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Viewing cable 06TOKYO1321, DAILY SUMMARY OF JAPANESE PRESS 03/13/06

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Reference ID Created Released Classification Origin
06TOKYO1321 2006-03-13 07:46 2011-08-25 00:00 UNCLASSIFIED Embassy Tokyo
VZCZCXRO6326
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1321/01 0720746
ZNR UUUUU ZZH
P 130746Z MAR 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9669
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 7718
RUEHFK/AMCONSUL FUKUOKA 5088
RUEHOK/AMCONSUL OSAKA KOBE 8213
RUEHNAG/AMCONSUL NAGOYA 5114
RUEHKSO/AMCONSUL SAPPORO 6268
RUEHBJ/AMEMBASSY BEIJING 1094
RUEHUL/AMEMBASSY SEOUL 7285
RUCNDT/USMISSION USUN NEW YORK 9268
UNCLAS SECTION 01 OF 11 TOKYO 001321 
 
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 03/13/06 
 
INDEX: 
 
(1) Iwakuni plebiscite: Vast majority says "no" to relocation 
plan; Results regrettable to proponents 
 
(2) 2,600 residents take part in rally near Camp Zama to call for 
solidarity 
 
(3) Government alarmed by a possible spillover of Iwakuni 
rejection; Blow to government just before creating a final report 
on the realignment of US forces in Japan 
 
(4) Atsugi base neighbors confused over Iwakuni poll 
 
(5) Transfer of US Marine Corps in Okinawa to Guam in USFJ 
realignment; Japan proposes shouldering cost of building houses, 
using loan system 
 
(6) Editorial: Plebiscite in Iwakuni City - Realignment of US 
forces in Japan nonetheless necessary 
 
(7) SDF-USFJ fusion and its fate-Ahead of final report on USFJ 
realignment (Part 3): Rear-echelon support; SDF routinizes 
shipping, security for US forces 
 
(8) China's proposal includes area on Japanese side of median 
boundary and in Japan-South Korea joint development zone, besides 
area near Senkakus 
 
(9) Exchange of recriminations intensifying between Japan, China 
over Yasukuni, gas field development 
 
(10) Submission of administrative reform bill to Diet; Battle 
between government and bureaucracy over specific items expected; 
Focus on basic policy guidelines on economic and fiscal 
management and structural reforms to be formulated in June 
 
ARTICLES: 
 
(1) Iwakuni plebiscite: Vast majority says "no" to relocation 
plan; Results regrettable to proponents 
 
MAINICHI (Page 30) (Abridged slightly) 
March 13, 2006 
 
Citizens' desire not to increase the aircraft noise level came 
through in the plebiscite held yesterday in Iwakuni City, 
Yamaguchi Prefecture. In the referendum, the vast majority 
expressed opposition to the government's plan to relocate US 
carrier-borne aircraft to the US base in the city. Encouraged by 
the results, opponents of the relocation plan have begun vocally 
urging the government to rescind the plan, while those tolerant 
of the plan are calling for attaching conditions to it. Harboring 
strong distrust in the central government's approach of making 
decisions without prior consultations with affected local areas, 
Iwakuni has sent a clear and loud message to Tokyo. 
 
The votes were counted at the Iwakuni City Gymnasium last night, 
and some 60 members of a major anti-relocation group watching the 
process were overjoyed as it became clear that the vast majority 
had voted against the relocation plan. 
 
An emotionally charged Kiyoshi Okawa, 47, a co-representative of 
 
TOKYO 00001321  002 OF 011 
 
 
a group to make the plebiscite a success, said, "I'm so glad, and 
I'm proud to be an Iwakuni citizen." He learned that the votes 
would be counted, as turnout had exceeded the 50% line around 
4:00 p.m. yesterday at the group's office near the Kintai Bridge. 
Subsequently, about 25 citizens, including the group's members, 
assembled in the city gymnasium. 
 
Okawa said feverishly, "The government should stop gauging 
America's feelings, and that is public opinion." 
 
Also rushing to the gymnasium were Kaoru Kawamoto, 53, who heads 
a citizens' group opposing the relocation of carrier-based 
aircraft and night landing practice to the Iwakuni base, and some 
10 members of the group. Members applauded Kawamoto, who said, "I 
want to see our mayor convey the residents' loud voice to the 
central government." Meanwhile, Yoshimichi Hirose, 82, who heads 
a group opposed to the referendum, noted bitterly: "The results 
are regrettable for the future of Iwakuni. I expect Mayor Ihara 
to negotiate with the central government of his own volition in a 
responsible manner." 
 
(2) 2,600 residents take part in rally near Camp Zama to call for 
solidarity 
 
MAINICHI (Page 30) (Full) 
March 13, 2006 
 
The outcome of yesterday's Iwakuni plebiscite has drawn a mixed 
reaction from municipal governments in the vicinity of the US 
Atsugi base in Kanagawa Prefecture, which have been suffering 
from noise pollution from carrier-borne aircraft. A rally was 
also held yesterday near Camp Zama, which straddles Zama and 
Sagamihara cities, drawing some 2,600 residents, mostly opponents 
of the planned US force realignment. Participants chanted, "We 
will block the relocation plan in cooperation (with Iwakuni)!" 
 
Many mayors of municipalities near Atsugi urged the central 
government to present possible solutions for the relocation 
issue, noting that they are not in a position to comment on the 
Iwakuni plebiscite. Yamato Mayor Kimiyasu Tsuchiya said matter-of- 
factly, "Such an outcome was expected." Mayor Masaru Uchino of 
Ebina commented, "I expect the central government to implement 
good solutions that can win the understanding of affected local 
governments in a responsible fashion." 
 
Heads of six municipalities near US Yokota Air Base in Tokyo 
abstained from commenting on the Iwakuni referendum. Fussa Mayor 
Hisato Nozawa simply said, "The matter concerns only Iwakuni." 
 
(3) Government alarmed by a possible spillover of Iwakuni 
rejection; Blow to government just before creating a final report 
on the realignment of US forces in Japan 
 
MAINICHI (Page 3) (Full) 
March 13, 2006 
 
By Yoso Furumoto 
 
A majority of residents in Iwakuni City, Yamaguchi Prefecture, 
voted against the planned relocation of (carrier-based aircraft 
to the US Marine Corps' Iwakuni Air Station). This outcome has 
been a heavy blow to the central government, which had wanted to 
launch full consultations with locals as the end-of-the-March 
 
TOKYO 00001321  003 OF 011 
 
 
deadline for a final report of the realignment is approaching. 
The government is poised to push the relocation of carrier-borne 
aircraft to the Iwakuni base, but its efforts to obtain local 
consent are sure to run into difficulties. Also, the government 
is increasingly alarmed by a possible spillover of public 
objection to the realignment to other municipalities across the 
nation. 
 
In an effort to reduce the base-hosting municipalities' burden, 
the government has given priority to relocating carrier-borne 
aircraft based at Atsugi to other facilities. Despite the outcome 
of the nonbinding plebiscite, in which a majority voted against 
the relocation, the government has no intention of changing the 
plan. 
 
The government intends to remain in close contact with the 
prefectural government, which is flexible about accepting the 
relocation, as well as local economic and other circles that are 
looking to the economic aspects of the base and continue efforts 
to seek the understanding of Iwakuni City. The government may be 
forced to present a new set of measures, such as a regional 
economic stimulus package. 
 
In the talks with the United States, the initial plan for KC-130 
air tankers was to relocate them from the US Futenma airfield in 
Okinawa Prefecture to the Maritime Self-Defense Force's (MSDF) 
Kanoya base in Kagoshima Prefecture. But the US has now called 
for a change to the initial plan to relocate them from Futenma to 
the Iwakuni base. But no conclusion has been reached yet. This 
change is likely to have a subtle effect on the ongoing talks 
with the US, for it would bring about a new burden to Iwakuni. 
 
What the government is now concerned about most in regard to the 
result of the referendum is a possible spillover to Okinawa 
Prefecture, which has strongly objected to the relocation of the 
Futenma airfield to the coastal area of Camp Schwab. If this 
relocation becomes impossible with the anti-relocation campaign 
gaining momentum, the transfer of the US Marines' headquarters 
from Okinawa to Guam and a reduction of up to 8,000 Marines could 
be called off, given the US assertion that the realignment of 
bases will be done in a package. 
 
JDA Director-General Nukaga: Strive to obtain understanding and 
cooperation 
 
JDA Director-General Fukushiro Nukaga released the following 
comment late yesterday: 
 
"The relocation of carrier-borne aircraft to the Iwakuni base 
must be realized in terms of maintaining Japan's security and 
deterrent force, as well as reducing local burdens. I will do my 
utmost to obtain local understanding and cooperation." 
 
LDP Upper House Caucus Secretary General Katayama: "The 
government is responsible for national security. The referendum 
is nothing more than regional egoism." 
 
The Liberal Democratic Party's Upper House Caucus Secretary 
General Toranosuke Katayama yesterday criticized Iwakuni Mayor 
Katsusuke Ihara, who had proposed holding the plebiscite, saying: 
"It's improper to put things the government is responsible for 
like security and defense to a referendum. Doing so is a kind of 
regional egoism." 
 
TOKYO 00001321  004 OF 011 
 
 
 
Comments by experts: "Consideration is necessary" and "Impact is 
limited" 
 
By Kazuhiro Tahara and Norie Ueno 
 
We interviewed experts about Iwakuni City's objections to the 
planned relocation as seen in the referendum. 
 
Osamu Watanabe, a professor of political science at Hitotsubashi 
University who is well versed on security issues, said: "The 
realignment talks are going on without consultations with local 
municipalities. This sort of problem has come to the fore." 
Hiroshi Honma, a professor of international law at Hosei 
University, also criticized the government's stance of blindly 
following the US, noting: "The central government needs to 
reflect local voices in negotiations with the US." 
 
On the other hand, Toshiya Hoshino, a professor of international 
politics at Osaka University said: "It has meaning in that it is 
an opinion poll about the bases, but there will be no change to 
the current trend of following the interim report." Takashi 
Kawakami, a professor of security issues at Takushoku University 
who is well versed in security affairs, analyzed: "The direct 
impact will be local, such as the mayoral election." 
 
(4) Atsugi base neighbors confused over Iwakuni poll 
 
ASAHI (Page 38) (Full) 
March 13, 2006 
 
The city of Iwakuni in Yamaguchi Prefecture has now rejected the 
planned redeployment of US carrier-borne fighter jets to the US 
Marine Corps' Iwakuni base in the prefecture from the US Navy's 
Atsugi base in Kanagawa Prefecture over the realignment of US 
forces in Japan as a result of yesterday's plebiscite. One of the 
Atsugi base's hosts, the city of Yamato in Kanagawa Prefecture, 
has regarded the redeployment plan as a "rare opportunity," 
according to a senior official of the city's municipal 
government. Another senior official, however, voiced concern 
about Iwakuni's rejection of the redeployment plan, saying the 
redeployment plan has now become uncertain. 
 
Meanwhile, local communities around Atsugi have been suffering 
from aircraft noise and have been feeling uneasy about the risk 
of aircraft crashes. Their residents also appeared perplexed 
about the outcome of the referendum. "It's only natural that 
Iwakuni citizens want to live under the safe, quiet sky," said 
Motomu Maya, 79, one of those who have filed a class action 
lawsuit against Atsugi base noise. "I can understand their 
desire, and that's all I can say," he added. 
 
(5) Transfer of US Marine Corps in Okinawa to Guam in USFJ 
realignment; Japan proposes shouldering cost of building houses, 
using loan system 
 
YOMIURI (Page 2) (Full) 
March 13, 2006 
 
Japan-US working-level talks by foreign and defense officials 
were held in Hawaii on Mar. 11. The meeting discussed the 
realignment of US forces in Japan. The Japanese side conveyed to 
the US side its readiness to shoulder the costs of transferring 
 
TOKYO 00001321  005 OF 011 
 
 
Marines stationed in Okinawa to Guam, including costs related to 
the building of houses for US servicemen and their families, 
using a loan system financed with private-sector funds. The 
proposal is based on the idea of reducing Japan's burden by 
having the US repay such costs so as to obtain the understanding 
of the public. The US side did not object to the proposed loan 
system, but it asked Japan to provide grant aid for the 
consolidation of the base as a whole. The two countries agreed to 
coordinate views on the issue. 
 
The two countries will again hold a working-level meeting in 
Tokyo on Mar. 20 or later with the aim of mapping out a final 
report and releasing it by the end of the month. 
 
The US during the working-level talks in February had submitted 
an estimate that the cost of the transfer would be approximately 
7.6 billion dollars (approximately 813.2 billion yen) and 
presented the breakdown, which included approximately 4.7 billion 
dollars for expenditures related to housing. The US later cut 
back on some of spending items but added the cost of building 
infrastructure. During the Hawaii talks, it came up with an 
amount that greatly exceeded the previous 8 billion dollars 
(approximately 856 billion yen). 
 
Japan intends to have the private sector build housing and other 
facilities, financed by the Japan Bank for International 
Cooperation (JBIC), and receiving repayments from the US 
government in the form of rent. This is the application of the US 
public-private partnership, which is similar to Japan's private 
finance initiative (PFI), applied to the construction of social 
infrastructure using private-sector funds. 
 
However, the problem with this system is it has to be determined 
whether or not it is possible for the JBIC to finance the 
construction of US military housing abroad under existing law. It 
is necessary to enact a new law that provides a legal basis for 
extending fiscal assistance for the construction of US military 
facilities overseas, even if the assistance is rendered as grant 
aid. 
 
(6) Editorial: Plebiscite in Iwakuni City - Realignment of US 
forces in Japan nonetheless necessary 
 
YOMIURI (Page 3) (Full) 
March 13, 2006 
 
A majority of residents in Iwakuni City, Yamaguchi Prefecture, 
voted against the planned relocation of carrier-based aircraft to 
the city. The relocation is planned as part of the realignment of 
US forces in Japan. 
 
The voter turnout was 59%. Residents who voted against the 
planned relocation overwhelmed those favoring it. The outcome 
demonstrates strong public sentiment against an addition to the 
base-related burden. 
 
The result is not legally binding. But for the smooth 
facilitation of the US military realignment, it is only natural 
for government to make its best efforts to obtain local 
understanding for the relocation. 
 
Under the agreed plan between the Japanese and US governments, 57 
carrier-based planes currently assigned to the US Naval Air 
 
TOKYO 00001321  006 OF 011 
 
 
Facility Atsugi in Kanagawa Prefecture and 1,600 US military 
personnel will be transferred to the US Iwakuni Marine Corps Air 
Station. The Maritime Self-Defense Force's (MSDF) 17 planes and 
its 700 personnel currently based at Iwakuni will be moved to the 
MSDF's Atsugi base. 
 
The objectives of the US force realignment in Japan are to deal 
with the changing security situation, as North Korea has revealed 
its nuclear ambitions and China is on its way to becoming a 
military superpower, as well as with international terrorism and 
other new threats. The realignment is an extremely important 
challenge for Japan in terms of strengthening its alliance with 
the United States and beefing up its own security. 
 
A number of problems had been pointed out regarding the 
plebiscite. 
 
Under Iwakuni City's ordinance, the referendum would be invalid 
if voter turnout were less than 50%. Opponents of the planned 
relocation appealed to residents to vote against the relocation, 
while the pro-relocation group called on residents to stay away 
from the poll. It is not a surprise to see that an overwhelming 
majority voted against the relocation plan, given that such an 
outcome was foreseen if voter turnout cleared the required 
percentage. 
 
Iwakuni Mayor Katsusuke Ihara, who thought it would be necessary 
to show the central government the will of the local community, 
suggested the plebiscite. 
 
The city's ordinance, however, stipulates that items that do not 
come under municipal authority are not put to a referendum. Some 
residents also had complained that the planned relocation relates 
to the central government's authority, so holding a referendum on 
it is not in line with the city ordinance. 
 
Iwakuni City will merge with seven neighboring towns and villages 
on March 20 and in April a mayoral election for the new Iwakuni 
City will take place. Some residents therefore criticized the 
referendum as effectively being an election campaign. There are 
some neighboring municipalities that have shown understanding 
about the relocation. Questions were also raised about Iwakuni 
City's move to hold a referendum on its own immediately before 
the merger. 
 
Considering all these things, Iwakuni City must not cause any 
more confusion by unnecessarily bringing about a showdown with 
the central government. 
 
The important thing is for the central and local governments to 
hold sincere consultations to protect national interests while 
giving due consideration to the benefits of the residents. 
 
A number of difficult negotiations with local residents still 
remain to be finalized, including the relocation of the US 
Marines' Futenma Air Station. A delay in the US realignment plan 
due to Japan's domestic circumstances would only hurt the 
bilateral relationship of trust. The government must do 
everything it can in trying to meet the end-of-the-month target 
for a final agreement with the US. 
 
(7) SDF-USFJ fusion and its fate-Ahead of final report on USFJ 
realignment (Part 3): Rear-echelon support; SDF routinizes 
 
TOKYO 00001321  007 OF 011 
 
 
shipping, security for US forces 
 
ASAHI (Page 37) (Full) 
March 5, 2006 
 
In the northern part of Okinawa's main island is a military 
training area for the US Marine Corps. The area is known as Red 
Beach. A crowd of US servicemen is embarking on a white twin- 
hulled vessel, which was once loaded with as many as 1,000 
troops, armored vehicles, 155-mm howitzers, and choppers from 
Futenma airfield. 
 
The vessel's name is WestPac Express, and its maximum speed is 
about 70 km/h, nearly twice as fast as an assault landing craft. 
The WestPac Express is a high-speed transport for the US Marines. 
Okinawa has been home to the WestPac Express since 2001. The 
vessel shuttles to and from the Philippines, Thailand, Guam, and 
other locations. 
 
The United States will substantially scale back on its troop 
deployment near the former Iron Curtain in Europe and near the 
military boundary on the Korean Peninsula. Meanwhile, the United 
States is also readying its troops for rapid deployment around 
the world so that its military can promptly react to terrorism 
and other unexpected attacks. Those seaborne troops therefore 
need a high-speed transport. 
 
Japan's Self-Defense Forces will also have a high-speed 
transport. The Defense Agency had no plan to introduce such a 
transport. However, the US military wants the SDF to have a high- 
speed transport for US troops. The US government therefore asked 
the Japanese government in their talks over the realignment of US 
forces in Japan, and the two governments incorporated it in an 
interim report on the US military realignment. For now, the 
Maritime Self-Defense Force is expected to use the transport in 
order to sealift Marines between Japan and Guam after they are 
moved from Okinawa to Guam. 
 
In March 2004, the Ground Self-Defense Force trained at its Naha 
garrison for the security of US military bases. The GSDF worked 
out plans for how to deploy its troops and vehicles and where to 
set up a command post in order to guard Camp Zukeran (i.e., Camp 
Foster), where the US Marines have their base headquarters. 
 
The GSDF has been tasked with troop mobilization for its 
additional role of securing US military bases and SDF facilities 
since the Sept. 11, 2001, terrorist attacks in the United States. 
In 2003, the GSDF began full-fledged training for such security 
mobilization. So far, the GSDF has trained about 20 times for 
that purpose. 
 
The GSDF used to actually place troops at US military facilities 
in its security mobilization training. In Okinawa, however, the 
GSDF went no further than to conduct a command post exercise. 
That is because the GSDF considered the island prefecture's 
public sensitiveness to the US military presence there. "We don't 
want people in Okinawa Prefecture to misunderstand that the SDF, 
which should defend the people of Okinawa Prefecture, defends US 
forces," said a GSDF officer garrisoned at the GSDF's Naha base. 
Such a situation also could change if and when the US military 
presence is actually realigned. That is because the interim 
report incorporated a course of action for the SDF and US forces 
to share US military bases in Okinawa. If the GSDF routinizes its 
 
TOKYO 00001321  008 OF 011 
 
 
stationing of troops at US military bases, it will be possible 
for the GSDF to strengthen its warning setup for US forces in the 
name of securing SDF facilities even without a security 
mobilization order. 
 
In those days, Yoshinori Ono, who was at the time director 
general of the Defense Agency, gave instructions to the agency's 
senior officials attending the realignment talks. In his 
directives, Ono told them to propose reducing the footprint of US 
forces in Japan in exchange for Japan's undertaking of base 
security and other management operations at US military bases to 
be shared with the SDF. 
 
The SDF engages in shipping, supply, base security, and other 
rear-echelon services, with the US military specializing in 
striking power. This is the idea behind the US military 
realignment. 
 
Japan can expect to reduce the number of US troops in Japan and 
to alleviate the burden of base-hosting localities while 
maintaining deterrent capabilities against China and North Korea. 
Meanwhile, the United States can swing its reduced troops around 
the world with Japan's backing. The two countries' expectations 
coincided. 
 
The SDF is not allowed to take part in combat operations due to 
constitutional constraints as long as Japan is not facing an 
emergency. "All Japan can do for now is to fulfill its support in 
the rear," says a senior official of the Defense Agency. Such a 
view dominates the agency. 
 
Even so, some of the GSDF's uniformed staff are reluctant about 
such roles. One of them said, "Why do we have to subcontract 
routine work like shipping and base security for US forces?" This 
official added, "The SDF is not a part of US forces." Another 
said, "The more our integration goes on, the more difficult it 
will be for the Japanese government to differ from the United 
States in its making of policy decisions." 
 
How far should the SDF go in its fusion with the US military? 
Where can it apply a brake? Japan and the United States are now 
in the final phase of talks over the US military presence's 
realignment to release a final report in late March. 
 
This is the last of a three-part series, SDF-USFJ fusion and its 
fate-Ahead of final report on USFJ realignment. 
 
(8) China's proposal includes area on Japanese side of median 
boundary and in Japan-South Korea joint development zone, besides 
area near Senkakus 
 
SANKEI (Top Play) (Slightly abridged) 
March 11, 2006 
 
In its proposal for joint development with Japan of gas fields in 
the East China Sea, China cited two areas, both of which lie on 
the Japanese side of the median boundary line set by Japan, 
indicating that China has no intention of jointly exploring with 
Japan gas fields situated on the Chinese side of the median line. 
 
According to several government and diplomatic sources, in the 
fourth round of Japan-China government-level talks held in 
Beijing on March 6-7, a Chinese representative distributed to the 
 
TOKYO 00001321  009 OF 011 
 
 
participants copies of a marine chart on which black dots marked 
their proposed sites for joint development. The chart did not 
include the median line set by Japan. 
 
The Chinese representative reportedly gave no detailed 
information about the locations, such as latitude and longitude, 
only saying: "We are ready to give a detailed explanation if you 
are interested in our nation's proposal." 
 
As a result of carefully examining the marked areas after the 
talks, the Japanese delegation found that one area is on the 
Japanese side of the median boundary and is within the Japan- 
South Korea joint development area based on their accord. The 
delegates also found that another area is located about 22.2 
kilometers north of the Senkaku Islands and is within Japan's 
exclusive economic zone (EEZ). However, Foreign Ministry Asian 
and Oceanian Affairs Bureau Director General Kenichiro Sasae and 
other Japanese representatives did not immediately report on the 
Chinese proposal to the Prime Minister's Office. They also 
requested that the areas proposed by China be kept closed. 
 
On March 8, after returning to Japan, Sasae detailed the contents 
of the talks separately to Prime Minister Junichiro Koizumi and 
Chief Cabinet Secretary Shinzo Abe. Abe reportedly reprimanded 
Sasae harshly, saying: "Joint development in the two areas set 
forth in the proposal is out of the question. Why didn't you 
refuse to accept it?" 
 
A senior government official expressed displeasure with the 
stance taken by Japanese negotiators, saying: "It is fully 
conceivable that China would try to delay negotiations. Keeping 
such a possibility in mind, Japan should have said, 'Japan will 
start test-drilling on its own if China refuses to respond to 
joint development.'" 
 
The Liberal Democratic Party on March 10 approved a bill designed 
to ensure the safe exploitation of natural resources within the 
nation's EEZ. The LDP plans to submit the bill with the New 
Komeito and the Democratic Party of Japan. 
 
Under the bill, the Land, Infrastructure, and Transport Ministry 
would designate an area 500 meters around a facility set up to 
exploit, develop, or investigate natural resources within the 
Japan-set EEZ median line as a restricted area. The government 
has provided Teikoku Oil Co. with test-drilling rights in the 
East China Sea, but there is no legal framework to protect oil 
drilling and other equipment from being damaged. 
 
(9) Exchange of recriminations intensifying between Japan, China 
over Yasukuni, gas field development 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 13, 2006 
 
An exchange of recriminations is intensifying between the 
Japanese and Chinese governments. There are a host of issues 
pending between the two countries, such as Prime Minister 
Junichiro Koizumi's visits to Yasukuni Shrine and the development 
of gas fields in the East China Sea. Given the circumstances, 
including speculation about Koizumi's successor, the situation 
surrounding the two countries is getting worse and worse. 
 
Chinese Foreign Minister Li Zhaoxing harshly criticized Koizumi's 
 
TOKYO 00001321  010 OF 011 
 
 
visits to the shrine, comparing them to worship of Hitler and the 
Nazis. Some observers take the view that China is trying to apply 
pressure to potential post-Koizumi candidates over the Yasukuni 
issue by stressing its uncompromising stance. 
 
Reacting sharply to Li's remarks, Foreign Ministry Administrative 
Vice Minister Shotaro Yachi tried to call in Ambassador to Japan 
Wang Yi to lodge a protest. But the ambassador suggested meeting 
Yachi on the following day, saying that he was busy. Yachi gave a 
negative response to Wang's proposal and talked with Wang by 
phone. Japanese officials have also reacted fiercely to China's 
response as "posing a problem in terms of diplomatic courtesy." 
 
On the development of gas fields, China proposed a plan to 
jointly develop an area near the Senkaku Islands that is 
effectively under the control of Japan. Many Japanese government 
officials have taken the proposal as provocative. Chief Cabinet 
Secretary Shinzo Abe expressed displeasure, saying: "China should 
 
SIPDIS 
come up with a more realistic proposal." 
 
In response, Beijing promptly launched a counterattack, with 
Foreign Ministry Spokesman Qin Gang assailing: "If Japan, in an 
attempt to divert our attention from the Yasukuni issue, tries to 
make use of the gas field issue, the issue will never be 
resolved." Given growing anti-Japanese sentiment in the nation, 
Qin thus indicated that China would never make concessions. 
 
A senior Foreign Ministry official commented on the strained 
Japan-China relations: "China is becoming overly nervous. It 
should make a response in a cool-headed manner." 
 
Late this month, representatives from seven groups, including the 
Japan-China Friendship Parliamentary Association, will visit 
Beijing to meet senior Chinese government officials. China has 
indicated plans to issue a document including measures to improve 
bilateral ties. It is unlikely, though, that both sides will be 
able to facilitate a thaw soon. 
 
(10) Submission of administrative reform bill to Diet; Battle 
between government and bureaucracy over specific items expected; 
Focus on basic policy guidelines on economic and fiscal 
management and structural reforms to be formulated in June 
 
NIHON KEIZAI (Page 2) (Slightly abridged) 
March 11, 2006 
 
The government on Mar. 10 adopted an administrative reform 
promotion bill at a cabinet meeting and submitted it to the Diet. 
Since the bill is intended to prevent Prime Minister Junichiro 
Koizumi's reform policy from being rolled back, the ruling camp 
is geared up to do its utmost for its enactment at an early date. 
At the same time, efforts to look into details of the proposed 
reform items, which had been put on the back burner at the stage 
of mapping out the bill, have also moved into high gear. 
Concerned government agencies have already launched a drive to 
water down the bill. With the inclusion of specifics of the 
legislation in the basic policy guidelines on economic and fiscal 
management and structural reforms to be compiled in June, the 
battle against the bureaucracy will move into high gear. 
 
Furious with reply 
 
The administrative reform legislation includes five key items: 
 
TOKYO 00001321  011 OF 011 
 
 
(1) the integration and reorganization of eight government- 
affiliated financial institutions; (2) a net reduction in the 
fixed number of public employees by more than 5% over five years; 
(3) heightened efficiency in 41 special accounts; (4) selling off 
assets held by the central and local governments; and (5) a 
review of the organizations and businesses of independent 
administrative agencies. 
 
The bill contains a reform policy, but specific measures to 
realize proposed reform items will be incorporated in the basic 
policy guidelines on economic and fiscal management and 
structural reforms to be compiled in June. The Administrative 
Reform Promotion Office, which directly reports to the prime 
minister, is concerned that bureaucrats will try to water down 
the bill at that stage. The main targets in the battle will 
likely be a net reduction in the number of public servants and 
reform of public financial institutions. 
 
The expert council for downsizing and streamlining administrative 
work, tasked with mapping out specific measures to cut back on 
the number of public servants, met on Mar. 10. Participants from 
the Ministry of Agriculture, Forestry, and Fisheries (MAFF) 
turned down the panel's request to reduce the number of ministry 
officials, upsetting panel members, including chairman Makoto 
Iida, supreme advisor to Secom. He urged, "Drastic reform of 
major services should be carried out from the general perspective 
of reform." The panel asked MAFF to come up with a reply in 
April. 
 
However, MAFF was not the only government agency that came up 
with a negative stance. The panel called for a net reduction in 
the number of officials in eight areas, including the MOFA 
Statistics Department; the Ministry of Land, Infrastructure, and 
Transport's (MLIT) Hokkaido Bureau; and the Justice Ministry's 
prison administration facilities. However, none of the 
secretariats of the concerned ministries positively responded to 
 
SIPDIS 
the requests. 
 
Some fear that the concerned ministry (Finance Ministry = MOF) 
will use a special kind of technique in opposing the proposed 
integration of government-affiliated financial institutions. The 
readjustment plan, which MOF's secretariat presented at a meeting 
of counselors of the Special Public Corporation Reform Promotion 
Head Office, included points that can interpreted as intended to 
water down the bill. 
 
For instance, in response to a proposal for abolishing the Japan 
Finance Corporation for Municipal Enterprises (JFCME), which is 
responsible for providing government funds to local governments, 
the readjustment plan proposed how best to secure the 
government's fiscal health. If a settlement were reached in the 
form of leaving the flow of government funds into the JFCME 
intact even after its abolition, the reform would not lead to 
fiscal reconstruction. It would be just a change in the name of 
the recipient of the funds to a local organization. 
 
Chairman Iida at a press conference expressed his determination 
to bulldoze his way through, saying: "The ongoing reform efforts 
are the greatest reform initiative in history. I expect fierce 
opposition, but what must be done must be done." The real battle 
against bureaucratic organizations is yet to come. 
 
SCHIEFFER