Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 07TOKYO5496, The Japan Economic Scope--December 7, 2007

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07TOKYO5496.
Reference ID Created Released Classification Origin
07TOKYO5496 2007-12-10 04:02 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tokyo
VZCZCXRO7379
RR RUEHFK RUEHNAG RUEHNH
DE RUEHKO #5496/01 3440402
ZNR UUUUU ZZH
R 100402Z DEC 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 0147
RUEAIIA/CIA WASHDC
INFO RUEHFR/AMEMBASSY PARIS 5865
RUEHFK/AMCONSUL FUKUOKA 4848
RUEHNAG/AMCONSUL NAGOYA 3593
RUEHNH/AMCONSUL NAHA 7247
RUEHOK/AMCONSUL OSAKA KOBE 8514
RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 07 TOKYO 005496 
 
SIPDIS 
 
PARIS PLEASE PASS TO USOECD 
STATE PLEASE PASS TO USTR 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD ECON JA ZO EAGR
SUBJECT: The Japan Economic Scope--December 7, 2007 
 
1. (U) This cable contains the Japan Economic Scope from 
December 7, 2007. 
 
2. (SBU) Table of Contents 
 
Bilateral Dialogs 
3.  Sub Cabinet Meetings Taking Place in Tokyo 
4.  Megaports Discussions Continue in Tokyo 
5.  Chukeiren Vice Chairman Frustrated With China; Favors FTA 
6.  Japan-China High-level Econ Dialogue Yields Minimal Results 
 
Health Issues 
7.  Embassy Concerned About Looming Changes to GOJ MedPharm 
Pricing Policies 
 
Farming and Agriculture 
8.  Furious Fukuoka Farmers Demand Subsidy Revival 
9.  Hokkaido Governor to Ask Local Legislature to Continue BSE 
Testing 
10. Shiga Exports Beef to U.S. 
 
Money Matters 
11. ConGen Econ Officer Promotes Investment and Economic 
Revitalization in Nara 
12. Tourism--Kyoto Popular Among Americans, but No Growth 
13. Restrictive City Planning Law for Large Retail Stores Went 
into Effect November 30 
14. FY07 Supplemental Budget Won't Break the Bank 
15. Kansai Manufacturers Face Hard Times; Bears Closing In 
16. Minister Amari Concerned About Foreign Participation in 
JPower Management 
 
Aviation 
17. American Air Cargo Company Looks at Chitose in Hokkaido as 
Transport Hub 
 
Oil and Gas 
18. GOJ Infighting Hampering East China Sea Talks 
19. INPEX's Questionable Oil Deal 
20. GOJ to Offset High Cost of Crude Oil 
 
Sporting News 
21. Baseball's Greatest Team Set for Tokyo Dome, Ambassador, 
Embassy Fans Will be There 
22. This Week's Cables 
 
----------------- 
BILATERAL DIALOGS 
----------------- 
 
3.  (SBU) Tokyo Sub Cabinet Meetings 
 
A six-agency Sub Cabinet team, led by Deputy National Security 
Advisor for Economic Affairs Dan Price met December 6-7 with 
their Japanese counterparts, headed by Deputy Foreign Minister 
Masaharu Kohno. 
 
The meetings covered a range of bilateral, regional and global 
issues, including climate change, Doha, development assistance, 
U.S. beef exports, and medical devices and pharmaceuticals. 
In conjunction with the visit, Price delivered a speech on U.S. 
--Japan economic relations at a function co-sponsored by the 
Japan Association of Corporate Executives (Keizai Doyukai) and 
the American Chamber of Commerce in Japan. (Econ: Nicholas 
Hill) 
 
4.  (SBU) Megaports Discussions Continue 
 
The GOJ continues to cogitate about Megaports, with comments to 
USG officials in the Sub Cabinet and Regulatory Reform 
dialogues indicating Japanese commitment to the program.  See 
Tokyo 5478 for details on the Megaports experts meeting Nov. 
28--30.  (ECON: Charlotte Crouch) 
Back to Top 
 
5.  (SBU) Chukeiren Vice Chairman Frustrated With China; Favors 
FTA 
 
Akira Yokoi, Vice Chairman of the Chukeiren and former Chairman 
of Toyota Industries, was very critical of China at a December 
4 meeting in Nagoya with visiting DAUSTR for Japan Michael 
Beeman.  Yokoi said that, while taking easier steps like 
 
TOKYO 00005496  002 OF 007 
 
 
lowering tariffs, China has ignored major commitments 
associated with its accession to the WTO including national 
treatment for foreign automakers and IPR obligations. The PRC's 
refusal to allow more than 50 percent ownership for foreign 
firms in the auto sector has hampered Toyota's efforts to fully 
introduce the Toyota Production System in China, he said. 
Yokoi acknowledged that dealing with China is extremely 
sensitive but said it would be a big mistake if Japan "keeps 
quiet." 
 
Yokoi said that, without a bilateral U.S.-Japan FTA, Japan's 
economic future would be dim, particularly in light of the 
growing web of intra-Asia trade agreements that threatens to 
shut out Japan.  Although Japanese automakers are wary of 
coming out too strongly in favor of an FTA that includes 
agriculture, Yokoi said, he understands the necessity of 
including all sectors and hopes there is enough political will 
in Tokyo to make it so.  (Nagoya:  Tamiki Mizuno) 
Back to Top 
 
6.  (SBU) Japan-China High-level Econ Dialogue Yields Minimal 
Results 
 
The first session of the Japan-China High-level Economic 
Dialogue (HED), Japan's version of the U.S.-China Strategic 
Economic Dialogue, produced little in the way of tangible 
results.   Held December 1 in Beijing, the meeting, attended by 
six Japanese Cabinet ministers, reviewed a number of areas for 
stronger cooperation between the two countries but without 
specifying any real activities.   A MOFA official who attended 
the talks noted Chinese approval of the Japanese Environment 
Ministry's "co-benefit approach" on pollution and global 
warming and the intention to establish an information sharing 
system on intellectual property violations in China as two of 
the HED's most substantive achievements.  The official also 
indicated the Japanese did not assent to China's request to be 
recognized as full market economy in the WTO.  A separate 
December 1 meeting between the Chinese and Japanese foreign 
ministers achieved no progress on the East China Sea dispute 
except to stress that both countries hoped to resolve the issue 
in the near future before Prime Minister Fukuda's expected trip 
to China (as yet unscheduled).  (ECON:  Chris Wurzel) 
 
------------- 
HEALTH ISSUES 
------------- 
 
7.  (SBU) Embassy Concerned About Looming Changes to GOJ 
MedPharm Pricing Policies 
 
The Embassy has raised concerns with the GOJ about the 
government's reimbursement pricing for medical devices and 
pharmaceuticals.  Final decisions on price levels for drugs and 
devices under the framework will be made in the coming days and 
is set to be announced on December 12. 
 
To encourage innovation in what is a rapidly growing sector, 
the United States has pushed for policies that create a fair 
and predictable reimbursement environment.  Some U.S. companies 
have complained that Japan's reimbursement policies are leading 
them not to introduce some of their best products into Japan. 
 
In particular the United States objects to a drug re-pricing 
policy based on market expansion--that is, a scheme under 
which the GOJ slashes the price it pays for some drugs when 
producers enjoy larger than expected growth in sales.  The 
policy penalizes the most widely recognized and innovative 
medicines for their success in treating disease. 
 
For medical devices, the U.S. has concerns about a foreign 
average price rule which caps reimbursement prices at 1.5 times 
the average price in the United States, Britain, France, and 
Germany for devices already on the market and two times the 
average for new devices.  The GOJ wants to slash the latter cap 
from 2.0 times to 1.7 times. 
 
   The Ambassador met with Health Minister Yoichi Masuzoe on 
December 5 to underscore U.S. concerns.  For more on that 
meeting, please see Tokyo 5471.  (Econ: Nicholas Hill) 
 
----------------------- 
FARMING AND AGRICULTURE 
 
TOKYO 00005496  003 OF 007 
 
 
----------------------- 
 
8.  (U) Furious Fukuoka Farmers Demand Subsidy Revival 
 
Calling for the revision of the government's farm subsidy 
system that caters only to large farms producing major staples 
such as rice and wheat, 3,700 local farmers converged on 
central Fukuoka on December 1.  A number of Fukuoka LDP Diet 
members, including Makoto Koga, Election Strategy Chief, 
attended the pre-demonstration rally in an effort to limit 
political fallout.  The demonstration was the largest so far by 
Fukuoka farmers. 
 
The demonstrators criticized the subsidy system (introduced in 
2007), claiming it has not been successful in assisting the 
large farms it was supposed to protect.  Instead, they insist, 
it has lead to a decline in farm incomes despite a good harvest 
year.  An estimated seven percent of small scale Fukuoka dairy 
farmers (183 households) have been forced out of business over 
the past year as a result of the rise in oil and feed prices. 
The farmers demanded redress against falling rice prices and 
the protection of Japanese agriculture in future free trade 
agreements. 
 
Note: Responding to pressure with an election on the horizon, 
the LDP recently announced plans to review its farm subsidy 
system, possibly revising it to include small scale farms in 
the fiscal 2007 supplementary budget.  Moreover, in a meeting 
with Fukuoka Prefectural Assembly leaders from the LDP, farmers 
explained the LDP was actively courting small farmers to bring 
them back to the LDP fold.  They claimed the defection to the 
DPJ by farmers in the recent Upper House election was a 
temporary reaction to the Koizumi reforms, but now that the LDP 
was addressing the farmers' concerns the defections could be 
reversed and the LDP's hold on the prefecture would be 
consolidated. (Fukuoka: Yuko Nagatomo/James Crow and Takafumi 
Sato/Margot Carrington) 
 
9.  (U) Hokkaido Governor to Ask Local Legislature to Continue 
BSE Testing 
 
Late last week, local newspapers headlined Hokkaido Governor 
Harumi Takahashi's decision to request funding from the 
Hokkaido Prefectural Assembly to pay for continued BSE testing 
on cattle 20 months and younger. She will ask the assembly to 
approve an additional 70 million Yen ($636,000) to cover the 
cost of testing 77,000 cattle 20 months and younger once the 
GOJ cuts off funding in July 2008.  Local analysts already 
predict a 50 billion Yen ($455 million) deficit in Hokkaido's 
budget next year; it is not clear where the money will come 
from. 
 
Unlike other beef producing prefectures in Japan, Governor 
Takahashi did not immediately call for local funding of BSE 
testing when the GOJ announced it would no longer fund the 
tests. Instead, the governor made several trips to Tokyo to 
appeal directly to the Ministry of Agriculture, Fisheries and 
Forestry and the Ministry of Health, Labor and Welfare for 
reconsideration.  With no success -- and other prefectures such 
as Miyazaki and Niigata stating they will fund continued 
testing -- the governor now feels compelled to do the same. 
Despite no proven scientific value to conducting BSE testing on 
all cattle, local Hokkaido residents seem to agree.  A Hokkaido 
Prefectural Government survey and discussions at recent public 
hearings show over 70 percent of local consumers support 
continued BSE testing. Local farmers also fear that without the 
tests, Hokkaido's beef will be perceived as unsafe. 
Hokkaido is Japan's top beef producer.  A total of 22 of 
Japan's 33 confirmed BSE cases were found in Hokkaido. A series 
of recent food scandals originating in Hokkaido has further 
shaken consumer confidence in local products. (Sapporo: Ian 
Hillman/Yumi Baba) 
 
10.  (U) Shiga Exports Beef to U.S. 
 
JA Shiga Headquarters has started to export "Ohmi Beef," Shiga 
Prefecture's well-known brand of beef, to the U.S. in a pilot 
project.  JA is targeting high-end American restaurants with a 
taste for prime Japanese beef.  Exports in the pilot total one 
ton of sirloin, rib, and another four cuts, destined for Los 
Angeles. 
 
 
TOKYO 00005496  004 OF 007 
 
 
The demand for Japanese beef in large cities such as New York 
and Los Angeles has increased after the exports from Japan 
resumed in 2005.  So far, Japan has exported 54 tons of its 
expensive beef since the resumption of trade.  JA Shiga expects 
to enhance the motivation of local livestock farmers and expand 
the market in the future.    (Osaka-Kobe: Phil Cummings/Naomi 
Shibui) 
 
------------- 
MONEY MATTERS 
------------- 
 
11.  (SBU) ConGen Econ Officer Promotes Investment and Economic 
Revitalization in Nara 
 
Osaka-Kobe Pol-Econ Officer spoke to 50 representatives of 
local political, business, media and Buddhist leaders on ways 
to revitalize the economy of Nara Prefecture at the Nara 
Chamber of Commerce and Industry this week.  Nara has begun to 
strengthen its business promotion strategy, a hallmark of new 
Governor Shogo Arai.  Both Nara City and the prefecture have 
pushed new tourist promotion campaigns, including plans to 
attract luxury American hotels to Nara.  The mayor already 
announced that it will bring a Marriott to open in the city 
center in a couple of years.  This stole the thunder from Gov. 
Arai, who had been working with ACCJ and METI Kinki Bureau to 
bring a different American hotel to the city, underlining 
continuing problems in convincing the different levels of 
bureaucracy to work together on economic development.  Nara is 
gearing up to the 2010 1300th anniversary of the establishment 
of Heijo-kyo, the ancient 8th Century Japanese capital 
predating Kyoto. 
 
Pol-Econ Officer pointed out problems with the poor tourist 
infrastructure in Nara, the small levels of FDI, and lack of 
cooperation among local governments and businesses, despite the 
abundance of tourism resources in Nara.  The reaction of local 
audience was very receptive to these messages, and Nara 
Prefectural officials commented that they will make use of 
these suggestions in improving their economic planning and 
coordination.    (Osaka-Kobe: Phil Cummings/Naomi Shibui) 
 
12.  (SBU) Tourism--Kyoto Popular Among Americans, but No 
Growth 
 
MLIT Kinki Transportation Bureau recently released the study of 
tourist trends in the Kansai for the first half of 2007.  It 
showed that 13.6 percent of tourists in Japan visited the 
Kansai's six prefectures, and 80 percent of those visitors stay 
in three prefectures:  Osaka, Kyoto, and Hyogo.  The largest 
number of the Kansai's foreign tourists is from South Korea, 
followed by Taiwan.  Tourists from the U.S. came in third. 
Amid the trend of rapid growth in Asian tourists visiting the 
region, American tourists still make up over a quarter (26 
percent) of the total foreigners who stay overnight in Kyoto, 
the largest group. 
 
This survey is the Kinki Transportation Bureau's first attempt 
to analyze lodging tourists rather than day travelers.  One 
official told ConGen that the Kansai has been successful in 
attracting Asian tourists, but attempts to lure American and 
European travelers remain problematic, since the GOJ's Western- 
oriented tourism promotion is still in its infancy.  American 
travelers love Kyoto, but their numbers are flat, according to 
the official.   (Osaka-Kobe: Phil Cummings/Naomi Shibui) 
Back to Top 
 
13.  (U) Restrictive City Planning Law for Large Retail Stores 
Went into Effect November 30 
 
The amended Town Planning Law went into effect on November 30. 
The law is expected to restrict new establishment of large 
retail stores and shopping malls in the suburbs, and it is 
aimed at revitalizing city centers by restricting the opening 
of commercial facilities with total floor spaces of more than 
10,000 sq. meters. 
 
According to Mainichi Shinbun, some retailers have already 
started coordinating with local governments over the opening of 
new stores, foreseeing the amendment of the law.  Retail 
industry is promoting a campaign to have the openings of large 
stores incorporated into local governments' development plans. 
 
TOKYO 00005496  005 OF 007 
 
 
(ECON:  Junko Nagahama) 
 
14.  (U) FY07 Supplemental Budget Won't Break the Bank 
 
Press reports indicate that the FY07 supplemental budget being 
compiled by the Ministry of Finance will be limited to about 
Q1.5 trillion ($14 billion).  This is quite small by 
supplemental budget standards, and is a good indication that 
the GOJ is aiming to stick to its fiscal consolidation goals, 
despite some spending to address income and regional 
disparities.  The supplemental will be finalized by MOF in mid- 
December, approved by the Cabinet in late December and 
submitted to the ordinary Diet session in January, 2008. 
Anticipated spending will cover disaster relief, Q150 billion 
to compensate for postponing the increase in medical payments 
by the elderly, additional aid for Afghanistan and UN programs, 
and possibly programs to support industries that have been hit 
hard by the oil price spike.  Finance Minister Nukaga told the 
press on December 5 that the government will not issue any 
additional bonds to pay for the supplemental, despite lower 
than expected tax revenues this fiscal year.  (FINATT: Maureen 
Grewe) 
 
15.  (SBU) Kansai Manufacturers Face Hard Times; Bears Closing 
In 
 
Most Kansai manufacturers have released closing accounts of the 
first half of JFY2007, April to September.  According to the 
recent Nikkei Kansai Edition survey, although the average 
profit level of Kansai businesses increased eight percent from 
the previous year, profits are slowing annually, decelerating 
from 23 percent growth in 2005-6, and falling below the 
national average.  Sharp, buoyed by LCD flat TV sales, dropped 
12 percent in its profit margins nonetheless.  In spite of 
increased sales, Matsushita (Panasonic) also fell back to 2006 
nominal profits.  Both companies blamed a drop in product 
demand in the U.S. market, the most competitive market for flat 
TVs, over the subprime loan problem and yen appreciation. 
Matsushita only reached 80 percent of its North American sales 
target. 
 
Rising oil prices strongly affected the textile, chemical, and 
food industries, strong sectors in the Kansai.  Most businesses 
in these industries shrank their profits over raising raw 
material costs.  BOJ's Osaka Head Masahiro Samejima commented 
to the Sankei Shimbun Osaka edition that Kansai businesses 
depend on the world economy, so it might be hard to return to 
last year's high levels of growth until the global economy 
recovers.  (Osaka-Kobe: Phil Cummings/Naomi Shibui) 
 
16.  (U) Minister Amari Concerned About Foreign Participation 
in JPower Management 
 
Japanese media reported on November 4 The Children's Investment 
Fund (TCI), a UK investment fund known for its aggressive 
shareholder rights activities, has demanded JPower appoint two 
TCI executives to its board as outside directors.  JPower, 
formally known as Electric Power Development Co., is the 
largest wholesale electric company in Japan.  TCI is JPower's 
largest shareholder, holding 9.9% of the company's stock. 
JPower executives acknowledged receipt of a letter from TCI, 
but declined to publicly release its contents. 
 
JPower was established as a state-owned company in 1952, but 
was privatized between 1997 and 2003, and listed on the Tokyo 
Stock Exchange in October 2004.  At a November 4 press 
conference, Economy, Trade and Investment Minister Akira Amari 
stated he "cannot imagine" a foreign investment fund being 
involved in the management of such a highly important and 
sensitive infrastructure company so vital to Japan's national 
security.  (ECON:  (ECON:  Eriko Marks) 
 
-------- 
AVIATION 
-------- 
 
17.  (SBU) American Air Cargo Company Looks at Chitose in 
Hokkaido as Transport Hub 
 
On December 1, a Hokkaido newspaper reported the Oregon-based 
air cargo company Evergreen is researching the possibility of 
developing a shipping route between the United States and China 
 
TOKYO 00005496  006 OF 007 
 
 
using Sapporo New Chitose International Airport.  The proposed 
route would fly cargo from New York through Anchorage to 
Chitose.  From Chitose, the airline would dispatch cargo to 
Shanghai and Hong Kong as well as other potential sites such as 
South Korea and Sakhalin, Russia.  Evergreen Chairman Delford 
Smith reportedly plans to visit Sapporo in mid-December to ask 
Hokkaido Governor Harumi Takahashi for her support. 
 
According to the article, Evergreen must overcome several 
obstacles before the proposed shipping route can be realized. 
Challenges include obtaining GOJ approval to fly from Hokkaido 
to China, South Korea and Russia; establishing a cargo hub to 
station smaller aircraft at Chitose airport for region-based 
flights; and securing bonded facilities and warehouses around 
Chitose.  In addition, conditions at Chitose airport itself 
must be improved to allow for late night flights and 
construction of a longer runway. 
 
ConGen Sapporo has not yet been able to confirm that formal 
talks on a shipping route through Hokkaido are underway. 
However, prominent Sapporo businessman Yoshiro Ito, who was 
mentioned in the article, told Consul General Welton in October 
that he had met with Evergreen during a recent trip to the 
United States.  Furthermore, Embassy Tokyo learned from MLIT 
International Aviation in November that Evergreen had asked 
Hokkaido airport authorities for permission to fly to China 
from Hokkaido. MLIT reportedly told Evergreen their request 
constitutes fifth freedom rights and would therefore have to be 
negotiated in government-to-government talks. 
Evergreen would not be the first American shipping company to 
propose utilizing Hokkaido as a gateway to China. In 2005, 
Federal Express tried to establish a similar route. That 
company's plans fell through after it was unable to obtain 
rights to fly from Chitose airport to other countries. 
(Sapporo: Ian Hillman/Yumi Baba) 
 
----------- 
OIL AND GAS 
----------- 
 
18.  (SBU) GOJ Infighting Hampering East China Sea Talks 
 
METI contacts told us that working-level negotiations regarding 
the dispute over East China Sea gas fields, which they 
previously called "a waste of time," have been positive over 
the last several months.  However, higher level talks remain at 
an impasse, presumably due to political pressures in Tokyo to 
maintain a hard line with the Chinese.  Please see Tokyo 5457 
for more on this issue.  (ECON:  Sally Behrhorst/Eriko Marks) 
 
19.  (SBU) INPEX's Questionable Oil Deal 
 
Japanese media report that INPEX Holdings, one of Japan's 
leading oil developers, will join forces with Canada's Ivanhoe 
Energy to explore for oil in the Qaiyarah oil field in Northern 
Iraq.  According to a METI contact, INPEX hopes to capitalize 
on Ivanhoe's proprietary technology which simplifies the 
processing of Iraq's "asphalt-like" heavy crude.  With total 
reserves estimated at 400-800 million barrels, daily production 
could reach 100,000 barrels if the venture is successful. 
Our contact told us, however, this deal is highly questionable 
given Ivanhoe's unproven technology claims and uncertain 
financial status.  "They don't have a single processing plant 
to prove their technology works," he said.  He demurred when 
asked to speculate why METI, which owns 30% of INPEX, would 
permit such an agreement.  (ECON:  Sally Behrhorst/Eriko Marks) 
 
20.  (U) GOJ to Offset High Cost of Crude Oil 
 
Nearly 90% of small and medium enterprises (SMEs) have been 
adversely affected by the soaring cost of crude oil according 
to a November 29 report released by the Ministry of Economy, 
Trade and Industry (METI).  In response, PM Fukuda on December 
4 instructed his cabinet to find ways to assist SMEs and 
citizens most impacted by the high prices.  Economic and Fiscal 
Policy Minister Hiroko Ota promised to study the issue and 
deliver recommendations the week of December 10.  According to 
media reports, possible approaches include reducing highway 
tolls, easing loan repayment terms for SMEs and providing 
subsidies for heating oil to households in northern Japan. 
Chief Cabinet Secretary Nobutaka Machimura has suggested a 
portion of the supplemental budget may be used to fund this 
 
TOKYO 00005496  007 OF 007 
 
 
program.  (ECON:  Sally Behrhorst/Eriko Marks) 
 
------------- 
SPORTING NEWS 
------------- 
 
21.  (U) Baseball's Greatest Team Set for Tokyo Dome, 
Ambassador, Embassy Fans Will be There 
 
The Boston Red Sox are coming to Tokyo along with the Oakland 
A's to open Major League Baseball's regular season on March 25 
and 26.  The Embassy has been offered the opportunity to 
purchase tickets and a group--including the Mission's chapter 
of Red Sox Nation--will be on hand. 
 
The arrival of the Red Sox in Tokyo will be an historic 
opportunity to see baseball's greatest team.  The Red Sox were 
Major League Baseball's first dynasty.  They won the first 
World Series ever played in 1903 and a number of other 
championships since then, including the most recent World 
Series.  The Red Sox include Japanese stars Daisuke Matsuzaka 
and Hideki Okajima. 
 
22.  (SBU) THIS WEEK'S CABLES 
5480  Japan: Undersecretary Level Consults 
5478 Megaports Creeps Forward 
5477  Taiwan, East China Sea Major Topics 
5476 Cuba: Japan's Response 
5475  Ambassador Urges HNS Deal Finalization 
5460  Burma NGO Letter 
5458  Japan and Vietnam Aim for Partnership 
5457 East China Sea Talks Hampered 
5456  Reactions to NIE 
5454 APEC Anti-Counterfeiting Health Products 
5407 Japan Considering Sectoral Targets 
5401 Climate Change 
5402  ASEA FTA Negotiations Complete 
 
23. (U) This SENSITIVE BUT UNCLASSIFIED e-newsletter from U.S. 
Embassy Tokyo's Economic Section, with contributions from the 
consulates, is for internal USG use only.  Please do not 
forward in whole or in part outside of the government.  The 
Scope is edited this week by Charlotte Crouch 
(CrouchCA@state.gov) and Joy Progar (ProgarJ@state.gov). 
Please visit the Tokyo Econ Intranet webpage for back issues of 
the Scope.  Apologies, this option is only available to State 
users.  Please contact Joy Progar if you are from a different 
agency and are interested in a back issue. 
SCHIEFFER