ARTICLES:

(1) Government plans to invite Chinese premier to visit Japan before July's G-8 Summit

YOMIURI (Page 1) (Full)

March 2, 2000

The Government yesterday determined to invite Chinese Premier Zhu Rongji to visit Japan before the Okinawa Summit (Group of Eight major industrialized economies summit conference) set in July

In an effort to reflect China's views in July's Okinawa Summit (Group of Eight major industrialized nations summit conference), the Government yesterday firmed up its policy intention to strive to realize a visit to Japan by Chinese Premier Zhu Rongji. This visit would occur following one by Foreign Minister Tang Jia Xuan in April and Foreign Minister Kono's China trip in May. China itself is negative about participating in the G-8 Summit as an observer or in any other status. In addition, reluctance [regarding such participation] is deep-seated among the G-8 countries. The Government's plan for now is to reflect as many as China's views in the upcoming Okinawa Summit by moving up the schedule of mutual visits by the foreign ministers and Premier Zhu's trip, which is expected later this year.

On the question of how to engage China in the Okinawa Summit, the Government is informally listening to views of other G-8 countries, but each country is negative about expanding the current framework to a G-9 on by adding China. China itself has declared it has no intention of participating in a G-9 no matter what its status would be, including that of an observer. The Japanese Government, as the host, has decided therefore to ask key Chinese officials for their requests and views prior to the Summit.

Premier Zhu is supposed to visit Japan this year, possibly timed to his attendance at the Asia-Europe Meeting (ASEM) that will occur in Seoul in October. But Japan will ask the Chinese side to reschedule his Japan trip to sometime in June or July before the G-8 Summit. The rescheduling of Premier Zhu's Japan trip will be coordinated by taking advantage of the mutual foreign minister visits. If it turns out that it will become difficult for him to realize a Japan visit before the G-8 Summit, the Government plans to give a prior briefing to China, as well as to listen to views from China that would be presented at the Okinawa Summit.

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(2) To ask for Premier Zhu's Japan visit before the G-8 Summit; Compromise plan for reflecting China's views in the Summit

YOMIURI (Page 4) (Full)

March 2, 2000

On the question of how to let China participate in the Group of Eight Summit this July, the Government has decided to bring about Chinese Premier Zhu Rongji's visit to Japan ahead of the Okinawa event. The reason for this compromise plan, which may yet come true, is the circumstance of Prime Minister Obuchi's being eager to invite China but China itself being reluctant to come.

United States Under Secretary of State Thomas Pickering, who came to Japan to coordinate agenda items for discussion at the upcoming Okinawa Summit, yesterday met with Liberal Democratic Party (LDP) Secretary General Mori at the U.S. Embassy at Akasaka in Tokyo. Touching on the matter, Pickering stated: "China is reluctant to become a participant at the G-8 Summit. In the case of Russia, its participation in the Summit brought about some problems later." He then added, "We can understand your consideration for China, but we think it also important for Japan as an Asian leader to hold meetings after the Summit to brief China, Indonesia, Australia, and the Republic of Korea.

Reportedly, at the G-8 meeting of bureau-director-level officials in charge of political affairs, held in Kyoto on January 28 to 29, no one proposed that China's participation be sought. The common view of the G-8 is: "China's participation would change the nature of the summit conference, which is based on the shared value of democracy."

China itself is also distinctly negative about participating in the summit conference.

On January 22 during a press briefing, Chinese Foreign Ministry spokesman Zhu Bang Zao formally declared his country had no intention to attend the upcoming G-8 Summit as an observer or in any status. He emphasized: "No organization can play the role of the United Nations and the UN Security Council (UNSC)."

The basis for China's foreign policy is to put emphasis on the UN and the nonaligned countries. So its stance is to keep a certain distance from the G-8 Summit that is regarded as a "club of major powers."

With these circumstances in mind, the Japanese Government has determined to follow a step for the summit host nation to listen to views from China.

In the past as well, just before the 1993 Tokyo Summit, Prime Minister Miyazawa met with Indonesian President Suharto so as to reflect, in the summit, views of the Nonaligned Nations Summit Conference chaired by the president.

However, in the case of China, it is negative about linking Premier Zhu's Japan visit to the Okinawa Summit, so there is yet no knowing of whether Premier Zhu's Japan visit will come true prior to the Okinawa Summit. Even if his Japan trip before the summit is realized, the question is how to reflect China's views in the summit. The host nation Japan is being put to the test.

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(3) Interview with Nobutaka Machimura, Assistant to the Prime Minister for Education Affairs; National conference to be launched later this month

YOMIURI (Page 4) (Full)

March 2, 2000

Former education minister Nobutaka Machimura was appointed prime ministerial assistant for education affairs yesterday. In an interview held later in the day with news media, including the Yomiuri Shimbun, the assistant revealed a plan to launch later this month a "national conference on education reform," which will be an advisory panel to Prime Minister Obuchi. At the same time, he showed a positive poise about the debate calling for a review of the Fundamentals of Education Law.

-- How do you view school education today?

Machimura: Education reform will not move forward without turning around principles that run through educational circles. Too much importance is attached to individual rights, whereas responsibilities and obligations are neglected. Children are measured mainly by memory. First of all, we need to reexamine such a value system.

-- When will the national conference on education reform be launched?

Machimura: Prime Minister Obuchi wants it before the G-8 education ministers' conference on April 1. I would like to establish it by late March.

-- How much time are you going to allow it?

Machimura: When I was an education minister, I used to instruct councils to produce conclusions in a year. I believe one year is enough for conferences of that sort.

-- What about members and themes of the panel?

Machimura: The Ad Hoc Council on Education (during the Nakasone Administration) seems to have had a wide range of people as its members. It seems that Prime Minister Obuchi wants to have members of a wider range. We cannot narrow down themes at this point. The Prime Minister has sent letters to more than 100 experts. We will consider based on their views with the bottom-up approach. He seems to have a critical mind about what's public and what's private.

-- Some are calling for a review of the Fundamentals of Education Law.

Machimura: Today when the Diet is about to discuss the Constitution, we just cannot leave the Education Law intact. The conference will discuss the Education Law as a matter of course. Then again, tinkering with the Education Law will not necessarily settle all the problems in education circles. The Ad Hoc Council on Education began discussions on the condition that it would not meddle with the Education Law. This time, there will be no restrictions, so members can discuss matters freely.

-- There are differences in views among the three ruling parties regarding a review of the Education Law.

Machimura: I am aware that the Jiyuto (Liberal Party) is eager to amend the Law and the New Komeito is somewhat circumspect. I think we can work out the differences one way or another.

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(4) China fleet activates maneuvers in neighboring waters; Purpose likely to check Japan, Taiwan

YOMIURI (Page 2) (Full)

March 2, 2000

A fleet of Chinese naval vessels is now activating its training exercises in a central area of the East China Sea within Japan's exclusive economic zone (EEZ) off the Senkaku islets (or Diaoyu in Chinese) that belong to Ishigaki City in Japan's southernmost island prefecture of Okinawa. Last year, a Chinese naval fleet lined up with newly introduced large-size vessels showed up in Japan's EEZ waters for the first time, and carried out training twice. On the 5^th of last month, a patrol plane of Maritime Self-Defense Force Fleet Air Wing 5 (headquartered at Naha) confirmed the Dongdiao 232, a Chinese missile tracking support ship, in the waters northwest of Amami Oshima Island. It was the first time the Self-Defense Forces have confirmed that ship.

The MSDF fleet air wing analyzes the moves of China: "China has now introduced large-size naval ships. We think it would be difficult to conduct training exercises in the waters off the coast of China, and that's why they came out into the middle of the East China Sea. Japan has been claiming territorial rights to the Senkaus, so they're probably trying to check Japan—and Taiwan."

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(5) Sparks flying between pro- and anti-deregulation groups, with revision of 3-year deregulation program approaching

ASAHI (Page 6) (Excerpt)

March 1, 2000

Tensions are growing between the pro- and anti-deregulation groups, with the Government scheduled to revise in late March its three-year deregulation program. Business circles, European countries and the United States are calling for speedy implementation of the deregulation program, contending that it is the only way to an economic recovery. In contrast, Liberal Democratic Party (LDP) lawmakers are poised to protect small businesses, with the next general election in mind. Prime Minister Obuchi remains awfully quiet even though he has declared, "Deregulation is extremely important." As usual, will the Government settle the matter in an ambiguous way?

[Hiroshi Samejima]

g Foreign pressure

Traditionally, the Government relies on "foreign pressure" in dealing with pressure from within Nagata-cho.

The Government's Regulation Reform Committee (chaired by Orix President Yoshihiko Miyauchi) --a panel consisting of business leaders and academics -- held a meeting on Feb. 8. Invited to the meeting were representatives of the United States, European Union (EU), Keidanren (Japan Federation of Economic Organizations), and Rengo (Japanese Trade Unions Confederation). In the meeting, guests inspired the committee's initiative:

"Promoting deregulation in an election year is difficult. We hope you will do your best." (Juul Jorgensen, EU Ambassador)

"NTT's interconnection charges should be lowered greatly." (Lawrence Greenwood, Economic Minister-Counselor, U.S. Embassy)

"Don't succumb to the adverse wind from political circles." (Norio Oga, Keidanren Vice Chairman)

"We do not think deregulation will worsen working conditions." (Hideaki Narikawa, Rengo Policy Bureau chief)

Late last year, the committee submitted to the Prime Minister a set of deregulation measures made up of 234 items. The Prime Minister promised to take them into account in revising the deregulation program. But meeting with a negative reaction from within the LDP, the Prime Minister's promise has now become less certain.

Under such circumstances, committee members met on Feb. 8 to solidify their logical foundation with the help of deregulation supporters.

g Movement running counter to policy direction

There exists an LDP Dietmen's league named the "Association for Revitalizing the Japanese Economy to Nurture Small Businesses." The group vocally calls for a review of the deregulation program in order to block an American-style economic system on behalf of small businesses that play a major role in Japanese culture. The group, chaired by LDP Administrative Reform Promotion Headquarters chief Kabun Muto, has a membership of over 160 – or 40 percent of the LDP members of both houses of the Diet. Secretary General Yoshiro Mori and Policy Research Council Chairman Shizuka Kamei are also members of the association.

Late last year, the group held a general meeting attended by representatives of various industries, such as liquor retail, taxi, hotel, and rice. With the next general election in mind, a mid-level member said in a strong tone, "I know we might be regarded as conservatives but we just cannot afford to ignore organizational votes of such industries."

The league takes aim at preserving regulations on the liquor retail and taxi industries. Specifically, the group intends to: (1) overturn the Cabinet's decision on abolishing the "standard distance" required in opening a new liquor store as of September 1, 2000 and the "standard population" as of September 1, 2003; and (2) to improve the system for allowing the Ministry of Transport to put the brakes on new entrants in the event the number of taxis grow excessively.

g Distrust

Touching on the LDP's movement against the Government's policy direction, Prime Minister Obuchi remarked in n a lower house plenary session on Feb. 9: "There has been no change in the Government's policy direction to push ahead with deregulation." With the Prime Minister under strong criticism for throwing the nation's finances deeper into debt, accomplishing structural reform by means of deregulation is essential in putting the economy back on a recovery track without making fiscal disbursements.

Yet, there have been no signs of leadership being displayed by Prime Minister Obuchi in dealing with individual deregulation measures.

Some incumbent Cabinet ministers, such as Education Minister Hirofumi Nakasone and Agriculture Minister Tokuichiro Tamazawa, are also on the list of the aforementioned LDP association that stands in the way of the deregulation program. "If the Prime Minister is determined to carry out deregulation, why is he continuing turning a blind eye to the anti-deregulation LDP members and Cabinet ministers?" a committee member said. Distrust is growing toward Prime Minister Obuchi.

Major points in second package of proposals compiled by the Regulation Reform Committee

· Eliminate the clause on railway, electricity, gas and other public-service businesses for exemption from application of the Antimonopoly Law.

· Treat electronic signatures in the same way as handwritten signatures and seals.

· Review "non-bank regulations" to allow customers to withdraw bank deposits by using non-bank CDs and ATMs.

· Consolidate a system enabling consumers to compare liquefied petroleum gas rates and services.

· Expand takeoff and landing slots of congested airports, such as Haneda and Itami airports.

· Raise light vehicles' and motorcycles' maximum speed on highways from 80 km/h to 100 km/h.

· Review the application of the Large-Scale Retain Store Location Law.

· Allow private-sector corporations to establish authorized day-care centers.

· Increase the number of tests to measure foreign students' Japanese language levels.

· Allow judicial scriveners, patent attorneys, and licensed tax accountants to carry out part of legal administrative work, which is now only allowed to lawyers.

Pro-deregulation

Yoshihiko Miyauchi, Chairman, Regulation Reform Committee: The Government has promised to respect the committee's view as much as possible, and I believer that will not reel, not even an inch. Implementing drastic reform is part of the Government's policy. It is regrettable that there has appeared a move in the ruling camp to review deregulation measures that were approved by the Cabinet. Our minds are one to pursue deregulation steadily. Deregulation is a crucial step to raise Japan's economic structure to the global level. Japan is lagging behind from the global trend. Japan's future will be dark in the 21st century if the Government further delays implementation of the deregulation program. (in a press conference on December 7, 1999)

Anti-deregulation

Kabun Muto, Chairman, Association for Revitalizing the Japanese Economy to Nurture Small Businesses: The Government should not implement deregulation in a way that will force traditional family businesses that stand on many years of hard work out of business. People not working hard are a different story. Protecting hardworking, small businesses is most important for Japan to continue to grow and to sustain its culture into the 21st century. We would like to urge the Government to avoid aiming at excessive deregulation on the liquor and taxi industries in revising its deregulation program in late March. (Executive meeting held on Feb. 17 by the Association for Revitalizing the Japanese Economy)

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(6) When will the Lower House be dissolved? Three possible scenarios

YOMIURI (Page 4) (Full)

March 2, 2000

The Upper House yesterday started deliberations on the fiscal 2000 budget, which has just cleared the Lower House. Lower-house members now can put more energy into their election campaigning. Prime Minister Obuchi is searching for the best timing for dissolving the Lower House to call a general election at some time after the Okinawa Summit (July 21 - 23). However, depending on the economic situation, there is a possible option of the Lower House being dissolved before the Summit. Recently, there also has cropped up the possibility of letting the incumbent lower-house members finish up their terms in the Diet. This newspaper looked at the probability of each scenario.

Scenario I: Voting day on June 4 -- if the ruling camp slackens, leaving Prime Minister Obuchi in the lurch

If Obuchi wants to dissolve the Lower House at the earliest possible day, he should do it after the fiscal 2000 budget passes the Diet in late March. He could then set the voting for April 23. Minshuto (Democratic Party of Japan) Secretary General Tsutomu Hata has stressed: "There is the possibility that the Lower House will be dissolved in March to call a general election in April." But, Obuchi told the latest meeting of party-heads that he would make a judgment on when to dissolve the Lower House only after bills related to the budget cleared the Diet. So, the option of carrying out the election on April 23 seems to have disappeared.

One option being considered is the Prime Minister dissolving the Lower House after the May consecutive holidays to conduct the election on June 4. However, Obuchi's concern would then be that if the three ruling parties did not well in the election, he would have to stand for re-election as prime minister. If so, the process would hinder preparations for a successful Okinawa Summit.

Scenario II: Election on September 10 after the Summit is the most likely

The most likely option is that Obuchi will convene an extraordinary Diet session after the August Bon Festival to dissolve the Diet and then call for an election on September 10. A senior New Komeito official said yesterday: "There is a view that we should liven up the domestic mood prior to the Sydney Olympics (Sep. 15 - Oct. 1). Another reason is that the Government's economic measures will not take effect until the summer.

Aiming at succeeding Prime Minister Obuchi, most members of the Kato and Yamasaki factions, the anti-mainstream group, take the view that the Summit should be his swan song.

There is also a possibility that the Summit will come in between the day when the Lower House is dissolved and election day. Aiming at taking a vote while the Summit is fresh in the people's memory, by extending about two weeks the current regular Diet session which expires on June 7, "Dissolving the Lower House on June 28, the voting day will be set on August 6" (LDP deputy secretary general). This option is now being talked about. However, there has been no such case of a lower-house election being carried out in the summer. The dominant view is that "it is not a wise idea that Japanese lawmakers be busy election campaigning before the Summit" (New Komeito leader).

Scenario III: Balloting on October 15 -- once in the past

Recently, the scenario of dissolving the Diet after the current Dietmembers finish up their terms has been in the spotlight. Besides Obuchi having mentioned this option, Secretary General Hiromu Nonaka also expressed his anticipation of such in a speech on the 27th. The reason: "In terms of boosting national prestige, dissolving the Diet after the Summit is the same as doing so after the Sydney Olympics" (New Komeito leader).

According to the Public Offices Election Law, the Cabinet can decide on the public announcement on the voting date and the date for balloting without dissolving the Lower House if the election takes place within 30 days before the terms of the incumbent lower-house members expire. If the voting day is set on September 19 or beyond, the election will be carried out after the expirations of their terms -- a possibility of the voting on October 15. Such case occurred only once in December 1976.

In case the terms of Dietmembers expire on the closing and opening days of a session of the Diet, based on the provision that "within 30 days after the session winds up," the possibility is strong that the voting will be conducted on November 12. Some are talking of the notion of dissolving the Diet on the day when the terms of the present lower-house members run out. In that case, the election should take place within 40 days after the expiration of the terms, "November 16, Sunday, would be good for the balloting" (Kono-led group senior member).

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