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DAILY SUMMARY OF JAPANESE PRESS

Friday, August 18, 2000

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INDEX:

(1) Transport Minister Morita forced to cancel his China visit, possibly due to China's opposition to his paying homage at Yasukuni Shrine

(2) Ishihara-watching column: "Public officials, too, have freedom of religion"; You say 20 percent oppose officials paying homage at Yasukuni Shrine? Is that so?

(3) China demarcates an oceanic research area in the East China Sea beyond the equidistant line; Readying itself for full-scale research on submarine resources, rendering the equidistant line a boundary in name only

(4) Prime Minister to leave for Southwest Asia on the 19th, focusing on nuclear disarmament; IT; Possibly motivated by desire to check China

(5) Japan-Singapore free trade agreement; Cooperation to cover financial services, IT as well; Joint study panel to shortly compile report

(6) Direct inward investments significantly up in April – June quarter, reaching half of the value of last fiscal year's

(7) What to do with the LDP? (Part 1): Junior members feel growing alarm about renewal of the party; Negative images -- "dirty" and "old" -- permeating among the people

(8) Studies of the premiership (Part 5 – conclusion): Performance to boost popularity and implementation of policies -- double-edged sword

(9) Rengo unable to get out of its present fix; Cooperation in election campaigns not appreciated; Gulf in views with Minshuto, a party which wants to run its own affairs

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ARTICLES:

(1) Transport Minister Morita forced to cancel his China visit, possibly due to China's opposition to his paying homage at Yasukuni Shrine

SANKEI (Top Play) (Lead Paragraph)

August 17, 2000

Transport Minister Hajime Morita had planned to visit China from September 6 in order to discuss with officials there such projects as the construction of a new bullet train. But it was learned today that the Chinese government has informed Japan it would not accept his visit to China. Today at noon, Prime Minister Yoshiro Mori acknowledged this fact. It is highly unusual that a Cabinet member's overseas trip is cancelled for the other side's reasons after the schedule was already fixed. In the background may be China's negative reaction to Transport Minister Morita's having paid official homage at Yasukuni Shrine on the 15th, the anniversary of the end of the Pacific War. The Yasukuni issue seems ready again to evolve into a bilateral diplomatic issue for both countries to deal with.

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(2) Ishihara-watching column: "Public officials, too, have freedom of religion"; You say 20 percent oppose officials paying homage at Yasukuni Shrine? Is that so?

TOKYO SHIMBUN (Page 26) (Full)

August 16, 2000

"You say there should be separation of church and state, but what is most important is that public officials, too, have basic human rights," said Tokyo Governor Shintaro Ishihara as he visited Yasukuni Shrine on the afternoon of the 15th to pay homage to the war dead. Many Cabinet members also visited the shrine that day before the governor. In the case of those visitors, they one by drove up in black limousines to the "arrival hall" of the shrine, and after walking 20 to 30 steps to the shrine, they entered the precincts after taking off their shoes. But Governor Ishihara was different. He left his car too far away from the shrine for reporters to recognize him and took the long walk into the precincts, amid the chirring of choruses of cicadas.

"He came here by official car but got out before it entered (the shrine precincts). He takes that kind of severe attitude," said the governor's special secretary for political affairs. Ishihara himself has often proclaimed: "I can't tell exactly what the difference is between official and unofficial (homage). I think it's time now to scrap that absurd distinction." But apparently his aide was paying close attention to all the little details.

After paying homage amid the clapping of the bereaved families who had gathered there, the Governor stressed to the reporters: "I paid homage as Governor Ishihara. Public officials also have freedom of religion. That's only right and fair." When asked by reporters whether he had offered a Tamagushi sprig of the sacred tree to the Shinto gods, he gave a wry smile, only telling them, "I forgot to make my money offering to the gods."

Asked about opposition to official homage, Ishihara said: "According to the information obtained by the Metropolitan Government Office, 80 percent of the people are in favor of official homage, while 20 percent are opposed. That is the reality. There are devious guys at work."

However, no public opinion polls and the like have been conducted since August 10, when the Governor indicated his plan to pay homage at the shrine today, according to the Metropolitan Government's policy office for public relations. But the office said that the Metropolitan Government as of the evening of the 14th received a total of 37 telephones, faxes and other messages about the matter, and of them, 28 (76 percent) indicated they favored paying official homage, while nine were opposed. The office reported this result to the Governor.

It is, however, questionable if the Metropolitan Government has enough data for the Governor to declare impressively that "80 percent favor [paying official homage]."

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TOKYO SHIMBUN (Top Play) (Full)

August 17, 2000

It was learned yesterday that last October and this April, the Chinese Government chartered a Norwegian geological research boat, the "Nordic Explorer" (3,816 tons), and demarcated an oceanic research zone in the East China Sea beyond China's side of the equidistant line between it and Japan. In this connection, China asked that Japanese vessels not navigate nearby. The aim is presumably to give a signal of its full-scale exploration, as well as to render the equidistant line a boundary in name only. The Defense Agency (JDA) has a strong interest in monitoring closely the movements of Chinese naval vessels that are frequently spotted in the waters around Japan, as well as activities of Chinese research boats in the future.

The Nordic Explorer is a submarine exploration vessel owned by a Norwegian shipping company. It engages in underwater research on request, working for various governments and oil companies.

The Chinese Government chartered the services of that ship for two months from last October. It also zoned part of the ocean area for exploration, the location being 300 kilometers northwest away from the main Okinawa island. The People's Liberation Army's Naval Headquarters then asked the Japan Coast Guard (JCG) to make sure that Japanese ships keep 5,000 meters away from the Nordic Explorer.

But about a third of the research zone set by China was within Japan's territorial waters stretching out from the equidistant line between the two countries. The next period of research started this April and lasted through July. China demarcated three new oceanic areas, two of which extended into Japanese territorial waters beyond China's side of the equidistant line. Chinese oceanic research vessels have navigated frequently in the Japanese waters crossing the equidistant line, but they have never given prior notice to Japan. It was thus highly unusual that the Chinese Government notified Japan of the oceanic areas it had designated for research.

The research areas demarcated by China cover the "Pinghu oil and gas fields," which are linked by a pipeline to Shanghai, as well as the drilling rigs, "Kanshen No. 3," which began operations last October. Exploring for underwater oil resources seems to be China's likely aim.

The Foreign Ministry's (MOFA) China and Mongolian Division twice asked the Chinese Government to explain its purpose and each time received the same answer that went: "We will not carry out research in Japanese waters." But China has yet to change the areas it had set for oceanic research. For this reason, JCG has given warnings to Japanese vessels sailing nearby.

This April, the same MOFA division pointed out to China that it was extending research beyond the equidistant line. China replied: "The official in charge of that has been replaced." The Nordic Explorer completed its research on July 1. "It seems that the ship did not operate in waters across the equidistant line," remarked the JCG and the Maritime Self-Defense Force (MSDF), but they have yet to confirm that fact.

The Chinese Government insists that the continental shelf stretching out from the Chinese mainland to the Nansei Islands (including Okinawa, Miyako and Ishigaki) is China's own oceanic area for research. Accordingly, it has not yet accepted the Japanese Government's position, namely, that Japan's exclusive economic zone (EEZ) extends to the equidistant line. It started exploration in the East China Sea in the 1970s. Since last year, Chinese naval vessels, together with its oceanic research ships, have been navigating in Japanese territorial waters.

Statement by Kyorin University Professor Shigeo Hiramatsu:

"The Foreign Ministry should have protested to China when it designated oceanic areas for research that intruded into Japanese waters.

"Kanshen No. 3 is very close to the equidistant line. What if China builds an oil and gas field within Japanese waters stretching out from the equidistant line? It would challenge our sovereignty."

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(4) Prime Minister to leave for Southwest Asia on the 19th, focusing on nuclear disarmament; IT; Possibly motivated by desire to check China

NIHON KEIZAI (Page 2) (Slightly abridged)

August 17, 2000

Prime Minister Yoshiro Mori will visit Bangladesh, Pakistan, India, and Nepal starting on the 19th. This will be the first tour of these Southwest Asian countries by a Japanese prime minister in 10 years. During meetings with Indian and Pakistani leaders, the Prime Minister will reiterate the need for those countries to sign the Comprehensive Test Ban Treaty (CTBT). In India, he will present economic exchange measures, focusing on the information technology (IT) sector. Having in mind Foreign Minister Yohei Kono's visit to China starting from the 28th, some government officials anticipate that stronger ties with India relations could be used by Japan as a card against China.

Challenge of improving relations with India, Pakistan

The Prime Minister will meet Pakistan Prime Minister Sharif on the 21st and Indian Prime Minister Vajpayee on the 23rd. In India, he will visit Bangalore to have a firsthand look at the actual state of the IT industry and deliver a speech in Delhi. Touched off by their nuclear tests in May 1998, relations with India and also with Pakistan have become strained. Attention is focused on how far the Prime Minister will be able to restore the relations during the tour.

The Prime Minister told reporters at his official resident yesterday:"India and Pakistan are countries that will play a major role in the world. Bearing this in mind, I will devote myself to improving the bilateral relationships."

The Prime Minister is ready to underscore Japan's diplomatic efforts for disarmament, beginning with the signing of CTBT, eyeing the United Nations Millennium Summit from September 6. Aides to the Prime Minister apparently hope that the tour will lead to giving the administration a boost.

After forcibly conducting the nuclear testing, the governments of India and Pakistan declared, "There is no need to carry out new testing for the time being." The scenario aides to the Prime Minister have envisioned is that if the two countries clearly indicate the stance of continuing the moratorium for nuclear testing, Japan will resume the now-suspended yen-loan program to each.

Exchange plan with India

For the Prime Minister, who brought the IT revolution into the agenda of the recent G-8 Summit in Okinawa, the idea of economic exchanges with India, which is defined as an advanced IT country, is attractive. In a study session yesterday at his official residence, the Prime Minister urged a senior official of the Foreign Ministry to work out specific measures, saying, "I hear the IT industry is significantly advanced in India."

The Foreign Ministry expects an improvement of Japan-India relations to have a favorable impact on somewhat sour relations between Japan and China as Chinese research vessels and naval ships have been frequently spotted near Japanese waters recently. China and India reached an agreement in May on measures to improve the bilateral relationship, but because China is still groping for a chance to advancing into the Indian Sea, some strains still remain between the two countries. "Efforts to cement Japan-India relations will serve to constrain China" (senior Foreign Ministry official).

Pressure growing in LDP

In contrast to the Government's enthusiasm, criticism of the Prime Minister's round of visits to Southeast Asia is growing in the Liberal Democratic Party. In Foreign Affairs Committee meetings, many members presented this kind of views: "Since no progress cannot be expected on the CTBT signing issue, Japan should not unilaterally take an approach that would result in underscoring a softening of our stance."

Regarding measures for the IT sector, the Foreign Ministry has been eager for financial cooperation for the construction of branch schools of the National Institute of Technology, a project being promoted by the Indian Government, its aim being to prevent a brain-drain of IT engineers leaving the country and end personnel shortages. But MITI has mapped out its own cooperation projects, such as a joint development of an electronic government system. With MITI's objection to the Foreign Ministry's request for its cooperation, the Prime Minister has now no choice but to present only private-sector IT exchanges measures.

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(5) Japan-Singapore free trade agreement; Cooperation to cover financial services, IT as well; Joint study panel to shortly compile report

YOMIURI (Page 9) (Full)

August 17, 2000

The joint business-government-academic study group that the governments of Japan and Singapore have established in a bid to sign a free trade agreement yesterday reached agreement in principle to propose that there is a need to expedite economic cooperation in the financial services and information technology (IT) sectors, as well. The group intends to include the new proposals in a report to be compiled in late August. The two governments are expected to launch negotiations in the fall on the specifics details of such an agreement, based on the proposals incorporated in that report.

The panel already share a common view that in order to liberalize trade in goods and services, it is necessary to lower or scrap tariffs and simplify customs clearance procedures.

At yesterday's meeting, it also was agreed to incorporate in the report a policy line of strengthening bilateral economic cooperation, particularly in the financial services and IT areas to fall in line with global economic trends, such as internationalization and increased use of computerized information.

Regarding the financial service area, the report would call for the simplification of procedures needed when simultaneously listing stocks on the Tokyo Stock Exchange and the Singapore Stock Exchange and the need for guidelines for unified rules on information disclosure. The bourses of the two countries have already inked an agreement for cooperation in promoting exchange of information. The panel's proposals are to further develop this agreement.

As to the IT sector, the report is expected to call for joint efforts to dismantle domestic regulations in conjunction with the spread of e-commerce, as well as to point out the need to ease conditions for the issuance of visas so exchange of competent personnel can be expedited.

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(6) Direct inward investments significantly up in April – June quarter, reaching half of the value of last fiscal year's

NIHON KEIZAI (Page 7) (Full)

August 17, 2000

Direct inward investments in Japan by foreign firms have been sharply increasing. According to a report compiled by the Finance Ministry, the amount of such investments in the April – June quarter in fiscal 2000 totaled 1,272.5 billion yen. This figure is 39.1 percent more than the same period in fiscal 1999, when direct inward investments hit a record high. This result is attributable to a series of purchases by foreign firms of failed financial institutions and merger and acquisition (M&A) cases in the information technology (IT)-related sectors. The trend is likely continue for a while.

The value of direct inward investments in fiscal 1999 reached 2,399.3 billion yen. Investments in the April – June period reached half of last fiscal year's annual level in value terms.