, 
there were a number of crimes that were almost coincident with the 
incident this time. Those incidents included a local man's 
molestation of a schoolgirl and another local's buying of sex from 
an underage girl. 
 
As it stands, it is nonsense to denounce the U.S. military by taking 
up the recent incident. The logic of crying out against the U.S. 
military's realignment, which is directly linked to Japan's national 
defense, is nothing but switching arguments. 
 
There have been press reports saying a civic group is rallying 
prefectural residents for a rally. I get red-faced whenever I see or 
hear "this sort of news reporting." I am probably not the only one 
who thinks this way. It is outrageous to exploit the incident this 
time for political purposes, and it is out of the question to hold 
such a rally. 
 
(7)Close battle on selection of BOJ governor 
 
NIKKEI (Page 3) (Slightly abridged) 
March 13, 2008 
 
With the Upper House yesterday voting down the promotion of Deputy 
Bank of Japan (BOJ) Governor Toshiro Muto to governor, the selection 
of the "currency watchdog" will start from scratch. At present, only 
the appointment of Masaaki Shirakawa, former BOJ director and a 
professor at Kyoto University, as deputy governor has been approved. 
The government and the ruling camp are rushing to reshape their 
strategy, including whether the plan to promote Muto should be 
resubmitted or whether his name should be replaced. However, they 
have not yet decided what to do about the issue. With the expiration 
of the term of incumbent Governor Toshihiko Fukui close at hand on 
March 19, the possibility of the post of BOJ governor becoming 
vacant has become even more likely. 
 
Scenario 1: Resubmission of nomination of Muto as candidate; Will 
opposition camp reject him again? 
 
Prime Minister Yasuo Fukuda yesterday complained about the 
Democratic Party of Japan's (DPJ or Minshuto) refusal to New Komeito 
head Akihiro Ota, who just returned home from South Korea: "This is 
troublesome. We picked them to strike a balance among the Finance 
 
TOKYO 00000677  008 OF 009 
 
 
Ministry, the Bank of Japan and the private sector. Even Mr. Ito 
(Takatoshi Ito, professor at Tokyo University) has been 
disapproved." He also said: "I think the present nominees are best. 
The three are one set." Fukuda thus indicated that he has no 
intention of replacing Muto and Ito at the moment. 
 
The government at noon today will hold a plenary session. The 
likelihood is that the government plan to nominate former Vice 
Finance Minister Muto as governor and Shirakawa and Ito as deputy 
governor will be adopted by a majority approval by the ruling 
parties. The aim is to clarify the Lower House's support for the 
government plan, as one senior ruling party member put it. 
 
With the Lower and Upper Houses mostly likely reaching different 
decisions, the ruling parties intend to call on the opposition 
parties to agree to hold party-head talks or a meeting of 
secretaries of general.  The LDP and the New Komeito on the 12th 
 
SIPDIS 
discussed measures on how to deal with the issue of appointing BOJ 
governor and deputy governors at a meeting of their secretaries 
general and Diet Policy Committee chairmen. 
 
However, there is a slim chance of opposition parties accepting Muto 
because of the approval by the Lower House. The issue will most 
likely develop into discussions including a revision of the bill 
amending the Special Tax Measures Law that incorporates a proposal 
for maintaining the provisional gas tax rate. The bargaining between 
the ruling and opposition parties is bound to become fierce. The 
official view of the government and the ruling parties on personnel 
appointments for key organizations that require Diet approval is 
that it is not subject to the rule that it is not allowed to 
reconsider the issue during the same Diet session, once it has been 
adopted, according to Chief Cabinet Secretary Machimura. Some are 
pinning hopes that even if talks between the ruling and opposition 
parties bog down, if the ruling camp resubmits the proposal to the 
Upper House, Muto can be approved, provided that ruling parties 
abstain from a roll call at a plenary session. 
 
Scenario 2: Replacing candidates will likely be difficult without 
decisive factor 
 
DPJ Secretary General Yukio Hatoyama during a TBS radio program on 
the 12th indicated his party's stance that replacing the candidates 
in question would be a precondition for it to accept a call for 
holding party-head talks. He said, "If the ruling parties seriously 
ask us our view on who would be the best candidates, we would not 
the request for party-head talks at all." 
 
The prevailing view in the opposition camp is, "The government 
should propose another candidate for BOJ governor by the 19th, 
taking the will of the Upper House into consideration," as Social 
Democratic Party head Mizuho Fukushima put it. Some ruling party 
members said that it would be unavoidable to replace Muto, with one 
senior official saying, "Some say that we should propose the same 
person, but it would be hard to do so." 
 
Some DPJ members recommend former Deputy BOJ governor Yutaka 
Yamaguchi. However, many government and ruling party officials are 
negative toward the idea with one saying, "If Mr. Yamaguchi were 
appointed, two out of the three seats of the BOJ leadership would be 
held by those who are former BOJ officials." 
 
Another idea is to appoint Shirakawa as governor instead of vice 
 
TOKYO 00000677  009 OF 009 
 
 
governor. Hatoyama indicated his perception: "He is not bad as a 
person. It is conceivable." 
 
Scenario 3: Confrontation between ruling and opposition camps 
becomes protracted; Shirakawa acts as acting governor 
 
Even if the feud between the ruling and opposition parties becomes 
protracted, the government on the 20th intends to appoint Shirakawa, 
who was given approval by both the Lower and Upper Houses. If the 
post of BOJ governor remains vacant, deputy governor Shirakawa would 
perform the task of governor in compliance with the BOJ Law. 
 
However, it would be unprecedented that two posts -- governor and 
one deputy governor -- of the BOJ Policy Board remain vacant. A 
sense of alarm is heightening with one senior ruling party member 
noting that appointing an acting governor would be tantamount to the 
BOJ ceasing to function from the international viewpoint. 
 
A monetary policy meeting is slated for April 8-9. The meeting of 
finance ministers and central governors of the Group of Seven 
Nations (G-7) is to take place in Washington around the 11th. The 
prevailing view in the government and the ruling camp is that the 
post of BOJ governor can be left vacant until the end of March at 
the longest. 
 
SCHIEFFER