JPRS ID: 8313 TRANSLATIONS ON JAPAN

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JPRS L/83~3 ~
6 March 1979
~ ~
TRANSLATIONS ON JAPAN ~
CFOUO 6/79)
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JPR5 L/83~3
6 March ~.9 79 -
1'RANSLATIONS ON JAPAN =
(FOUO 6/79),
~
CONTENTS PAGE
� YOLITICAL AND SUCIOLOGICAL
'B~NGEI SHUN3U' Analyzes Dynamics of Ohira and TAnaka
(Ikuzo Ta~iri; 'BENGEI SHUNJU, 19 Feb 79) L -
'ASAHT' Urges Ohira Must Have Firm StraCegy for U.S. Visit
_ ~Editarial; ASAHI EVENING NEWS, 22 Feb.79)....,,,...,. 23
- 'DAILY YOMIURI' Advises Ohira on Proposed Visit to U.S.
(Editorial; THE DAILY YOMIURI, 24 Feb 79) 25
JCP Statement Denounces Invasion of Vietnam
(AKAHATA, 19 Feb 79) 27
- Fuwa Discusses JCP-CCP Relations in Report to JCF Plenum -
(AKAHATA, 12 Feb 79) 29
'MAINICHI' Welcomes Resumption of Seoul-Pyongyang Dialog
(Edttorial; MAINICHI SHIMBUN, 18 Feb 79j 31
ECONOMIC
'MAINICHI' Supports Ohira's Cuming Visit to United States
(Editorial; MAINICHI DAII,Y NEWS, 21 Feb 79)........... 33
Yen To Continue To Rise in 1979
(MAINICHI DAILY NEWS, 8 Feb 79) 35
MITI Officials Alarmed by the UncerCain PRC Market -
(BUNGEI SHUNJU, January 79) 36
Cold, Exchange Reserves Soar to New High
(THE DAILY YOMIURI, 3 Feb 79) S7 _
Business Recovers, Unemployment Still High
(MAINICHI DAILY NEWS, 6 Feb 79) ~g -
a- IrII - ASIA - 111 FOUO]
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rott o~'CICtAL U5E ONI.Y
GONT~NTS (Cnntinued) I'AGL
LCONOMIC
Priority Given Co Oil Supply Plans ~
(MAINICfII DAILY NEWS, 6 Feb 79) 60
Oil Conserv~Cion Likely tssue at Tokyo Summit
(ASAHI EVENING NEWS, 6 Feb 79) 61
Briefs
Engineers Overaeas 62
_ ~ January Exports _
' Spanish Steel Mill 62
~
-b-
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POLrTICAI, AND SOCIOLOCICAL
. 'BENGEI SHUNJU' ANALYZES DYNAMICS OF QHIRA AND TANAF~A
Tokyo BENG~I SHUNJU in Japanese 19 Feb 79 pp 124-i4i
(Article by Ikuzo Ta~i~ri: "The DynFUnLcs of Ah's, Ooh's and Okay's"]
[Text] 'fhe new Ohtra government is sometimes called
_ "Kakuei (Tanaka's shadow) Cabinet" or "Chokkaku (direct
Tr~naka) Cnbinet." Why did such influential fi~ures
with completely different personalities and nothing
in common, as between the reticent and the restless,
- the dull cow and the bulldozzr, the former bureaucrat
and the self-made, come to maintain close ties? If
- they are seeking benefits and political aims, what
can they be? A young ~ournalist analyzes the future _
o� the new government making a stormy start. ~
The Friendly Ties of "Daikaku" (Ohira and Tanaka)
"About 10 years ago in the mid-period of the Sato Cabinet, Masayoshi Ohira -
and Kakuei Tanaka on a Sunday wenC out to the Koganei Country Club in
Tokyo. During the game of golf, they paused and sat beneath a pine tree
and started singing the tune 'Sado Okesa.' I remember it vividly. Look-
ing at them, I felt that nothing can come between them to sever their
friendship."
- So said Rokusuke Tanaka (five-term member of the Lower House; aged 55),
- named chief. cabinet secretary last year end, in an emotional voice. He
cannot forget what he saw while making the rounds with the "daikaku" team.
- Tanaka described this episode a few days before his installation as chief
cabinet secrets~ry, but stories attesting to "daikaku" friendship could be
heard in virtually all segments of the political world.
But many politicians had turned down my request for details on the "daikaku"
ties, including Takeo Fukuda, Yasuhiro Nakasone, Susumu N,ikaido, Kiichi
Miyazawa, Ichiro Nakagawa and Ikko Kasuga... Fukuda, who was in a bitter !
race with Ohira during last year's political struggle, responded, "leave
me alone for awhile," while Nakasone likewise stated, "I wish to think
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things over �or a while." Miyazawa (through his secretary) s~id, "I know
- noChing of Mr Tanakn, f~r Ihave noC been associating ~aiCh him."
- YC wae interesting Co note ChaC responses varied, with some tn~.king wi11-
i,ngly, some hesiCatingly and some unwillingly. With respecC Co Che "dai-
k~ku" ties, Che political circles would assume a unique flexibility with
T~ngka's participation. Perhnps they are fearful of repercussions when
spealcing about "Tanaka," his name being deeply imbedded in the conscious-
ness of politicians. Mr Ohira himself, a party to the "daikaku" team,
had to speak falteringly.
During the 1 December 1978 press interview following his formal selec- ~
tlon as the new Liberal Democratic Party (LDP) president, Ohira, in a
, reply to another quesC3on, said: "I feel, expect and am confident that you
members of the Tanaka faction, as a respectable body, will r.gke prudent
- actions henceforth. This is no change in my personal relations with Mr
' Tanaka. However, I understand and he too is aware that I musC be moderate
in our Cies as a public official." `
Thus, Ohira stated in somewhat honorific terms his intent to separate his
public and private lives. He seemed to have deeply pondered over the
matter, including the choice of words--whether to use the word "prudence,"
"self-restraint" or others. An elder LDP Dietman, upon hearing Ohira's
statement, was deeply impressed: -
"Such an expression is the best he can do and is as far as he can go. In _
- Ohira's current position, he can only assume a toCal partisan posture."
A Tale of Government Takeover After 4 Ye.ars
Just when did such strange terms as "daikaku," "daifuku"(Ohira and Fukuda),
"kakufuku" (Tanaka and Fukuda), "fukuchu" (Fukuda and Nakasone) and "san-
puku" (Miki and Fukuda) become popular within political circles? There
was no such term as "ikesa war" in the eras of Hayato Ikeda and Eisaku
Sato. IC seems it all started about 6 years ago in the wake of the
~ "kakufuku war." =
Moreover, in "sankaku daifuku" (Miki, Tanaka, Ohira and Fukuda), it was
only in Tanaka's case that the character "kaku" from his given name was -
used. Perhaps this was the secre~ of the popularity of the condensed
- Eorms. "Denfuku" (Tanaka and Fukuda) and "Ohta" (Ohira and Tanaka~ may -
not have sounded correct. It can be stated, though far-fetched, that some-
thing fatalist~c pervades "kaku," alien to "sandaifuku" (Miki, Ohira and
rukuda) but still essential. In a political world "without kaku," mono-
tony would prevail. _
A government of "daikaku" was formed after a period of 4 years. When -
Tanaka forcibly wrested power from Sato in July 1972, he envisioned a
long-term government with Ohira as successor. However, the government
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r~keover thraugh the "clr~ik~ku" nlliance wns disrupted by the monet~ry out- -
1ay :tnc:ident ~nnd the Lnckheed i~sue, resulel.ng in the birth of intcr.im
Miki a?td rukudn governmene~. 'The explusion of "sanpulu" f:rom governmenC
is s~ld to have been due primarily to "kaku's" insCigariun.
Wieh the emergence of Che Oliira government, n page will have ~o be turned
in tt~e tale oE "daikaku." However, "kaku," a pnrty to "daikaku," is the
key performer in the Lockheed incidenC, a criminal defendant wiChout formal
LUP aEfiliaCion, and a 60-year-old wounded lion. Wi11 there be a restora-
tion ot "kaku," and a reemergence of "knku" government following Chose of
"snn" (M3ki), "fuku," (Fukuda) and "dai." (Ohira)? ThaC is Che main topic
of this research report.
1. Lineage of "Daikaku"
IniCial eies between "daikaku" developed afrer Ohira lefr the MinisCry of
Finance to successfully run for the Lower House from his ttative prefecture ~
of Kagawa, marking his entry into politics. Ohira was then 42, and Tanaka ~
was then a young 33-year-old Dietman. -
Kenji Manabe (one-term member of the Upper House; aged 43), Ohira's secre-
tary for 20 years or more unCil 2 years ago, looked back on those days:
"Mr Kaku came to Shikoku to provide supporC, but it was not ~usr an
ordinary support. He would cover every corner of the elector~l district
and deliver street speeches. He spent more time in the secorid Kagawa dis- -
trict than in his own. After Ohira was elected, the two had offices
next door to each other in the old Dietmen's Hall. I remem,ber that they
always called upon each other, as both were then without portfolio. -
"Mr Kaku would appear suddenly in my old man's office. He would talk con-
- stantly for 55 minutes out of an hour, with the old man, a good listener,
summing up Mr Kaku's conversation during the remaining 5 minutes. They
discussed noC only politics but also literature and many other sub3ects. -
They were of congenial disposition."
Fiowever, it was not simply congenial disposition on the part of Tanaka.
According to elder statesman Zentaro Kosaka (ex-foreign minister; 13-term
member of the Lower House: aged 66):
"As Pir Tanaka is a politician good in reading the future, he would draw
up a list of pramisiceg individuals in each ministry as a youth and extend
his support to them during elections. Mr Ohira probably was included
_ among them. As a newcomer, Mr Ohira was elated over the support. It
seems that their friendship grew from there on."
This was a period of turmoil. The Shigeru Yoshida government, then in
power, was forced into dissolution because of Yoshida's outcry of "fool"
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in rhe Uiee and Che ensuing shtpbuilding s~andal. In Che conservarive
politiCal circle, Che furor over Che conflict between Yoshida and HaCo-
yama was leadir~~ to the emergence of a ~oalieion. The inCimacy of "dai-
kaku" was to develop around Hayato Ikeda, the direce discipLe of Shigeru
' Yosh3da and tutor to Ohira. Kosaka, who wae foreign minisCer in the
firsC Ikeda Cabinet, cor_rA.n~.,ed to comment: -
"At the time of Yoshida's retiiremenr, Yr~shida's 13-man group met at the
home of Jo~i Hayashi to discuss the formation of the Liberal.Democratic
Party, bue Mr Sato, ~long wiCh Mr Yoshida, did noC 3o3n the new, conserva-
- tive coalition party. However, as Mr Tanaka i~ined the party together
with Ikeda, Masutani (Hi~e~i) and Hayashi, any distinction between Che
Ikeda and Sato factions was not yet posaible. Tanaka and Ohira were
~ atill inconspicuous in the days of the Yoshida Cabinet.
"With Sato and Tanaka as members, Mr Ikeda established the 'Heikokai' at
the present site of Ohira's off ice (5th floor, Nippon Shoztwave Broad- _
~ casting Ha11, 1-chome, Akasaka, Minato-ku, Tokyo). After SaCo formed
his facCion, Ikeda renamed it 'Ko~toikek~i.'� In brief, Tanaka initially
teamed up with the Ik.eda facCion, but later changed to the Sato faction.
After Ikeda came to be regarded as a prominent figure, Tanaka, havi.ng
aspirations, apparently decided to get closer to him.
"I do not know for sure, but it seems ~hat Tanaka used Ohira, who en3oyed
- the trusC of Sato, to get to know the latter, saying that he (Tanaka) was
a relative of Ohira's. I recall Ikeda as saying that 'Tanaka was a funny `
fellow. -
= Tanaka was very shrewd. After a change of government from Yoshida to
. Hatoyamo and to Kishi and the advent of a period of confrontation between
Ikeda and Sato, Tanaka formed ties with not one but with both of them.
IC was Ohira who prevented Tanaka from siding with the Ikeda faction.
Raizo Matsun~ (ex-minister of agriculture; 12-Cerm member of the Lower House;
aged 61), fornxer Sato faction staff inember, had this to say:
"Tanaka and Ohira became very close after Ik~~da, following a struggle with
Sato, was chosen as party president. Both Tanaka and Ohira attempted to
- support Ikeda, but as Tanaka belonged to the Sato faction, the latter
tried, rather, to prevent the rivalry between Sato and Ikeda."
The Security Treaty turbulence led to the downfall of the Kishi Cabinet
and in July 1960 an LDP convention was convened to pick a successor.
Ohira was placed in full charge to drum up support for Ikeda, but he was
still not fully expexienced, having only 8 years of experience as a Diet
member under Ikeda.
"Truthfully spe~king, I was bewildered and did not know where to begin,
as it was my first experience in Caking charge of a presidential election.
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- I Chen consulted Kakuei Tannka wlio, as a Sat�o fact�ion staff inember, had
a rol.e in Kighi'~ d~~feat in thF: past presidenCial election. Within 2 or =
3 dnys, I received several page:s of notes from T~naka. -
"They spelLed out policy guidel.ines on the presidential election, wiCh
specific n~eChods and l~ud~etary matters underscored in green and importanC ~
poinCs in red. I was appreciative of Tanaka's lcindness. With those notes
in hand, Y called on arad expla3.ned Co Ikeda, bur he was displeased, say-
ing, 'Don't spend ~ sin~;le yen.'
"I answered, 'Yes, I underaCand. I sha11 do my best to do as you say.
But I wish you would leave Chis electioi~ to us and not meddle in any
- manner,' and thnt is the way it worked out." ("My Personal History") -
The Tanaka notes contained a paissage suggesting a financi~?11y influenced
presidential election, causing ~[keda's displeasure. Twelve years later,
Chose same noCes were to be usedl for Tanaka himself. In any event, Che
support for Ikeda canstituCed the initial aCCempt of "daikaku" to take over
the country .
Two y ears hence, Tanaka would mal~:e his move when Ikeda came up for re-
- election. Tanaka, with experience as minister of posts and telecommunica- _
tions in the first Kishi Cabinet, then held the important position of LDP's
Policy Affairs Research Council cYaairman at a young age of 43. Tanaka per-
formed the ro~e of inediator, depen~3ing on whether Sato would attempt ro
thwart Ikeds's re-elecCion. Ultims~tely, however, Sato decided not to run.
According to the book "The Life and Death of Hayato Ikeda," by Masaya Ito,
Ikeda's noted secretary, "Kakuei Tanaka argued with Shigeru Hori from the
same Saro facti.on who championed the idea to fight it out. t~nd Tanaka
held Sato by the collar, trying to talk him out of running. What Tanaka _
had in mind is unc?.ear, but my feeling was that he did the right thing
and I secretly admired him for his efforts."
: It is unknown whether the collar grabbing episode actually occurred, but
there ~s no question that Tanaka had been contributing funds to Sato from
around this time and thus wielded a strong influence.
Nayato Ikeda's "Kakuei Concept"
Not so long aga, Tanaka, in an address castigating the bureaucrats, com-
mented, "Even Sato is really disgusting. Before coming into power, he
would listen quietly, out after assuming power, he would not speak to you
for about half a year. I cared for him, nonetheless. That is why his
Cabinet lasted nearly 8 years."
When viewed in this light, the collar grabbing incident may not be an
exaggeration. Evidently for his efforts in the re-election, Tanaka was
rewarded with the post of Minister of Finance in the second Ikeda Cabinet.
Ohira had backed him. According to Masaya Ito: -
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~Ott 4~~ICIAL U5~ tlt~fi~Y -
"Iked~ nnd I~tzyed at Nnkone tn wdrk nn eh~ C~bin~t ].ine-up. Iked~ would
- wglk back nnd ~orth in hig room ei1 dny long or come to my room, ~eil,ittg
Cd fnrmul~Ce ~ d~finire pl~n. On ehe night df Che third d~y, th~re wgg n
- phon~Gnll from dhir~, ggking for the prim~ minigter. IC g~em~d thgt dhire
w~~ ttgking that T~nak~ be given a pogition. Ikeda responded, `'~anaka ia a
- gnrt af ri~k~h~w m~n ~nd h~rge guide.' Suddenly, Iked~ turn~d td me r~nd `
g~id, '~~dn't you ehink ga'1 Com~ td phone ~nd te11 Ohirg go.' IC wg~
~mbgrrga~ing, bue I expreg~ed my ~r~nk opininn. Ohira ~~id m~ny ~hingg
- gnd wgnt~ed td speak ed the p~im~ miniseer gg~in.~. In degpergtinn, ~~aid
td Iked~., 'prime minister, don't think gbout gnything. Upon our reCUrn,
rt~~d (St~~iges~buro; eh~:~ chi~f gecret~ry) ~nd Ohirg will com~ up with
F,ameehin~g. p1e~~~ ~x~mine ehe r~~ultg ~nd eh~n r~ach a judgm~nC.'
"Upon rE~Curning td Shingnc~-chd (privge~ re~id~nce), w~ found Ohirg ~nd T~u~k~
w~iting fdr u~. Maeo gpp~~red lgter. ~vidently, g r~ntaCive egbineC line-
- up wgg cleCermined ~t thgt Cfine. Ohir~, withnut sgying a word, left with
n grim 1'gc~. The c~binet r~~huffl~ w~s geh~duled f~r the following day.
A~ word got nuC abouC Che proposed line-up, guepicion grew Cht?e Chief
Cgbin~t 5ecretary Ohira ~nd policy Affairs Itese~rch Council Chairman Tan~k~
were tr;ying.to win key posta by se~ling the mouths of party mpmberg. Kdnd
(Ichtro) ~nd Kawashima (Shojiro) filed protests, while Vice President Ohnd
~ reprimainded both qhir~ ~nd Tanaka and took the issue direct to Prime
Minister Ik~da. Turbulence prevailed~ _
Through Ikpda'g tena~ity gnd Chief Secretary M~eo's efforts, things pro-
gressed to the gCtestation stage, with Tanaka being named the minister ~f
finnnce ~nd Ohira th~ fore3~n minister. There ig nothin~ as diffieult ~g
cabinet reshuffle immediately gfter a pregidentixl electian. As the con-
science of both the mainstream and anti-mainscream are laid bare, any mis-
calculation would invariably create confusion. I felt that Ohira ignored
this and acted in an extreme manner, making a casualty out of Ikeda. It
was an nwful feeling in the heat af sungner."
In the words of Rokusuke Tan~ka:
"Chief Secretary Maeo had no intentians df m~king Tgnak~ the miniscer of
finance~. But Ohira backed Tangka fully. As ~ result, the relationship
- between~ Ohira and Maen d~teriorated..."
Thus, a legacy of confrontation existg between Maeo and Ohira, but for
Ohira, aho usually assumes a cautious behavior, he was extremely force-
Eul. In examining the"daikaku" relationship, the designatinn of Tanaka
as the fina~nce minister vas epochal. Thus, Tanaka Was handed his first
ticket on his ascent to prime ministership/presidency. Why Ohira chose
to push. Tanaka despite criticisms leveled at him (Ohira) remains a+mystery.
In any discussion of "daikaku," this Was brought up by nearly all politi-
cians. ~or inetance, Takeo Kimura (ex-minieter nf construction; 11-term
member oE the Lower House; aged 76), an vld timer in the Tanaka faction,
commented:
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~dK dr~tctnt, us~ ortL~
�
"At ttY~ 'time, some memberg of Che 5aCd f~ction queytioned 'how T~naka,
whc~ belnnged Co their fgCeidn, mangged to becom~ Iked~'s Cabin~t memb~r.' _
I regarded ~nnska thett a membet of Che Ikedn fnctiott. T'rdm Iked~'s
point nf vicw, 'I'angk~ w~g ~ ugeful m~n witih ~n ~bility to collect fund~.
The r~l't~eidnship between 'T~naka attd Ohir~ is a~turally b~sed cx~pnlitic~l
intereats, While per~onal friendship mny be invnlv~d, ChE1C ig nnly 1i~~
~~ug~ df gu~h politi~nl interegt~."
In ~he yeg ~f Itaizn Matguno,
"'1'nnnk~ ncted as ~n ~dhesive in ehe relationship betweett ehe 5ttto ~nd
Iked~ fnctiong. He wu~ gorC of ~ conduit. Such cases ~re frequently
nbserved in the politicnl wnrld. Mr 5~tn probgbly was m~king good uge
nf T~n~k~."
In ~hdrt, 'I'an~kn was ~nngidered invaluable by botti Iked~ and Snto, and
Ohir~ mnde it ensy for T~n~ka r.o move around, thus ~ccounting for the
common interests. _
Z. politicnl 5trntegy and Money
One view conc~rning their long relationship is that the two are attracted
to ench other, us Tannka is positive and Ohira is negative. A compnrison
of the personality of "daikaku" will be m~de later, but rhe negntive Ohira
has helped Tanc~ka out later on numerous nccasions.
In Mats~no's opininn of ~hira:
"In 3udo terma, Ohir~ is ~roficient at prone-position throw, while Tanaka
is udept at standing throw. Just by looking at his face, Ohira seems Co
be broadminded and practical as suggestive of the diill cow as he is some-
times calle~;, but inside, he is exacting. He plans t}~ings out and makes
convincing stutements. Also, he is a man of the world. Fukuda, on the
oCher hand, is a green boy."
A~imilar view was held by 5hunichi Fukuiye (four-term member of the
Lower Housc; aged 66), u clo~e friend of Ohir~'s and from thc ~~me home-
town:
. "I'eople from Iki inherently possess two traits. I know because I am also
From iki. One is that they eacel in strntegy, especi.ally those from the
~
eastern re~ion (lst electoral district) of Kagawa Prefecture. Such
- quality c~n be observed in Suehiro Nishio and Bukichi Miki, who hail from
this eastern region. People from the western region (2nd district) are
calculative and are planners, and think in a rational and precise man-
ner. I think Ohira is a typical Iki person who has both of these quali-
ties. Rather than being a dull cow, I believe he is one of the outstanding
politicians of this nge."
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_
_
~OIt O~~~CIAL U5~ ONLY
The view ChgC he ig g neg~eive ~tr~e~gist mgy be correce. Thig ig beCnu~e
quie~ ~ f~w pulieici~n~ hgve pnineed ~e Ohira'e digpnsiCion en regnrC to
m~chin~Cione. Th~ povernmenC Ch~ngpd hands from Ik~dg eo S~td nnd in
April 1971, dhirg relieved M~~d gnd eucceeded to ehe leggcy nf Ikedg eg
chairm~n of Krnc~ikelcgi, fr~rmally egtebliehing ehe nhirg f~ction. 5ome tend
tn ehink ehaC Ohir~ aC ehge eime hed definiC~ agpirgCions ed tgke dv~r rh~
cnuntry.
How~v~r~ the ~hangedver from Mgeo eo Ohirg w~s nee withoue probl~ms.
Ac~ording to Rokuguk~ T~ngk~, there w~g enmity, as previnusly described,
between the two over the forceful assumpeion of poge of finance minise~r
by Tanglcg, and for Ohirn, inCrg-�acCionnl etri�p w~s a new Ce~e of his
ability.
"Thig drgm~ di trgttsitidn ~ppe~r~d eo progregg ndrmglly on the gurfnc~,
buC human fe~ling ie noC as m~ch~nical. bup pgrtly Cn my lack of discre-
tion, Meeo's ~ttiCud~ toward me se~med to harden, and solid unity cnuld
not be eaCabliahed even within Konoik~kai." ("My Persdnal Nistory")
As Ohirg conc~cles, the igsue cnntittues to linger, wieh the Maeo problem
casting a shadow on Ohira even in the midst of the latest political strug-
gle. Lnet fall, Tanaka summoned Itokusuke Tanaka gnd advised:
"The Maeo matter is crucial. Ohira may be destroyed should Maeo ~ain the
group endorsing ~ukuda. A,stand of 'opposition to Ohirg' at the final
moment would be disastrous. Tell Ohira to take n~cess~r;a meegures."
~unds 5quandered During Presidential ~lection -
From around the time of formation of the Ohira facCion, rumors persisted
on the retirement of Sato, whoae government had lasted too long. "Daikaku"
xctivity over his successor gradually grew intense. For "daikaku," this
was the first mnjor hurdle.
The impression gained by Shun Hasegawa (ex-labor minister; eight-term
member of the Lower House; aged 66), member of the former Ishii faction
which had been maintaining some distance from "daikaku," was:
"I am not sure whether the purse is the same, but the friendship between
- the two, going back to the days o:' the Ikeda Cabiner, clearly surfaced
during [he 'kakufuku war,' becoming decisive during the Japan-China
iesue."
Thus, the "kakufuku" struggle was in fact a confrontation between "daikaku" -
and "fuku," which recently flared up anew.
The names of four figures--"~lnkaku daifuku"--surfaced at the 5 July 1972
presidential election held at Hibiya Auditorium, with "daikaku" voWing _
to help each other no matter who won.
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CdR tlH'F'ICIAI, U5C ONI,Y
'The r~~ules of the firsC count were:
K~kuei T~n~k~ 156 votes
'I'~k~o E'ukud~ 1S0 votey
M~gnyo~hi Ohir~~ 1nl voteq
T~keo Miki 69 v~ee~
With 'Tnnnka f~iling eo obt~in ~ m~3nrity, g run-off electinn wns held
betwe~n "k~kufuku," wieh the fnllowing resulrs:
Tt~n~lt~ 280 voCes
~ukuda 190 voCes
Whi1~ "kgku'~" vicCory w~s predicecd, the eyes of the p~rry were eurn~d
Co~oard Ohire's three digit figur~s. '~here bein~ more voteg Ch~n Ue-
fore, guspicions grew that Tan~ka may have given hix extra votes to
Ohira. ~rom Tnn~ka's viewpoine of leCting "Ohira eventually t~ke dver,"
it was important to establiah n track record of Ohira gaiciing more votes
Chnn Miki.
Those nround "daikaku" still deny that voees were ~plit Uetween "daikaku."
M~s~~h~7ru Gotodu (ex-direcCor, National Police Agency; one-term member of
the Lower Nouse; nged 64), ~ confidanC of Tgnaka's and former deputy ~
chief cabinet gecreCary in the Tanaka government, remarked:
"Ohirn waged n good b~ttle at thnt time. The Tunaka side misread the
b~llots. There never was a division df votes. The frantic efforts of
5uzuki (zenko) were responsible for such an outcome."
There are stories that the Ohira camp expected 170 votes, with Ohira
expreseing displeasure at the 101 votes he had received. Seirankai's
Koichi Hamada (three-term member of the Lower House; aged 59), who as a
Shiina faction-affiliated freshman Diet member voted for Tanaka, said:
"I did hear thnt Tannka sp1iC his votes with Ohira. That Tanaka was able
to do so in such an intense struggle shows that he is humanly great."
1~~lmada thus accepted [he diver~ion t}~eory. Knowledgeable Shunichi ~'ukuiye
also commented on Tanaka's monetary influence: '
"The w~~y in which Tanaka do~ed out money at t-~at time is remarkable.
With Noboru Takeshita, he probed the financial obligations of younger
members without regard to factional affiliation and paid off their debts.
t~e even paid for mahjong debts. Ohira's votes exceeded 100 1.ecause
Tanaka turned some of his over to him. The aim was to leave a bid for
Ohira as a presidential candidate."
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t~~Olt h~CICrAL U5C ONLY
= Single f~ur~~ Cnr "n~ikgku"
As menti~ned briefly by ~'ukuiye, Chis "knku~uku war" is ~1so notable for ~
th~ ~rndune nf m~ney ~qu~nd~r~d, unpr~cedpnted itt hi~Cory. It is generally
recngnixed in pnliticnl circl~g eh~C Che T~n~k~ C~mp's gedm~tric prngres-
~inn ~p~r~tinng bdosCed ehe priCe of n vote. Here, glso, was the root nf
the Tnngk~ monernry oi~tl~y incident.
There glsd ig talk eh~t Che purse of "dakkaku," which came in f3rse ~nd
third in the "knkufuku war," is cne and Che same, with each having a key
to Che gingle coffer. A passkey mgy be g sarcastic term, but there nre
viewe thnt "daiknku" is linked finaneiglly.
With rAspect to the finHncial conduit, zentero Kosaka, former chairman of
LUP'g ~in~ncigl Affairs Committee, commented:
"I think their conduits differ. Ohira, as Ikeda's secret~ry, used to
handle funda, later aesuming responsibility for Ikeda's financial conduit.
- 'fhnC was one reasnn for his dispute with Maeo. In any .event, Ohira has
an orthodox �action conduiC which he inheriCed from Ikeda; in oCher words,
l~e gets hia funds from the mainstream of financial circles. Tanaka seems
to be collecting on a broader scale, but boCh appenr Co be collecCing
from major businegs circles..."
Yet, some storiea carry a different nuance. Returning to the comments of
Shunichi ~ukuiye:
"Since the days of the Ikeda Cabinet, only Tanaka and Ohira had control
of Ikeda's conduit with financial circles. In the collection of funds, _
Tanaka's method was wild and involved vested interests. Ohira, on Che
other hgnd, preserved Che conduit with financial circles to which he had
succeeded. These are some of the differences, but I feel only Tanaka's
wild and indiscriminate meChods have risen to the surface in Che Lockheed
incident."
Masayoshi Ohira's Bewilderment
Because of such funds, Tanaka shortened the life of his government and
greatly disrupted the "daikaku" strategy. Toward the end of 1974 when
Tanaka retired from public life, no longer able to resist criticisms of
monetary outlays, Ohira made the following c~omment to reporters:
"~or us, it is a case of money receiving, but for Tanaka, it is money
making. Thnt is the point of difference. Perhaps I can be said to repre- _
sent n bit of the establishment." .
It is an Ohira-style expression containing many English words, but which
- discloses his true thoughts. He pointed to the difference between a
recipient who gets his funds automatically via the thick conduit linked
to the financial mainstream, with the self-procuring type who makes coun-
terfeit money frantically and takes risks. What Ohira wanted to say was
14
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I~'dIt Or~TCTAL US~ ONLY
that only ehe form~r png~essed the quelirie~ of ~ rul3ng C1~99, It yeems
Cd beur nut Ohir~'s uwkwnrd pnsitinn thnC he muse ke~p some diytnnce from ~
daddy 'I'nnuku. It could be that paychnlogic~l esCrgngement w~s nC Che
r.enitti nt this time b~Cweei~ "daikaku," but this will Ue discussed 1~Cer.
' Gning b~ck in eime, Ohir:~, ag fereign minister in ehe 'Tanaka C~bineC,
~chieved nC u stroke the normal:izuCiott of Jr~p~n-Chin~ diplomatic rel~-
tions. Ie prob~bly wgg the most monumental ta~k performed by "d~~kaku"
- itt a period of growing harmany in their alliance. This view war., st~~red
by Kazuo Shioya (four-term member of the Lower Nouse; aged 58), an
nuthoriCy on the Japan-Chin~ problem:
"Ae i se~ iC, their rel~tionship ~s st~unch friends began wiCh Cheir in- -
volvement in the J~pan-China proble~h. Ie seemed th~r Ohira w~s Che cen-
- trnl figure, ns Che promoCion of releCions between Japan and China which
he had advocated in the dnya of the Iked~t Cabinet had been temporaril;�
shelved under Che Snto Cabinpt. The reason for success of 'Japan-China'
t~lks was Tanakn's political foresight nnd Ohira's contemplaeive and
analy~ical ability.
"T}~e Eact is that Ohira was Che centr~l figure, with Tanaka becomittg en-
meshed. Bec~use of Chis achievement, Che Cies between the two got even
closer."
1
With regnrd Co this "Japan-China" issue, a major Copic in postwar diplo-
m~c~; credit goes noC only to Shioya but also to Ohira's leadership.
But dark days were to bef~ll Tanaka soon after. Vehemently criticized
for his monetary outlays, Tanaka's Cabinet fell after 2 years and 5
_ months (December 1974). Two years later, he was to be arrested as a
main figure in the Lockheed scandal (July 1976). With o~e party of
"daikaku" a criminal, the alliance was in a state of virtual dissolution.
What did Ohira do? Isaji Tanaka (13-term member of the Lower House; age
72), ~justice minister under the Tanaka Cabinet and chairman of the Lower
Nouse Investigative Special Committee on the Lockheed incidenC, had this
to say: _
_ "Ohir.y did not have anything to do with either monetary outlays or the
Lockheed scandal. What is clear is that he neither criticized nor
attacked Tanaka. He did not show any such attitude or even touch on
them. He was very cautious. Anyhow, he was in no position to speak
out..."
}lowever, it was not that clean, and it must have been an enormous blow for
Ohira. Ohira had to face the grave issue of whether a"Tanaka-less"
government can survive. I ima~in~ that Ohlra was greatly bewildered as to
whether he should "leave Tanaka" or endure it.
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~ Dut rnther Chnn "leuving Tnngkg," Ohira chose to remgin silent. Michin
Waennab~ (minigC~r of agricul~ure ~nd foresery; five-Cerm member of the
LowEr House; aged 55), a Nakasone faction warrior who ~oined the Cabinet
orgnnized last year end, expreesed his candid views as follows:
"Ohira seemed to have had no part in Tanaka's moneeary outlays; he ob-
served rhe siCuation carefully. It was the sgme in tha Locki~zed incident.
He neither meddled in or instigaeed it. It is h~rd for Ohira and his fac-
tion to act forcefully because many of Chem were former government offi-
cials. Evidently, the art of self-proCection which they learned while in
governmenC Cook precedence. In rhose days, it was Rokusuke Tanaka who
served as a conduit linked Co T~naka."
Tanaka (Itokusuke), now thaC Ohira is in power, chose his words carefully.
IC was c1~ar Chat he was standing up for Ohira.
"Ohira was astounded at the Cime. Such a problem occurred because Tanaka
tried to influence the peopl'e with money and ob~ects. In contrast, Ohira
was assured of funds through connections established during his days at
!iitotsubashi University and bequesCs from Ikeda. At least, Ohira has no
. vested interests. This point differs from Tanaka.
"The reason that Ohira did not say a word during the monetary outlay isaue -
- was not to cover up for Tanaka. Ohira did not Calk in keeping with his -
duty to protect secrets. H~ was in no position to say anyChing during
the Lockheed incident."
Ohira was the finance miniater during both incidents. Watanabe's view-
poinC about the art of self-protection may be close to the truth, but it
is not that simple. The reason that Ohira chose to remain silenC was
because of the dual aspects of fear and hope in Tanaka's youth and power.
Thus, for Ohira, "leaving Tanaka" posed a risky ~udgment.
"MoneyaTanaka; Power=0hira"
In such a manner, the "daikaku" alliance continued, paving th~ way for the
birth of the Ohira government. But Ohira's destiny was ~o drag "Tanaka's
shadow" with him.
In the midst of last year's presideatial election, Tanaka's support organi- -
aation, the Etsuzankai Headquarters, in its publicaCion "Monthly Etsuzan,"
(1 November 1978 issue) carried a special feature titled, "Tanaka Faction
Moves Toward Full Support--Mr Ohira Coming Up Fast." A passage reads:
"Then Chief Ca~inet Secretary Ohira's friendship toward Mr Tanaka did
not change even after the latter left the government and encountered hard- _
ships. While many people changed attitudes abruptly, Mr Ohira continued
to remain on friendly terms as before. That attests to the solidity of
their friendship and the deep loyalty of the chief secretary."
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roR o~~icr~, usc ornY ~
The n~Cicle went on to s~y rh~t Tanaka, leading the lArgest ~nd atrongesC
'1'~nn~Cr~ Cnrps in Che pnrCy, was indeed Japan's "king maker," concluding
th~t ~~hira probably would become a greae premier, hard to find theae
dnye.
I~erhaps th~s articLe, most likely reviewed by Tanaka prior to publica-
tion, was inCended Co show appreciaCion to Ohira for keeping silent.
However, Kazuo 5hioya is inclined Co believe thaC Ohira was the one who
suffered as a result of Tanaka's influence-buying practices:
"If the rerm influence-buying ia applied to both Ohira and Tanaka, it
would be: money=Tanaka, and power~Ohira. A1so, when Chiiiking in terms -
of "daikaku" ties, some questions come Co mind. In other wcrds, wiCh
what sorC of power did Ohira condone Tanaka's actious? When viewing past
incidents in this light, their relationship may become samewhat clearer.
~ "For insCance, at the Cime of the Kim Dae Jung incident, there was talk
o� 'some 500 million yen' involving Tanaka. Tanaka at the time was prim~
minister and Ohira was foreign minister. If the rumors were tru~, did
Ohira, siCting atop the diplomatic window, c:ondone it or was he really
un~ware of Che situation? This is an interesCing point.
"Where there is smoke, it usually is around Tanaka, not around Ohira. On
a stage, it is difficult to differenCiate 'daikaku,' the star performer,
from the black-cloChed assisCanCs. In my opinion, Tanaka appears to be
on the losing end. I Chink Ohira is the perpetrator of the intellectual
crime."
The Shioya theory strikes at the heart of "daikaku" relationship, but may
not tell the whole picture. There may be some unique relationship of
mutual aid wherein debts and credits, losses and profits are considered,
and "differences of position" are recognized. It may be called a division
of roles.
3. Analysis of Their Nature
Finally, Ohira ascended to the summit, but behind the timetable of take-
over that Ohira had formulated at the time his faction was organized. But
when viewing only the events that transpired just before he attained the
- goal, it seems that he took over without much difficulty. In either
_ ca~e, the "kaku" influence prevailed. _
The souring of Fukuda's reelection plans and Ohira's unexpected victory
have been analyzed and discussed in detail, but thel~y point remains un-
known. This is because the real nature of the mammoth group of 155 mil-
lion LDP members and friends is vague and obsc~re. What is clear, however,
is thut it was not a victory by "dai" over "fuku," but through the com-
bined efforts of "daikaku."
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- Mnsah~ru Goeoda, who w~s responsible for Che key Tokyo elecCion campnign '
at T~~naka's direction, told Che inside story:
"'~he Ohir~ faction's fighting sCrength was weak because ies membera were
mostlv former bureaucraCs. It was around mid-November that ehe T~naka
facCion, cenCered around Nishimura (Eiichi) and Nikaido (Susuemu), thrust
its full support. Nishimura issued most of the insCrucCions. He would
ask, 'How many votes can your side garner?,' and ag~in toward the end,
"You're sure of x number of votes?' We did not hear from Tanaka. He
probably passed instructions down to Nishimura.
"The Tanaka facCion felt that sho~ld Ohira come in second in the large _
voCing diatricts of Tokyo, 5aitama and Hokkaido, iC would consCitute an
_ upset victory. If he did noe, Ohira would sCill come in second by a mar-
gin of from 50 to 100 votes. ElecCions require legwork and sweaC. Eu- _
phoria over media forecasCs and neglect of election campaigns wili naturally
- end in defeat."
Tanaka maintained his command posts at his private residence at 1-chome,
Me~irodai, Bunkyo-ku and at his office in Itopia Hirakawa-cho building
at 2-chome, tiirakawa-cho, Chiyoda-ku. He may have lefC everything up Co
Gotoda, but ie said to have made constant phone calls from early mnrning.
Tanaka prepared detailed notes similar to those he gave Co Ohira about 20
years ag~ support of Ikeda. They contained the secrets of Che king
' maker.
He summoned the staff inembers of ~he Ohira faction one by one and encour-
aged them. According to Rokus~uke Tanaka: ~
"This is what he told me. 'In an election, it is to slash or be slashed.
The enemy and the friendly forces should be differentiated. The Ohira
faction seems to lack a sense of seriousness. Tell Zenko Suzuki of this
right away.' After I told Mr Suzuki about it, Suzuki immediately went to _
see Tanaka. Mr Kuniyostii Saito also called on Tanaka on several occasiens."
At any rate, the 'Panaka faction moved desperately. For the opposition
_ camp, it was strange and ominous.
Four Similarities -
The reaction of Fukuda's faction's Shunichi Fukuiye was:
"Tanaka allegedly intended to pursue the abdication line. In other words, _
Fukuda would run things until the Tokyo summit, at which time Ohira would
take over. At the parley with Kishi (Shinsuke), Tanaka reportedly responded,
'I understand.' Fukuda would come in first and Ohira second, with the
latter garnering enough votes to befit a succeeding president.
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Yc~t ~ cllilrn c~rimi~ lii f Irf~t, ~~nn~r~~ry tc~ rxpc~crcitlo~ir~. 'I'I~IH wnw hac:uuN~~ ol'
'I'iuuik~i'~~liuH~dc~w's disenye, which cannot be checked once it becomes aggra-
vc~tpd.''~~is is rhe case wiCh Yoko NagttCa of Che AL1ied Red Army and with
HiC1er. Ohce Che motor sC~rCs, it cannot be sCopped, After speeding, Che
ou~come was inevitable.
"To Che bait thaC wa~ tossed in, there were many bites. The reyulCs that
money had produced were beyond Tanaka's imagination. Many fisti took Che
- bait as k'uk~~da's reelection would have meanC a possible dissolution in
J~nuary, Co be followed by unified, 1oc~1 elections. The last eime thaC
Tanak~ had squandered money was during Che 'kakufuku war' in 1972. Because
oE the l~rge number of bites, Tanaka gained fu11 confidence."
This view did not miss the mark, for during the climax of the primttry elec-
tion, even those within the Tanaka faction, such as Shin Kanamaru,~who
opposed any "daifuku" conflict, began to harbur susp3cions of Tanaka's
_ behavior. Kanamaru sounded a biCter note;
"T.andka has changed. I don't know why. He becomes wild and loses a sense
of balance. There is no one to speak out against him. I would like to
see someone appear who can do ~ust that..."
Whether or not the story of Basedow's disease is true, it is too si~ple
- to pin the birth of the Ohira Cabinet on that alone.
- Why was Tanaka so active? Many stories say that Tanaka was motivated by
_ his sense of gambling. That may be partly true, but he also made deep
financial considerations. The analysis by Kazuo Shioya on the nature of
"dnikaku" furnishes much insight. In comparing "daikaku," many points
have been cited, but according to Shioya, the similarities are:
- a. Have endured hardships and excel in grasping the mass psychology.
b. Highly calculative, without running toward ideology or principles. -
c. Possess a clear vision.
d. Covet power.
"The two are resolved not to fire empty shots. Ohira looks far beyond be-
fore taking a move, while Tanaka fires round after round like a shotgun
without wasting a shot. That is why 'daikaku,' despite a varying view on
many issues, reach the same opinion and conclusion in many cases.
"Ti~ey both possess a clear vision. Tanaka is inclined to take a risk, while
Ohira is more cautious. In other words, Tanaka feels 'there is nothing
to lose by taking a risk,' while Ohira feels 'failure is natural.' They
both a~ree in not placing excessive expectations. This indeed is their
strength." -
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,
rox o~~zczn~, usc ornY ~
~ Thus, Chere Are financial considerations, a sen~e of resignaCion and
_ covetousness. 5hioya thus perceivas tihe strengCh of "daikaku" to be
ba~ed on such qualiCies to cope in ehe polirical world.
If Tnnaka, with his sense of "nothing Co lose by taking a risk," an~
Ohira, with his sense of "failt:re is natural," had acted in unison in '
- the recent siCuation, Fukuda, with his optimistic outlook, would not -
have stood n chance. The mystery of Tanaka's reckless moves would have
_ b een unraveled.
4. Will Kakuei Tanaka Be Restored to Power?
The final topic evolves around the issue of Kakuei Tanaka's resCoration
to power. In Chis case, iC may be better. to separately consider Che ques- :
tion of his poliCical comeback and about "resCorati.~n of power" blooming
into a Tanaka governmenC.
Some of the things Tanaka has been saying to LDP members visiting his
= Me~irodai home have come to be taken as recent Tanaka quotations. For
example:
"I wi11 not~become a politically-affiliated businessman. I wish to retiurn
to politics. I will make a frontal attack toward that end." "I shall
_ settle the Lockheed incident with my own power. Two more years...I am `
confident Chat I will be r~cquitted. At the mosC, a violation of the
Foreign Exchange Law."
On the longevity of the Ohira government, he said, "probably 3 or 4 years."
He has become more talkative than before. This change was noted last year _
around the Cime the presidential election b ecame overheated.
_ It is unclear whether he is seeking a mere comeback or is aiming at a take-
over, but there are strong indications that he is giving serious thought
to succeeding "dai." His declarations about a frontal atCack suggest this.
Takeo Kimura, an elder member of the Tanaka faction, was more explicit:
"There being no one to succeed Ohira, there can only be restoration of
power for Tanaka. Though Miyazawa, Nakason~ and Komoto have been men-
tioned, they are all minors and lackthe qualities o` a prime minister/
president. Tanaka is currently working for an acquittal in the Lockheed
trial, but to a politician, the outcome is unimportant. The essence is
the power relationship. It would end with the reinstatement of Tanaka
into the LDP."
The views of Kimura, however, represent a minority opinion, with most
being skeptical. They are, rather, disinclined to assume any definite
stand. Some reactions on the possibility of a Tanaka government with
Ohira government as a springboard are described below.
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ruture 0utlnok c~f "bn1.k,~ku" Relr~tionshir
- "T'hat ig h~~ed to say. It h~s noChing ro do with the formation of Ohira
- government. If there is, it would be ~ust a nsychological marter.,.in -
an optim~.sti,: sense. That's because ~r is a court and ,judiciAl problem."
(Zentaro K~saka)
"It is difficulC to say at Che moment. In any evenC, Tanaka is helpless
until the triaL is over. It all comes after Che trtal ends." (Michio
Watanabej
"Nothing like that is on the minds of either Ohit-~~ or 'Tanaka. However, we
are not agalnst Tanaka being reinstated as soon as possible. The issue
_ revolves 1round making Ohira a springboard..." (Rokusuke 'fanaka) `
Ttie phrase, "making a springboard" as used in the queQtioti seemed to bother
everyone. I~owever, how the "daikaku" relationship wiLl proceed hereafter
can only be discussed in rerms of Tanaka's rei.nstitution, with Che Ohira -
~ government as springboard. And the immediate interest would be how Ohira
would reACt.
Or~ly Isa;}i Tannka clearly expressed his v; ~s on Ohira:
"Ohira will not ~ump at such a story. Without question, there is friend-
ship ~2tween the two, but that and politics are disCinct matters. Ohira ~
is tu11y aware of personal and pubiic interests. Ohira does not have to
take instructions from or consulC Tanaka. If something did come down f rom
Tanaka, Ohira would probably consider it but wi11 make his own judgment.
Ohira is the type of person who could do so without worry."
That, according to Tanaka (Isa~i), is because he is a confident, dauntless
individual. At a public event, Ohira called for "prudence" on the part of
Tanaka and his faction. But what is the ob~ect of prudence? Said Gotoda:
"It is a fact that the Tanaka faction felt some displeasure over the naming
of cabinet ministers last year. However, the prevailing feeling at th e
top is that they should sit back for now. It is a wait-and-see attitude
~ust now."
It is true that the Tanaka faction, usually quite fussy on personnel
matters, has recently assumed a moderate stand. P~rhaps, in response to
Ohira's de~ires, Tanaka is now trying to lessen the "kakuei" impact.
tiowever, should Ohira decide to "leave kaku," wou13 Tanaka sit idly by?
While there have been many arguments over "leaving kaku," mo~t felt that
Ohira would not. Only Watanabe stated:
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!~'tlIt dH'~tCIAL U~~ hNLY
"L~uvr. 'knku'7 `Chne'~ pog~ible. Ohira endured it, perhap~, until he
brr.nmc prime miniHter/prr.~ident. Naw, he haq ~tt~in~d wh~~t he gought~
'I'hc c~uevtldn i~ wliether he Cttm m~intain hiq relgtionship with Tanak~~
Wordg like 'chokkraku' hnd 'k~kuei' are being 1ev~led at ttim. ~t ig pdg~
~ible th~t Ohir~, ~g prime minigter, will g~ver his tie~."
W~tnn~be thus take~ ~n nffirmdtive ~oaition, ~ut htg view~ ~~e ndt +~dn~-
vin~ing. M~t~unn'~ fol].owing apinion ig of interegt:
"Ohir~ mdst likely will tnke ~ mode~ate ~ttitude toward ~'anaka as an indi-
vidunl, but will h~ve to give geric~us thoughtg to the 'Tanalta faceinn~
' Ohir~ wi11 ndt l~nvp 'kdku' fnrg while. Nis heart m~y be unmov~ble but
not hig pogition, ~ugt ~g Che ~un'g r~ys refr~ct on w~ter... ~ven the
- r~l.ntionship hetwe~n Ohira nnd 'Tan~lc~ ig ~h~nge~ble, dn~ce nne moveg up to
bECnmc prime minigt~r."
A differ~~~tiation of one'g Crue mind from his po~itivn ig thinkable~ Gon~
gid~ring thnt a deep rel~tionghip with "kaku" exigt~ throughout Ohira'g -
_ political life, Ohira cannet "le~ve 'k~ku boldly, ~g ~ aron~ move aould
dig ~ gr~ve for hig g~v~rnment.
5hould the government bage begin to tremble, Tangka unquestionably Will
tnke the neces~ary move~. In gome are~g~ he m~y turn rescuer in demon-
strntion of "daik~ku" ties, but if the government start~ panting for bre~th,
how would e~ch member of the "dnikaku" glliance think ~nd act7
~or ohira, it wauld mean ~~loaing af thp curt~in where he must end his
political carecr with a cle~n slnte, and fnr 'Canaka, in his ~ixtieg, the
last chance to stage a comeback. tJe will th~n have a rtin~l l~c~k at the _
exCended "daikaku" allianc~
Whether or not to lend a hand in Tanaka's r~instatement Will be up to
Ohira, Tanaka's long-cime friend. But there could be a do~mfall of
"daikaku" even before tt~en.
COYYRICN'C: Bungei Shun~u Ltd. 1979
9097
C50: 4I05
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~d~ ~x~i~~nr, u~~ ortLY
I'dLt~'tCAL ANi~ SUt~lc)LOGI~AL
~A5lWt' t31tG~5 UNIt2A MU5T NAV~ ~tltM 5TE2A'~~GY ~'tlft U.5. VISI'T
~'okyo A5AHI ~V~NING N~5 in ~n~ligh 22 ~eb y9 p 2 OW
~
~~ditorial: "Uttt~~'~ U~5. Vfgit"J
C'Pext] Prime Minigter Magayoghi Ohira, Who is raee among Japattege prime
Ministera in that he Was unenthusfastie about a"5ankin-Kot.~i" (a Warlord'g
nl~ernate=~eax reaid~n~e itt ~dd) type vigit to Washingtott, hag reCently
13stened t~ adviCe from varidug people ~nd h~s more or legs decided to
visit the Uttited 5t~tes early in May.
C~ntaCts betWeen the top leaders of the ts~o countries could help resolve
the ten~e trade relations between J~pan ~nd the U.5. We gre not nppc~g~d
t~ tt~ig meeting, but in vieW nf the situaeion ~nd Uhira's foreigtt polfcy,
We would like tv point nut that hig vi~it tr~ the Uttited 5t~teg mu~t be
aCCOmpanted by congider~ble gelf-ex~minatinn, detcrminati~n and pr+~par~tinn.
We aattt ohira fir~t of all to refleCt on hoa fhig situ~tion ha~~ come $bout.
The di~satisfge[ions and anger of congres~ With America's huge trade deficit
with Japan and the closed nature of the Japanese roarket have been accurately
and re~eatedly relayed through diplomatic channels, by the media and by
vfsitorg during [he p~st feW months. This is not neas first braught back
to Japan by government repregentgtive Takeshi Yasukat+a.
So ~:~r the 01~irb ~dministr~tion hag enly s~bdlished the post of Minister
f~~r t.xternnl E:conornic Kelations, and prdClnimed th~t att~inment di the
acven percent economfc groweh rgte is impossibl~. Ohirg g~id in his
pnlicy ypeech that "good eare aill be tak~n of Japanese thing~." The Ohira
philogophy df "not saying I c~n do it When I~an't nnd only those things
t can do" ig an honegt ~ttitude in n~ense. But it cannot be denied th~t
he h~a given the impre~sion boch dnm~stically and internationally that h~
ha~ ndt udequately done what he can do despite the facc that he hn~ att~?ined
political pnaer.
~or ingtance~ hoa well has Ohira utilized the good fortune [hat Americgn
Ambnggador Mike Mnnsfield, whose dpinions are resp~cted by th~ Whice Nou~e
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~dtt d? ~tCIAL iJS~ ONLY
and Cdn~reg~, ig ~t~tioned in 'I'okyo7 51~ouldn't he f~~l ~~h~med tn ~ay at
tttii~ latE~ hdut~ ttiat Ijr "keenly ~eelg the need fdr und~r~t~nding between
Jgpan and tt~e United St~te~7"
If there l~ el~e J~~a?t~se type thinking aittiin nhira's ~eeling th~t "thp
United St:dt~g wtll Itelp t~e ~~ve f~Ce if I gn gn far as to vigit the
UniEed 51:ntegi" he ai11 Ue ~arnng. Wliat the United States wants now aYe
d~finite gtepg ta gnlve the ~cdnnmic ~risig, ndt ednfirm~tinn d~ "Jgp~n-
U.S. ~rfE~ndghip~" if O~iir~ digplt~y~ hig 1ead~~ship in ~reating the ~on=
gen~ug ff?r fhe int~rn~eidngiix~tidn n~ J~p~n, there is no need fnr him tn
travel ~'t1 the aay to W~gtiingt~n~ .
Of cour~~~, the Americ~n argumene h~,~ ieg ~r~akneggeg. It wants tu blame ~
all itg uwn trdubleg dn otherg. Ag fnr ieg gt~nd tdW~rd Jgp~tn, migunder-
~6~nding~ ~nd "d~liber~te migunder~t~ndingg," which ~11dw ttidge p~int~
dig~dv~tttnge~u~ to it~~l~ ta he i$ttd~'ed dre noticeable. ~n drder to cdunter
~uch argumentg, J~p~n must egtabli~h g recdrd o~ having done wh~t it ~ou1d
do ~ttd tn~i~t pre~ent the logie attd persu~sivene~g ac~ept~ble to ~urope~ns
and rlmer:tcang. If posgible, Ohirg ghould meet members nf ~;c~ngregg ~nd
~durn~li~~ts ~g well U.5. Gnvernment le~der~ attd ~hduld have the drive
and sens~~ to hit back when ne~egg~~y.
F'rnnkl~?;;peaking, hnW~ver, Uhird doegn't nppear to be p~rticul~rly ndept
nt this. In the nrient there m~y be people who undergr~nd his attitude,
which the gympgthetic reg~rd gg prdEnund ~nd the critical cnll g1oW in
copin~ With ~h~rip,e~. But dhir~'s respdnses c~nnot be eomprehended in the
United St~C~g Which cott~idcrs that government involv~s "challenging pdssi-
bilitieg." Actu~lly, tfie mor~ Ohira t~lkg with !?m~riCan 1e~d~rg, the risk
rises eh~t he Wi11 erouse dig~pp~intment.
If ohira visits the United States, v~rious circles Wi11 probably utilize
the oppoxtunity to present exc~ssive demands. If he should accept Chem in
~n unguarded moment, his visit will really become a"Sankin-Kotai" type -
thing. if he should reJect the dem~nds in an inexpert m~nner, he could
pogsibly stir up a hbrnet's ne~t end heighten American distrust of J~pan.
In this genge, l~is U.5. trip afll be full of risks, so Ohira must realize
thut a~ ldng ~g he is going, he must have a firm actitude ~nd strategy or
tl~e visit ~du1d be narmFul.
4ltiat fills ~hirn's mind nov i~ probubly that he Wants to suc~essfully
conclude t1~e gummit roeceing of advanced nations to bc held in Tokyo in
June ~nd rh~t, for this purpose, he Wants to improve economic relation~
utth the Uttited Stntes. But as lting as the prime minist~r of the country
fs vigit:tng the United 5tat~s, they ghould not just discuss bilateral
trade, but stinuld also exchange opinions on Asia and the Middle ~st from -
the long��range viexpoint.
CSO: 41~!0
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I~Uit CiN'CtCtAG U~N: hNLY
1~Ot,I'TICAL ANll 5dCtdLOGtCAL
- ' bAILY YOMIUtt~' A~VIS~S OHIttA ON pttOpO5~U VISIT TO U.5.
Tokyo UAILY YOMIUItI in ~ttglish ~4 ~eb 79 p x OW
[~ditdri~l: "Uhir~'~ W~sliingtnn Migginn"~
('CQxt] ~'rime Minieter Ohirc~ has himgelf g~id he intends to pay U.5.
['regident Carter g vigit in ~ m~~snth or two td imprnve communicgtions be-
tween ,iap~n nnd the U.S. ~C ig nearly three mdnths since Ohira ggsumed
hig nffice. But hig policies ~re gti11 n~t sufficiently undergtood, far
less gppreci~t~d, gbro~d b~egug~ he hgg ~n far been cnneerned primarily
with domegtic que~tinng l~gving foreign r~laCinng in rhe cgre of bure~u-
cr~ts.
At hame, evgryone knowg Ohira is very different from his predecegsor T~ken
~ukud~. He is muCh less severe on trade problems underlined by President
Cgrter.
'I'here ar~ twd ~gpects of Japan-U.5. trnde dispute. One is basically eco-
nomic while the oth~r relates to trade liberalization. The first can ttot
possit~ly be helped since it almost entirely arises~ from American misunder-
standing or lack of understanding. But with regard to the second J~ipan
i~as no other way but to keep talking to the U.S.
Oi~ir~, it may be said, is easy-Roing. He is optimistic ahout resolution
nE tradc problem~ at officials' level. Naturally, the U.5. resents thig
nnd ha:; finally roused him tn reality.
Ti~e U.S. Cdvernment wnuld no longer allow Ohira his "wait and see" palicy.
But hi~ policy is not totally wrong. Onlyr he would not tackle the problem
t~imself. Unless he is gufficiently eager himself to resolve the issu~ his
planned W~shington talks and subsequent Tokyo summit might noC achieve much
guccess.
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~Ott d~'~ICIAL US~ dNLY
`Thr~~ t~nint~
!le 1~~~ r~ hgv~ n~trdng pergdn~l urge tn dd gdm~thin~ definitiv~e en -
Cnnvince th~ U.5~ th~t ndt ~l.l Ameri~~n gri~v~n~eg ar~ ~neir~ly vglid. -
In hig ~dming m~eting with C~rter he ~hduld b~egr in mind Chree pdintg~
~'irgt, t~e mu~e elimin~ee ~11 c~u~c~~ nf Ampri~~n impressinn eh~e J~p~n~ge -
m~rkpt ig cing~d~ `The U.S. get~ mogt nf ieg fgl~p impreg~inn ~bnuC
J~p~n~ge mgrk~C frdm ~uch J~p~n~gc prdcurem~aC p~li~i~~ gg df Nippon T~1~-
gr~ph ~ttd ~el~phdn~,publiG Corpdr~Ciott (NTT). ~hi~ ~ieu~eidn hgg eo be
~d~'~'~Ctgd.
SeCdnd, ttie U.~. mugt be ~onvincingly ~xplgined Jgpan'g policy ~nd meagures
tn ~drr~~t paymenC~ imbnlgnc~. U.5. ~gr~~m~nt Cn thi~ mugt be obCgin~d.
Third ~nd 'lagt, pxch~n~e o~ viewg b~ewe~n t?im nnd Cerr~r mugC f~nilitgte
d~termin~tinn df 3nint Jgp~n-U.5. regpdn~ibiliey far p~~ce ~nd security
in Asig ng w~11 ~s fdr finding ~~oluCidn to ehe world energy and econnmic
crige~.
CSO: 4120 -
26 ~
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~OCt O~~~CIAL U5~ dNLY
I'OLITICAL ANn SdCtOLCIGICAL
JCp 5TAT~M~NT U~NOUNC~5 INVA520N dF' VI~TNAM
makyo AKANA~A in Jgp~nege 19 ~pb 79 p 1 OW
[ArCicle by Japgn CommunigC ['~rCy CenCral Committee pregidium, 18 ~ebrugry~
[Text~ Hundreds nf thnus~ttdg of Chinese troops l~uttched a lnrge-ac~1e
inv~sion into Vietnamese terriCory gcross the entire 1,000-km pltC-SitV
border on t}ie evening of 16 ~ebruary and Che early mnrning of 17 ~ebru~ry.
On Che evening nf 17 rebruary Che 5itV Government sc~Chingly denounced Che
w~r o� aggreeginn lnunched by Chinn againsC Vietnam and appealed Co Che
whole world tn protest the Chinese act of aggression.
Ct~inn is trying to ~usCify the milit~ry aasault by calling iC a"self-
defensive counterattack." BuC it is crygtal clear ehgC China ieself is
tl~c aggregsor who ha~ launched gn invasion by throwing a large number of
artillery, tank and fighter aircraft units across the entire length of the
border. Ttiis hag been confirmed by Che correspondenC of AKAHATA, nur party's
official paper. China is using precisely the same aggressive Caceic of
refusing to hold a dialog and resorting to arms to setCle disputes as the _
defunct Pol PoC regime used itt attacking Vietnam with Chinese support.
~urthermore, the Chinese argument abouC "punishment"---as our parCy previously
firmly poinCed out while commenting on Deng Xiaoping's staCement in Tol:yo--
_ is ~ t~egemonist utterance made on the assumption that China is judge o~ the
world. It constitutes a wanton challenge to peace in Asia and the wotrld and
tl~e sovcreignty of various nations. It reveals the aggressive and hegemonist
natur~ ~f. Cl~inn which is bent upon resorting to arms to subjugate other
nations. Such an utterance clearly contradicts the pledge, in the Japan-
Ctiina peace and friendship treaty, of each country "not seeking hegemony."
Tl~e latest Chinese attack on socialisC Vietnam not only threatens peace in
Asia and the world but also undermines the prestige of socialism. In fact
it hns notliing to do with socialism. In the name of world peace and the
people's right to self-determination, and in the name of the cause of
socialism, our party sternly condemns this act of aggression which tramples
upon all principles of international law, including the UN Charter.
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Uur purty ~ernn~ly demnndg ehnt Ching immedi~r~ly ~enp ~11 itg aCt~ df
gggr~~ginn ~nd in~t~tttly withdr~w a11 ie~ erdapg frnm Vi~ett~m, i~gues nut-
~C~nding beeween the ewo Cnuneri~g, including th~ b~rd~r digpuCe, shnuld be
. getel~d ehrc~ugh p~gCeful negoeigCinns withoue recour~e tq armed fnrce.
nur pgrCy ~Crnngly e~11g dn Ch~ Gdvernmenr nf J~p~n Co t~kQ Chi~ pogiCinn
and to demand that the Chinese Govern~n~nr stup ieg nggr~ggi~tt. Our p~rty
~l~n v~h~menrly C~11g on d~mncr~eic fdree~ in Jnpgn td 1nunGh ~n urgent
G~mp~ign to build up publin opinion ea oppo~e Ching'~ ~Ge of gggreggidn ~nd
eo demgnd ehge tih~ Ch~nege sid~ r~turn eo th~ prdper ~egnd of g~eking a
pe~ceful getClemenC Cn the di~puCe.
- Our party algo nppe~lg Co Che UN Security CnunciL gg well ~g a11 ~dvern-
ment~ nnd all fnrc~~ chgmpioning world Xr~~Ce and Che principle nf nation~l
g~lf-~~terminnCinn Co tnk~ ~ffective m~agur~~ Ca halt Che gce of aggressidn
by Chin~.
COPYRIGHT: A k~hnta, Tokyo, 1979
CSO: 4105
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~OIt d~~'ICIAL U5G ONLY
pULITICAL ANU SOCIOLOGICAL
~UWA UI5CU55~5 JCp-CCI' It~LATY0N5 IN R~POttT TO JCP PL~NUM
Tokyo AKAHATA in Japanege 12 ~eb 79 p 8 OW
("Summary" nf tihe work r~porC delivered by 'Teegu~aburo ~'uwa, chief of
t;~e JCI' Spcr~Cnri~t, at Che 6~ebru~ry openittg ~e~sion of the Sixth JCI'
Centr~l CommiGCee plenum gt party hegdquarCers in Tokyn]
(Cxcerpt] Our Pnrty's Clear Und~rstnndittg on TnCernational Problems
dur p~rty hns aleo carried ouC remarkable aceivities to expose Che cdrrup-
Cion ~f plutocracy, including the Douglas and Grumman payoff scandals, a
currenC major poliCical issue in Japatt. The resulCs of Che invesCigation
of these cases in the United SCates by the team of our party'g bietmen
alone suffices to illustrate our successes in Chese acCivities. In a number
of international problems which have become ma~or political issues, the
correctnesa of our parCy's position and its farsightedness have been aub-
stanCiated by a myriad of facts.
Our parCy's principled stand dominated the Diet debaCe on the Japan-China
Peace and Friendship Tregty. It is an undeniable fact that our party -
thwarted the attempC in some quarters to wind up the debate in a prefunc-
tory and ceremonious manner and channeled it in the direction of probing
the real issues in Sino-Japanese relations. Thus we made the government
recognize thaC China's call Co the Japanese people for armed struggle and
China's reEusal to admit Japan Communist I'arty [J~P] officials as members
oE municipal and other oCficial delegations to China constituted acts of
interEerence contradicting Che five principles of peace. Only after we
obtained ~ government assurance Chat similar acts would not recur once the
Japan-China Treaty went into effect did our party conditionally support
the treaty. When an upper house delegation visited China some time ago,
JCP Dietman Hashimoto was included in the delegation. He was the first
JCP official to visit China, and his visiC was an ouCcome of the universal -
recognition of our party's principled, reasonable stand on the Sino-Japanese
'Creaty issue.
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~o~ n~rrcrnL usc ncvi,Y
In Chin~, ~ fund~ment~l criCicism n~ the gre~t culrurnl revdlueinn h~g been
Cnrried nue and CdttcdmiC~nC r~ud~ugCmenCg h~ve been made, mhi~ iq n
~l.gnifinttne fnCe th~C des~rve~ nur nCCentiidn~ Th~ Cnurge of rhi~ criCicigm
_ gltad~ ligtiC dn thc~ renaon why Chittn hn~ been fnrced Co ~dmie the cdrrecCnes~
nf dur p~rty's cri~iniam of tihe gregC ~uiturgi r~volueion. Our pgrey m~de
ehe crieiCigm in ehp so-ralled "ld Octc~ber Artiele" publi~hed 12 years ~gn
under the titLe "The Curr~nr M~n z~dnng Lin~ gnd Che Ineern~tion~l Cnmmunise -
MovemettG . "
Comm~nCing on ehe developmenCg WIIiCIl were tnking place in China ~e Chae eime
in th~ ttnme nf Che grene nultur~l revolueinn, eh~ JCP ~rtiicl~ char~cC~rized
them g~ sCemming from gn gCCempt Co egt~bligh an "autocraCic rule by Mao
zQdon~ and his ilk." in ~ recent ~rCicle,BEIJING REVI~W ch~racterized thp
d~valopments fnllowing ehe culturnl revoluCion which began in 1966 ns a
"combin~Cion of ~ feudnl auedcracy ~nd 20th CenCury ~~scism." Thp only
diCterenc;e between Che~e two ~rticles is thgC B~IJING R~VIEW did nnC menCidn
Mao zedong buC made only "Lin Hian and Che G~ng of ~'our" the proeggonigCs in
the guCocraCic dram~. At any rate, Che BEIJING ItEVIEW article is CanCamount
to the delayed npproval of our parCy's analysis made 12 years ago. The pasC
severul mnnths have dramatically proved who w~s right and who was wrong.
Needless to say, tl~e intern~l read3ustmenCs being made from various morives
have no direcC bearing on the question of a departure from the big-power
chuuvinist international 1ine. In fact, Che error in China's inCernational
line i~ becoming more and more clear--as is Che case with Che Vietnnmese
and Cambodian questions. 5ince Chairman Miyamoto dealt with this matter in _
detail in t~is opening gpeech, I will noC go into further deCail. BuC let
me point out: It has been f~shionable for Japanese politicians and ~ournal-
ists to pre~ent argumenCS flaCtering to Che United SCates and China on the _
basis of one-sided reports from Beijing, Bangkok and the Unieed 5tates.
Under these circumstances, iC is significanC that our parCy has adhered to
its position based on truth and reason and has always presented the right
attitude and ,tine for Che progressive forces to follow, while playing Che
role of one who, by securely grasping the key Link, corrects errors in
Jupanese poliCics.
COFYRiCHT: Akghata, Tokyo, 1979
- C50: 4105
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I~q[t n1~I~ICIAL USL dNLY
i'dLI'I'ICAL ~ANU 5dCtULOGICAL
'MAINICHI' W~LCOMC5 It~5UMPTION 0~ SEOUL-PYONGYANG llIALOG
Tokyo MAINICNI StIIMBUN in Jap~nese 18 Feb 79 morning ediCion p 5 OW
(~ditorinl: "KeyumpCion of North-South Uialog in Kore~"]
[~xcerptsJ A preparatory meeCing on the resumption of full-dress talks
between North and South Koreg wgs held at ~'gnmun~om oti 17 re~~ru~ry. At Che -
meeting both sides advanced propoeals based on their respective positions
and aF;r~ed to reopen the North-South birect Telephnne Link and to meee
ag~~in on 7 Marcli. Although iC nppears it will Cake more time for full-
dres~ Calks to resume, we re~oice at the reopening of Clie pipeline for
exch~nges of views between the two divided parts of Knrea.
5outh Korea proposed at the meetin~ Co hold a meeting of Che long interrupted
Nortl~-5ouCh Coordin~tion Commietee [NSCC] on 3 April in Pyongy~ttg. North
Korea, meanwhile, suggested that prepararary talks be held for convening an -
all-nation congress, asserting that the NSCC "does not accord with the wishes
of the whole nation." Thus, Che contentions of [he two sides remained at
_ variance. _
'I'he difference in the positions taken by the two sides should not be under-
raCed. 'The scuti~ insists on resuming the NSCC talks from its tradirion~l
position that only through Calks between responsible government delegates
can the unification issue be negotiated. On the conrrary, the north calls
for ttie esrablishment of a preparatory committee for national unificaCion--
- a sort of Eormuln Eor unification debates by mass rallies. The latter
= proposal c~n iiardly be regarded as appropriate for negotiations over a}~ighly
~iolitic.~l is~ue.
ilowevcr, tlie latter proposal reflects President Kim I1-song's firm resolve
= to opposc: to the bitter end the perpetuation of "two Koreas." President
Kim t~as called Eor the convocation of a great national congress ever since
I~e introduced a Koryo Confederation proposal in 1973. In responding to
President Pak Chong-tiui's call for an unconditional resumption oE talks, he
put up a counterproposal in the name of a privaCe organization, called the
Democratic Front for the Reunification oE the Fatherland. The North's
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I~Oit OC~'~CIAL USL ONLY _
d~legnte~ ~Qnr Co tl~c PanmuttJnm mc~eCing ~lsn repre~ene thig privaee nrg~ni- -
z~Cintt. A11 tihi~ cun bp enken ~g a m~nife~eation nf eh~ ndreh's gdherenc~
" to ~.tg egtiabl3ghed policy.
These di�ferenceg bntw~en eh~ ttnrth gnd soueh gre nde n~c~sg~rily relared ,
to eh~ question of how to nc}iieve penceful unificaeion itself.. They ~hnw
thue Che two ~id~s h~ve gh~rply divided npiniong even ov~r such triv3al and
fnrmg~ m~CCers. Mnny difficulCies are gneicipae~d for eh~ norCh-snueh
- diglog.
- The inCernaCion~1 climaCe encompassing Korea is very favornble. nuring
tit~ recen~ visit to Washington, Chinese Vice Premier Deng Xi~oping ~greed
wiCh president CarCer on "a peaceful seCtlement of the Korean question."
The SovieC Union is mnking frintly overCures Co the ItdK, gnd Che ROK seeke
g di~ing with B~i~ing ehrough Jap~n'~ mediaCion. 5outh Kore~ is schedUled
to parCiCipaCe ~,tt Che forChCOming world Cable-Cennie champinnships td be
held in Pyongyang. These tendencies roward Calks and exchanges should be
boldly promoted by nll means.
Nevertheless, both parries appear to be exce~sively nervous abouC condi-
tions for renpening their d3aldg. This fact should be fu11y taken into
- consideraCion. This applies to Japan's Korea policy; and Japan, as a
neighbor, should render as much cooperat3on as possible to help promote
the dialog.
COPYRICHT: Mainichi Shimbun, Tokyo, 1979
CSO: 4105
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POit d~i~'ICIAL U5~: dNLY
LCONOMIC , -
~MALNICNI' SUI'POIt7'S OHIEtA'S COMING VI5IT 'TO UNIT~U S'I'ATCS
Tokyo MAINICHI bAILY N~WS in ~nglieh 21 ~'~b 79 p~ OW
[I:ditorinl: "Jr~p~n-U.S. Trade ~'ricCinns"]
['I'ext] It appears rhat a visiC by Prime MinisCer Ohirn to the UniCed
Stntes, which he hinted ne in the Uiet last rriday (16 ~ebruary~, will
soon become a realiCy.
We tl~ink the proJected visit, designed to reduce tlie current economic
Erictions b~tween 1'okyo and Washington, is necessary in order Co prevenC
- ttie Erictions from incrensing. Needless to s~y, if they do incre~se, Chey
will tt~reaten the very foundntion of Che bilateral relations.
T}~e relations between the Cwo countries have been so close in ttie past -
t}~at etiey are s~id to be rea~hing the stage of "maturiCy."
Despite this, t}ie nature of the trade problems between Japan and the
U.S. strongly suggests that the relations, however amicable they are, n�ast
- be kept under constant review and thut any difficulties that arise must be
dea1C with as quickly as possible in order eo maintain and further consoli-
dnte tt~e relations.
- In order words, tiie maintennnce of close and friendly relations calls for
increased efforts and wisdom on both sides. In this r.espect, exchanges of
opinions between the leaders of [l~e two nations, which will enable ttiem to
better understand each other's viewpoint, seem essential. Such exchanges,
to be made frecly and Erequently, are particularly important at a time when
tt~c Astan and Mideust situaCions are rapidly changing.
'I'l~ere were those in ~ove;nment circles her~ who, wtien Ohira took power,
wcre ~p~osed to his visiting Washing[on, on thc grounds that it was a mere
courtesy call by a new Japnnese Prime Minister. Others questioned the
wi.sdom oF a visit only to the U.S. prior to the Tokyo Summit of Industrinl
1)emocr.~cie~ in June--~n act which they regarded as showing a lrck of
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~
_ ~OR OI~'~ICIAL US~ ONLY
cnurte~y tn Che he~ds of oCh~r part~.cip~eing counGries. We do not ~gree, _
hnwevar, wieh Chese npininns ns we feel ChgC Jnpan and ehe U.S. musC
deepen Cheir mutual under~tgnding by mninCninittg close coneact, in order
en r~gpnnd tid a c~ll �or Cureher expen~inn of the world's ~cdttomy, ful-
f111tn~ Cl~elr reepnn~ibilitie~ u~ econnmic gi.unts.
W~ are reminded nf Che biteer pi11 J~p~n had to swallnw eighC ye~rs ago--
Ch~ ~n-cnll~d "Nixon shock" which rc~ck~d ehe Jnpnnege Governmenti. The
gbsenc~ df exchgnges of opininns between ehe Japanese and American le~ders
in ehe six mdnChs prinr eo president Nixott's surprise visiC to Bej.~ing--
nn Amerinan diplnmaCic move whiCh Jgpan regarded ay being carried out over `
J~pan's tiead--might huve been partially responsible for the shock.
Am~ricgn critici~m ~ga~nsC Japan in the fi~ld of economic relations,
wt~ich hns been re~orCed by two government represent~tives afeer returning
from U.S. vi~its, has been un~xpecCedly severe.
It 3s Crue Cht1C Che biggest issue in the Japan-U.5. economic frictions has -
Ueen Japnn'~ ht~.:~iding up ~ huge surplus in irs rrgde with the U.S. busi-
ness ~nd government leaders in America complain Chat Japan's expanding
exports to Che U.S. are causing increasing unemployment in that counCry and
Ct~nt the Jnpanese market is comparatively closed to American exporCs.
The biggesC political problem the Carter adminisrraCion now faces is how
to tame inflation. The proposed inflaCion-taming sCeps include posCponement
of tax reductions and curtailmenC of welfare spending, both of which would
be unpopul~r with the L~-5. citizens. However, the administraCion wants to
curb inflation this year because nf Che presidential election coming up
next year. In order to win public support for the admittistration's poli-
( cies, President Carter may find it necessary to strongly urge Japan and
West Germany to reduce their surpluses in trade with the U.S.
In addition, Che U.S. Congreas is to formulate legislation in line with
multilateral trade negotiations and consider bills related to U.S. foreign
trade.
Another cvncern Co us is the increased American trade protectionism result-
_ tng from Che by-election held last year. Furthermore, there is the feeling
- in the U.S. that Japan lacks serious consideration in its effort to rectify -
tt~e big trade imbalance with the U.5.
We hope that Prime Minister Ohira, taking cognizance of the American stand-
points, will do his best to deepen mutual understanding and fmprove the
strained trade relations during his forthcoming Washington visit.
COPYRIGHT: Mainichi Daily News, 1979
CSU: 4120
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CCONOMIC
YEN TO CONTZNUE TO RIS~ IN 1979
Tokyo MAINICHI DAILY NEWS in ~nglish 8 Feb 79 p 7 -
[Econoscope column by Econobserver: "Yen Will Contin~ie To Rise"]
C~~X t ~ ~Throuqhout last year, exporf thelr prices to match the prices parity Is Y210, t~ a dollar and
industrles were torce6, and are oi imports. ' will be 1~195 to a dollarln several -
still beln~ fo'rced, to underqo Thls ls a punishmept similar. months. What ls turther ahead
structural retorms to adapt to a to thAt which export industries 1s st111 stronger yen.
stronger yen. IVow lt is the turn have taken to sarvive the yen . The short�range~ reason for
- tor domestic industries, which appreclation, The name ot the predf~etfn~ continued ap-
compete with imports, to ~utter game i~ rationallzatton, precintion of the yeu is Japan's
the pafns ot adapting to the new . If 9n .indus'~ry falls In its ~ade surplus,� Ju qY its
s(tuation. ratlonalizatlon etforts, it will slze and the state of '~pnn's
Notlceable decifnes in the join the ranks of those'that have exports, the yen may loglcally
prfces of imports have been (~n classitied as "Structurally be valued at ~185 per dollar at~
terrorizing the domestic 1n�' de ressed." present,
dustries which had bPen How the yen wql fare in the Currency values ure quoted
catering to domestic r~eeds in future, therefore, is of con- on the foreign exchange market
the absence ot really e[fective ~ siderable concern to domestic not by pure mathematics.but by
torefan competition. Suddenly, indusfries catering to domestic sentiments, speculation and
foreign competltton became needs, WIl? the yen turn politics. These elements are
substantial with the spurt ot the downward trom now on under now preventing the . yen from
yen value. the etfect of America's dollar appreci~tin~ beyond ~185 per
What, for instance, will defeese measures and dollar:
6appen to the domestic Japanese in'flation? When these elements that
whiskies wher~ scotch whIskies Or, will the yen keep ed~ing figure in torming quotations
become available much up because lnfiatlon will con= cvear otf, the yen will spurt
cheaper? How wlll the ttnue in the U.S. and the etfects aqain.~Then, subsequent decline
Japanese garment industry be of Amerlca's dollar defense oP exports wili work to soften
affected when American measu~'esareshort�lived? theyenvalue.
businet?s suits begin ilooding the I n e x p 1 a i n i n g~ p r i c e When all these lang- and
local market by trimming movementa, economics of[ers shorE=range el8ments are
tigures on their price tega? long- and ahort�raage factors assessed together,- the sate bet
Can domestlc industrles~ tor analysis. The long-range, for this year w111 be that the yen
caterinq to domestic needs and the,retore more tun- will contlnue to stay on an
withstand. the price_advantage dameatal, factor is the com- upward path, gainfng by ~'2 or so
ot imporls because tfieTr parlson of purchasing power e~ery month. This is going to be
products are tailored ' to p~tweenthedollarandtheyen. another year ~ ot yen . ap~
domestic tastes . If they cannot, At present, t~e theoretical p~iatton.
they will be torced to reduce ~
COPYRIGHT: Mainichi Daily News, 1979
CSO: 4120 35 _
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I:CONOMIC
MI1'I ~F~ICIALS ALARMED BY YH~ UNG~~7AIN PaG MA~KET
Tokyo gUNG~I SHUNJU in Japanes~ January 1979 pp 345-362
,~TextJ New Trend
The flow nf history ~urrounding China changed during the 1~60's. Ci,ina pro-
ceeded to move in a direction that char~ged the violent Curr~nt of th~ Cul-
turai revnlution and that led ~o China's Coi~nunist Party Ninth Central Com-
mittee's S2cond General Meeting and the ~ourth N~tional people's Con~re~s.
United States diplomacy bypassed Japan with the U5 president's China visit
_ in 1972. Seeing that the United States r,ould change to such a degr2e, Japan
began moving toward embracing the new historical trend. -
First of all, an economic cooperation agreement on the yen and yuan was made
between the Bank of Japan and the Dank of China, China's bank specializing
in foreign exchange, in order to mutually avoid the risk of an exchange
based on the fluctuating Brit7sh pound, which had been used as the settle-
ment currency for Japan-China trade until that time. Afterwards, it was ex-
- panded to 28 Japanese banks (13 city banks, 3 long-term credit banks, 6 reg-
ional b~nks and 6 trust banks). -
, On July 7 of that year, Kakuei Tanaka's administration began. Prime Minister
Tanaka as influenced by the advice "we must normalize formal diplomatic re-
lations with the People's Republic of China with a formal visit to Pekina
at an early stage." That advice resulted from a previous visit by a party
headed by Yoshikatsu Takeiri of the Komei Party and Ikko Kasuga of the
Democratic Socialist Party.
As soon as Tanaka assumed palitical power, he made an announcement, implying -
' a leanin~ toward positive attitudes toward China. On China's side, Premier
Chou noted: "We welcome Prime Mir~ister Tanaka's announcement, making an
effort at normalizing Jupan-China diplomatic relations." Along with Ohira,
Liberal Demccratic Party Chairman Susumu Nikaido and others, Ta~aka visited
China beyinning September 25. On September 29, in the P~ople's Congress
- Hall, Japan and China ended the abnormal situation between the two countries
and normalized diplomatic relations with the signing of a Japan-China joint -
declaration containing nine provisions, such as Japan's recognition of the
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rott ritjrtct~t, u~;r ~u~.~
hovernment of the Pedple's ~epublic of Ghina ~s th~ sole leqitirnate yoverny
m~!nt ~~nd t:hina's w~~iv~r ~f it5 reparation claims against Ja~~a?i. With that~ -
Japari als~ en~braced the trend of the new era surrdunding Ghina.
A1ong with the normali2ation of Japan-China diplomatir. relations, a~)apan~
Ghina C~onomic So~iety began, under th~ ~halrman~hip of YoShihiro Inayama,
' whn i~ the real pow~r at Nippnn ~tepl Cerporation ~nd who had a close re1a~
tinnship with Ghou En-1a1. Y~ei,ji W~tanat~e, whd was ~nthusiastically devdted -
= to Japan-Gh1n~ relations frdm h1s days with the Ministry bf international
trade and Industry (MI1'I), beCame Chief dire~tor of the so~iety,
Kaheita Okataki, representative of the Japan-China prdtocvl Trade Office,
~upported the Japan-China ~conomi~ 5n~iety after the di~solution of the -
Japan-China prot~col fir~de dffi~e at the be~inning of 19~4. ("The role of
pr~t~~vt tr~de ~nd~d with the res~tdratidn of ~iiplnmatic relatidns b~tween
Japan and China.")
In December t972, one tnonth after the est~blishment of the Japan-China Eco-
ntimic Society, export ~redit prnvisions from the ~xport~import Bank opened
up again for the People's ~epublic of China. ?h~se had stopped after a
speech by Prime Minister Satn in ~~bruary 1965, pro~laiming that because of
the existente of the "Yoshida ndte," "export funds may not b~ used for de-
ferred payments by Ghina." Th~ 1~ng wint~r of econdmic relations betweEn
Japan and China had finally ended.
The pRC's Premier Chou ~n-l~i proclaimed a new line for building China's -
economy in January 1975 at the Fourth National People's Congress, which had
finally op~ned. At its Core are th~se two points: "Ouring a ten ye~r p~riod
- beginning frdm 1975, we wi11 establish a national economic system and in-
dustrial system which will be independent and relatively well organized.
ay the end of this century, we will realize the "four modernizations" of
_ agriculture, national defense, industry and science/technology, and will
put Cnina's people's economy in the front ranks of the world's economies."
This new line for building the economy was stagnated temporarily by the
pnwer of the so-called "gang of four", but, upon the successive deaths of
China'~ Comnunist Party Centr3l Committee Chairman Mao Tse-tung and Chou
in 1976, the Nua Kuo-feng regime began. After Chou's death, 7eng Nsiao-
ping, who had twice been relieved of the duties ~f vice-premier, wds again
restored at the ~enth Communist Party Central Committee's third general
meeting, and there was a switch-over tu the "Chou line with~out Chau."
7he PRC's economic policies took a 180 degree turn after the "gang of four"
era. Inayama and Li affix~d their signatures to a long-term trade agreement
on ~ebruary 16, 1918 (mentioned at the beginning of this report).
increased Import of Chinese Crude Oil
- Going back five years before the inayama-Li agreement to 19~3, Japan was
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- ~Ott n~~IC~1L US~ dNLY
lmporting Ghines~ ~rude oi1 on an experim~ntal b85~5. Chin~e~e ~i1 is a vis-
~bus n11, having a t~nd~n~y tn be td~ heav,y. Sin~e it has a spe~ific gravity
and vis~~s,ity ~las~ifying it a~ a"h~avy crude di1", ~v~n with a c~reful re-
~ining prt?c~~s, refining it td gasnlin~, whiCh has a high d~mand in Japan,
d~es not ~,how much prnflt, wh~n eompared tn ~i1 su~h as "Ar~bian light",
the prddut.t o~ th~ Midd1~ ~~st, whlch is n~ainly what Japan imports.
H~wever, Japan's imports ~f Chin~se crude nit the 1`nllnwing y~ar suddenly in-
~r~a~~d ii!,6 times that o~ ~9y3, Mor~ov~r, it in~r~~s~d ~U% in 1975 over
the previc?us year and rose t~ b~inr the te~ding product ~mong produ~ts Japan
~ purchased from ~hin~.
_ ~rom the i:im~ n~ th~ fdurth Middl~ East w~r, wh~n the oi1-producing Arabs
us~ed th~i~~ "oil we~pon" strategy and cut off th~ pro-Israel countries, MITi
began ta have a strong, extr~mely ~1~ar r~~agnitinn that "the e~tablishment
nf a~~1ic.y for the s~curity df Japan's econor~y ha~ nn oth~r choice than to
- $pr~ad oui: its ~crude nil impdrt mark~t,"
Japan was alr~ady driven by the n~c~ssity of spreading nut its Crude oil
- import mai�k~t the year before the fourth Middle ~ast war of 1973. In 1972,
the perce~~tage of Japan's Crude oi1 impnrts, which th~ Middle East crude
oil of Ir~in, Saudi Arabia and Kuwait h~ld, ~,ose to 80.~%, amounting to 246
million k�iloliters. Of the remainder, 16.4~ came from Indonesia to the
south; crude oil from the 115SR was no more lhan 2.9%.
_ MITi made the ~udgment that "nothing would better serve the sacurity of
J~pan's c~~ude oil imp~rts than China selling its crude oi1 to Japa~ on a
long-term basis, once China's oil real~ly begins flowing."
In NovembE~r 1975, during which Chinese crude oil exports to Japan increased
to nearly twice that of the previous year, 7oshio Kawamoto, P1inister of MITI
in the MiE;i administration, visited China to hold talks about long-term im-
ports of Chinese crude oil to Japan with China's Vice-premier Li Hsien-nien,
who was s~iid to be a self-taught economist.
Although I;awamoto is among the successive MTTI ministers, he was a native of
~he businE?ss world, ranking along with Tatsunosuke 7akaiaki of recent times. -
He enter~cl the former Himeji High School and thought about becoming an his-
torian in the future. But. after he ~~wde an anti-war, anti-military speech
while part:icipating in military drills during his school days there, Kawa-
moto had no way of becoming an historian. Instead, he built with his own
- strength 1:oday's Sanko Steamship Company, known as a tanker cor~pany. It
was right in the middle of the Manchurian Incident when Kawamoto expounde;i
his anti-viar, anti-military thinking.
After having gone from being a longshoreman to being a public works worker ~
to being a~ factory worker, Kawamoto, who had been punished with expulsion
from Himeji High School, graduated from Nihon University's Law and Litera-
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ture b~partment, He set up his S~nko 5teamship Company based on his involve~
m~nt with a~hipping company during his days at Nihnn University, H~ held
- the presid~nCy oi' 5~~nko 5teamship Company until Miki (who did not exp~ct to
b~cnme,,~',rime Minist~r) put tog~th~r ~he Miki administration in OCtoher 1974.
Sin~e Kawantntn was elected eleven times aft~r his first ~lection in 1949,
he was a biet mcmb~r ~n addition to being pr~sident Sanko Steamship Cnm~
pany for a f~irly ldng time.
Just frbm his perception frum his business experi~nce as a producer af tank-
ers, Kawamnt~ could understand very well why MITI'~ per~onnel be~ame so
. franti~ after the "oi1 shnck" abdut a multipli~ity nf C~�ude ui1 supply sourCes.
Nay, it is mnr~ corr~ct to say that K~wamoto wrestled with the crude oil
question to the point of pushing the personnel at MI7I.
~ven th~ugh Kawamota 1ndk~d up to Miki as his teacher and superior, he did
ndt have much of the idealism Miki possessed, Under the twn adrninistrations
of Prime Ministers Miki and ~ukuda, there were time$ when the job of MITI
minister was given to Tatsun ?aneka, who kept "the LnP's treasury." gut
K~wamot~ showed considerable ability as the "businessman" minister of MITt
r~hile serving two terms in the minister of MITI's new offices.
Views on 7oshio Kawamoto
At the same time that being a"businessman" resulted in strengths for Kawa-
moto, it also resulted in shortcomings for him. He was able to find a posi-
tive plan for coping with economic problems that could be clearly seen as
imninent with much greater speed than could a bureaucrat. However, he would -
not show any interest in projecting a vision of the future---a future he
would not see with his own eyes.
Perhaps he lost the desire to look at the future from past history at the
same time that the road for Kawamoto to become an historian suffered its
- setback at Himeji High School. When one looks at Kawamoto up to this time,
?~is historical outlook stops completely at reading the present from the
past. Ne is not the type of person who attracts people with the kind of
statesmanship that confronts the future, as does a politician.
7he point must be acknowledged that he differs greatly from Tatsunosuke Ta-
kazaki, also associated with the same business world, who likewise served
as n?inister of MI7I.
Nowever, just as he had studied the crude oil problem as president of Sanko
Steamship Company, Kawamoto knew the existing economy and was thrilled with
assuring the security of energy sources (concerning which P1ITI officials
~ cried out hysterically after the fourth Middle East war) by spreading out -
crude oil import sources.
In the November 1975 meeting between Kawamoto and Li Hsien-nien, China made
a fundamental mutual agreement with Kawamoto on actualizing a long-term
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~~r~~m~nt on long-term crud~ nil ~xports to Japan, Of ~ours~, on January 20,
tem m~nths b~fore Kawamoto's visit, a delegation of th~ J~pan-China Ecnnnmic
So~iety vi~iting China under the leadership nf Inayama had explained Japan's
plan fnr long-term crud~ oil ~xports from China.
~ At that time,
Chin~'s ViC~-premier Ku Mu explained to th~ Inayama group that:
"Our country has decided to advance a positive plan for our econor~y. Impnrts
of China's shortage commodities and the purchase of technology will increas~
in the future."
8ut in the China of 1976, Chou En-1ai died. In February, wa11 posters began
to appear, critic3zing the "running capitalist" faction. On April 1, Fang
Yi's treatise, "criticism of philosophy as the handmaiden of the west,"
was printed in 1'HE RED FLAG, China's Communist Party organ. So, it was dif-
ficult to predict what would happen to Chou's line in that time of violent
shocks.
After experiencing another period of violent disturbances, such as the 7ien
An Men incident and the purge of the "gang of four," the engines started up
again for the "Chou line without Chou."
A delegation of the Federation of Economic Organizations visited Peking in
March 1977. The leaders of Japan's financial circles held talks with the
Minister of Foreign Trade, Li Chiang. They reached a fundamental mutual _
agreement on exporting oil and coal to Japan on a long-term basis. This
materialized the following year in the Japan-China long-term trade agr~ement.
The Japan-China long-term trade agreement was backed up from the political
perspective as well with the signing of the Japan-China peace and frienship
treaty (which had continued through long and difficult negotiations) in
- Peking in August of the following year. Foreign Minister Sunao Sonoda,
. who had gone to Peking and brought the difficult negotiations to completion,
made this proposal to Chin~: "Since economic relations will welcome in a
new era, I would like to have MITI Minister Kawamoto t~ visit China."
Kawamoto made his second visit to China, lasting five days from September
11. Shiro Miyamoto, director of MITI's new International Trade Policy
Bureau, Naohiro Amaya, director of Resources and Energy Agency, and other
executives traveled together.
Besides Chairman and Premier Hua Ku~-feng, Vice-premier Li Hsien-nien, Vice-
premier Kang Shih-en and Foreign Trade Minister Li Chian~, the Chinese offi-
cials whom Kawamoto met in Peking included officials from the People's Bank
- and from the Ministries of Petroleum Industry and Chemical Industry. In
particular, Kawamoto met twice with his Chinese counterpart, Li Chiang---
at the beginning and at the end of the visit. -
Business-like China
Kawamoto went directly to P1ITI upon his return from Peking in the afternoon
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t~�~K orrictnt, usr oNi.v
nf 5ept~~hb~r. There h~ ~irst made th~ fnllowing s~atemen~; "The gr~atpst
question;wes hnw Can the trad~ volume be enlarged. With this Current J~pan-
China ldng-~erm trade agr~~ment, trade will have a~0 billion do11~r volume. -
_ (The limit on Japan's ~xports is at 10 billion dollar~. nut that limit will
have already been r~a~hed ~us~ with the business talks negotiated this year
---the first year,)"
"gecaus~ 350 billion dollars is supposed to be invested accnrding to th~ ten
year plan China has put forward, a r~vision ~nd in~rease in the volume must
tak~ p1ac~ at som~ pnint in tim~ before the Japan-Chin~ long-t~rm tra~e agre~-
ment's eight-y~ar authorized period ends. We would nnt be able tn do any-
thing frmm ~ow on if Japan's exports are limited to a 10 billion dollar
level."
Just before his Chin~ visit, Kawamoto made a swing through Thailand and
the Pi~ilippin~s on a second visit within the same year to the m~mber nations
of A5~AN (Alli~nce of Southeast Asia Nations). Then he flew to Seoul for
a Japan-South Korea conference. Immediately upon his return from South
Korea, he wc~nt to Peking---a hard schedule! However, Kawamotn, who neither
drinks nor smokes, did not touch any liquor even at the formal banquets and
dinner parties in Peking. Rather, he kept asking the Chinese waiter for
_ "cha" (green tea) ins~ead of liquor. With that, he was able to survive
his "forced mar~ch" (hard schedule).
Shiro Miyamoto, director of the International Trade Policy Qureau, who trav-
eled along from the ASEAN nations to South Korea and China, became exhausted
and experienced some stomach trouble. As soon as he returned home, he was
in such a condition that he had to be hospitalized. Qut Kawamoto, who had
_ hardened his body while working as a lonqshoreman during his younger days,
was in perfect health, even after managing such a difficult schedule.
Listed below is a su~narization of the problem points which, in Kawamoto's -
opinion, ought to be examined in the long-term trade agreement made during
_ his second China visit and in the financing of trade and resources develop-
_ ment.
There is a unanimity of opinion with China on this point: "In order to ex-
tend the Japan-China long-term trade agreement, it will be necessary to
cram in as m~ach trade as possible during the sixth through eighth years of
the 1918-1985 authorized period. We were able to have a fundamental agree-
ment on extendinq the long-term trade aqreement, scheduled to end in 1985,
until 1990. Given the increase in the number of people involved from Japan,
the Japan-China Economic Society, with the society's.president Ir.ayar~a as
- t~ie key person, will hold discussions ?vith China to decide on the substance
of the extension. Because the trade volume will rapidly increase, the gov-
ernment will give its opinion in contrast to the opinion of Inayama and the
private sector. The government's support is necessary. An agreement be-
tween governments is also probably necessary.
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rn~ drrtc~nL us~ oNLY
Henc~, both countiri~s will meet to decide whether it will take th~ format of
a regularly schedul~d cnnference between the cabinet ministers of Japan and
China. Japan's import volume of Chinese crude oi1 ha$ be~n set at 1~ million
- tones in 19f32; ~h~ amount from 1983 was left undecided. Concerning the period
after 19g~, wh~n I~ay to China; '1s there ~n agreement to accept pven a ~
full-scale increase,' the Chin~se answered: 'we will supply any full-sc~le
incr~ase.' But na concr~te figures were given by eith~r side."
o "Deferred payment$ for exports from the funds of the ~xport-Impnrt Bank of
Japan, based on th~ dnllar, were "OK"---in line with a promise among the
western nations, which set the interest rate at 7.25 per annum for a term
of less than five years, and an interest rate of 7.50~ per annum fo~~ a term
of more than five years. Now to make practical use of the Expnrt-Import
Dank's system for resource development financing and how to finance the de-
velopment of China's crude oil and raw coal and how to finance their import
to Japan was ~xpl~ined as follows: 'If you use yen for capital, we can lend
you funds at an annual interest rate of about 6~."'
"But China saw this as a problem. 'Since the yen is a strong currency and
its value will float upwards, were China to borrow yen, we would have to
work under the view of being helplessly at a disadvantage.' No conclusion
has been made concerning whether the Foreign Exchange Bank of Japan will
make large deposits in the Bank of China."
"China has become extremely business-like. China and Japan are in basic
agreement in the opinion that the terms of the transactions on crude oil
and coal must be able to withstand international competition. They affirmed
the principle that the terms of the transactions on areas such as price
will be looked at on the occasion of each transaction."
China asked for an easing of the list of items under the embargo set by
COCOM. "I said: 'the embargo list must change in accordance with scientific
~ and technological progress and with the changes in the international situa-
tion occuring each year,' I promised the positive cooperation of Japan to-
ward softening the list."
"A secure supply of resources and energy is directly linked to our nation's
security. We will use China's crude oil as a reserve supply for Japan.
7here was no discussion with Chinese officials about importing weapons.
However, China requested Japan's cooNeration on a plan to build large hydro-
_ electric power stations on the Yangtze River and Yello~v River. Because
China has an abundance of coal and water power, it is in no hurry to develop
_ nuclear energy generation; and so, it made no such requests." _
With Kawamoto's visit to China, the first curtain rose on the "Japan-China
- Drama" opera in the above manner.
New Order in MITI's Bureaucracy -
On October 22, China's Vice-prem~er Teng Hsiao-ping came to Japan for the
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rOlt nI't~'IC2AL USI, ONLY
,
~xchange of th~ ratifiCation of the Japan-China p~ace ~~nd ~riendship treaty.
He tnok a tour of the newest fa~ilit~es of Nippon St~~l Corpora~ion, Nissan
- Motor Co., Ltd,y Matsu$hita Clectrical Industrial Co., Ltd, until the day
h~ departed Japan frdm Osaka on th~ 29 of the same month, "It is a nuisance
~nr Japan tn have such a poor friend as China, but pleas~ remember us."
"China did not consider making loans between governments, but it wi11 be a -
sub~e~t fnr future study."
_ "China calls the Senkaku Archipelago ~he Chiao Yi Archipelagn. Since the
names both countries use is different, there certainly is a difference in
points nf view on these islands by both parties. I would think that it
would not mak~ any difference if we shelved tihis problem temporarily. It
would not matter if we shelved it for ten y~ars. The people of our gen~ra-
tion lack enouch wisdom. Our discussions would not arrive at an agreement;
but perhaps the next generation will be wiser than we."
On his first visit to neighboring Japan, Teng left a cnpy of "Teng Hsia-ping -
Aphorisms," which are mild at times and quite frank at other times. -
From the final stages of the Japan-China peace and friendship treaty negoti-
, ations extending up to Teng Nsiao-ping's visit to Japan, it is said that
the Cl~inese officials made this announcement: "presently, China's first
priority is 'the four modernizations,' and in order to achieve this purpose
it cannot be helped even if China's political structure changes." Whether
- the words "it cannot be helped even if China's political structure changes"
meant "changing the political structure, they will actualize the "four
modernization~" or whether it was a metaphor meaning "we will concentrate
our strength on the 'four modernizations' to the extent that we think it
cannot be helped even if China's political structure changes." There were
a limited number of Japan~se who heard these words, but they were divided
- in their understanding of what the words meant.
However, even though there was indeed a difference in their understanding,
the Japanese were in agreement in their opinion that Chairman and Premier
Hua Kuo-feng and Vice-chairman and Vice-premier Teng Hsiao-ping, who form
a complex combination in internal politics, are definitely committed to the
- "four modernizations."
On October 30, the day after Teng returned to China from Osaka, MITI opened
a departmental council and set up a comnittee to expedite measures for
Japan-China economic relations. -
"When the Japan-China peace and friendship treaty was concluded, our coun-
try's econom~c relations with China underwent a large transfiguration; and
they are expanding. In view of the importance of this, it is necessary for
' MITI to urgently promote accurate answers to cope with the situation. To
do so, we will establish within MITI a committee to expedite measures for
Japan-China economic relations, and the committee will draw up and regulate
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~dx n~~tc~n~ us~ ortr,Y
~l~xibl~ as we11 as compr~h~nsive measures," 7he above expl~in~d th~ purp~s~
- for set~ing up the cammittee to expedite measures for Japan-China economiC
' relations.
Shiro Miyamoto, dir~ctor of th~ Internation~l Trade policy Bureau, b~~ame
th~ con~nittee's chairman. Miyamoto, who suffered th~ stomach a3lm~nt nn
his China v3sit with Kawamoto, has since stopped drinking and smoking.
E3ut he recovered so w~ll from his illn~ss that he disclose~: "should I go =
back to drinking whiskey and water7" They set up two vic~-chairmen und~r
Committee Chairman Miyamdtn---K;yoshi 7akahashi, assistant director of the
International Trade Policy Bureau, and Kiyotaka Kodama, assistant director
of the Resources and Energy Agency.
_ Besides Tadaynshi Nakazawa, chief of the Administration Division of the Min-
- ister's Secretariat, they added to the committee membership 'Tsukasa Sakai,
chief of the Administrative Division of the International Trade Policy Bureau>
Moriaki Ueda, chief of both Administration Divisions of International Trade
Bureau and of the Industrial Policy Bureau, Nario Saito, chief of the Admin-
istration Division of the Basic Industries Bureau, Kengo Ishii, chief of the
Administration Division of the Machinery and Information Industries Bureau,
Jiro Aiko, chief of the Administration Division of the Consumer Goods Indus-
tries Bureau, Masuo Shibata, chief of the Administration Division of the
Director's Secretariat of the Resources and Energy Age~icy, and finally added
the chief of the Administration ~ivisions of both the Patent Office and the
Agency of Industrial Science and Technology.
Thus, there exists a structure wherein these related administrators can be
- called together in committee by just a command from Chairman Miyamoto, when-
even necessary. In reality, assigning them to the committee is the same
as a sumnons or comnand to the China subject for these "ace" administrators
of MITI.
Moreover, as subordinate parts of the committee's structure, they established
special project teams, according to subject area, such as "basic questions,"
"Japan-China long-term trade agreement," "petroleum prospecting development,"
"coal prospecting development," "non-ferrous metals development," "preferen-
tial customs duty," "processing trade," "industrial plant trade," "personnel
of commercial firms s~tationed in China."
Shiro Miyamoto, director of the International Trade Policy Bureau, stated
the following on the day the Committee to Expedite Measures for Japan-China
Economic Relations started. "China has one contact desk. Although one sees `
a group working in connection with the long-term trade agreement on the part
of thA Japanese private sector, there are the two desks of the Comnittee to
Expedite International Trade and the Japan-China Economic Society. Many
related ministries and agencies have something to do with the Japan-China
question---such as the Ministry of International Trade and Industry, the
Ministry of Foreign Affairs, the Finance Ministry, the Ministry of Agricul-
ture and Forestry's Fisheries Agency. They must simultaneously promote a
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I~Ott O1~ I~ IC Ir~L U51, UNLY
Cnordinat~d poliCy, not a~ separate ministries and agencies a~ting diff~rent-
ly on th~ Japan-Chin~ que~tinn, but as the government df Japan, who has wdri
nver the privat~ s~Gtnr. Lik~wise, especailly sinC~ J~pan must have one plan
concerning a~tual qu~stions, such as p~troleum prnspeCting develnpment, we
will have Inay~nta's Japan-China Ec~nomic Society set up a team similar t~
our pro~ect t~am."
"Wh~n th~ government had c~m~ to ~ mutual understanu~ing with Inayama's t~am,
we s~t up the Committ~e tn ~xpedite Measures for Japan-China ~COnomic ~ela-
tinns in order to prepare ~ systematic approach for consulting with China's
nne 'desk.
In short'; even with Japan-China ~conomic relations, th~y used the formula
of ~ooperation between government and th~ private s~~tnr, which had prdduc~d
so ef~ieciently a high level nf growth in th~ heavy chemical industry of the
1960's---that was Japan's original formula for cooperation between govern-
ment and the private sector,
With the liberalizatian of trade, capital and foreign exchange, MITI's juris-
diction tn authorize approval to the private sector diminished. Instead,
the Diet and Diet members began interfering in its administration. A decline
in the value of the bureaucracy became a reality. Because of such an en-
vironment, bureaucrats in the principal ministries and agencies resinged
from official life part-way through their terms. There was a remarkable
increase in the number of elite bureaucrats who entered political life as _
Diet members or who turned to working as university professors.
If Japan-China economic relations really stand as a turning point in Japan's
economy and if they have any future, the management of the economy and the
industrial world by remote control of the discretion of t~lIlI's bureaucrats,
under the name of cooperation between the government and th,e private sector,
as originally intended, in reality is connected to ~he "r2instatement of
MITI's bureaucrats."
When the Japan-China long-term trade agreement was singed in Peking, 7oshi-
hiko Yano, director of the International Trade Policy Bureau at th~t time,
had a premonition that "the time for MITI to start jumping ahead would come
at last." Eight months later, his premonition was right on track, as least
as far as form goe~.
Future of PRC Market
. The day after Vice-premier '~eng Hsiao-ping returned to Peking, a mission
came to Japan---a mission with with the long name of "People's Republic of
China National Economy Committee Delegation for Visiting Japan." The rush
to visit Japan by Chinese a~dministrative officials, such as Teng Hsiao-ping
~ and the National Economy Committ~e, opened the curtain on the second act
of the opera, "Japan-China Orama." The assistant chief in charge of the
National Economy Comnittee was Vice-premier Kang Shih-en. The head of the
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~dit 0~~'ICrAL US~ nNLY
del~ggCion vi~iCing Jupnn, Yunn ~~nhu~ [Yu~n pgn-hu~], was the ~ggige~nC
dir~~eor nf Ch~ Ngei.onal ~cnnomy CommieCee~ In J~pgn's r~nking, thae woulcl
b~ ~ither ~~binee mit~igrer dr vic~-minigter,
Under de1~g~Cidn lender Yugn, Chere were beng Liqutt [Teng Li-nh'un] (AggigCgne
Dir~~tdr nf Chinu'g IngtieuCe nf Soci~1 Sci~nc~~), ~~sige~nt d~leg~tidn Chief
Xi Liantu [Hgi Li~n-C'u] (Ag~igC~ne Chi~f of th~ N~Ciott~l ~connmy Commieeee),
nnd gggi~t~ne delegntion ~hi~f Y~h Lin (AsqiseanC Chief df ehe peking itpvd-
lutinn~ry CommiCtee),
Tlier~ wer~ 23 delegntion memberg ~1CogeCher, including inCerpreters--M~ Hong,
director of Che IndugCrt~1 ~condmic ReseArGh C~nC~r of Chinn'g Snci~l S~rvi~es
- Ingtituee, Sung Chi-w~n, viee-minigt~r d� the MinigCry df Light Indusery,
Yu ~rliang [Yu ~rh-liangJ, man~ger nf ehe 5hnnghai Turbine ~nctnry, Yin Chung-
hu~ wdman), aggistgttC ~ccountanr for C~pieal Sreel Cnmpnny nnd nthers. As
~ne cnn 3udge from the eitles df Chose lisCed above, glmosC gll di them ~re
technocrnes.
Many of the things which China has been purchasing from Japan, Great Britain,
West Germany, France and the United States, such as a variety of industrial
plants, are the latest equipment of the capitalist countries. If it is not
the latest model from a technological point of view, they tu~�n away their
heads. That is, they will not buy.
In like manner, China has been desperately studying management systems in
many areas---from the industrial technology developed by the highly.industri-
alized countries of the west, to personnel and product quality control---
and the "know-how" of economic and industrial policies.
The purpose of the Japan visit by delegation reoresentative Yuan was the study
of management and planning. On November 1, Yuan,4/h0 WdS visiting with MITI
Minister Kawamoto, stated. "I hope you will support China's modernization,
which was delayed technologically by the 'gang of four."' When that deleaa-
tion's schedule is looked at, the thought comes to mind that perhaps the V
"Chou line without Chou" means that "they are trying to have a high level of
growth under the name of the 'four modernizations' by introducing such things
as industrial plants, which the advanced capitalist nations have developed,
and the practical application and use of such goods as computer hard?vare
and software."
Irrnnediately upon coming to Japar, Yuan's ~roup received special training in
~ 1:~e relationship between economic growth policy and productivity from Hisao
Kanemori, private economist among the supporters of Japan's growth, and Ta-
misaburo Sasaki, vice-director of the Japan Productivity Center. They re-
ceived an education in quality control at a university and in the movement
tn promote quality control from the Union of Japanese Scientists and Engi-
neers, Inc. They heard a concentrated lecture on industrial standardization
and quality control from the Japanese Standards Association. They heard
views on the newly industrialized cities from the National Land Development
Agency, and a lecture entitled "Economic Development of the 1960's" as well
as a lecture on management of today's economy from ~1ITI.
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I~~?It ~11'I~ ic' IAI, It ,I: t1N1,1'
Japan's ~nt~rpri~e Secrets China Wants to Know
When Kaw~~moto and Yu;,nmet fbr talks, the Chinps~ breke the ire with this com-
_ ment: "I would likC y~u to t~ach us Che s~cr~t of the high 1eve1 gruwth by
which Japan ~chi~ved its heavy chemical industriali � r,i~h in th~ 1960's and
beCame a ma,jnr e~dnnmic pow~r." This is equal to Yu~~n'wdelegation asking
us to teach th~m the se~rets th~ ~nterpris~s of "Japan, Inc.," cnncern-
ing high 1~v~1 growth, heavy ~hemical industrialization and ~xpansinn of
exports,~~ `
- At the same time they were studying high-level growth polici~s and were being
instructed in technnlogy, newly industrialized city planning, and business -
admini~tration m~thods from schol~rs, economists and others respnnsibl~ fnr
policy, th~y ~xamined the newly built factories of "Japan, In~." These were
plants actually in op~ratinn, such as Nippon Ste~1 Corporation's headquarters
and Kimizu ~'oundry, Tok,yo University's Department nf Technology, Toshiba Corp-
oration and its divisions for computers, desk-top cnmputers and large inte-
grated circuits, Komatsu Work's Osaka plant, the Keihin f=oundry of Nippon
Kokan, K.K., Kob~ Steel, Ltd., Toyota Motor Co., Ltd., the truck division
plant of Hinn Motor Co., Lttl., the Yokohama industrial plant and communica-
tions sate"ilit~ installation division of Nippon Electric Co., Ltd., Tokyo
fleavy Machinery's sewing machine division, the headquarters for Matsushita
Electrical industrial rompany, Ltd. and its radio, dry-cell batter, related ~
outsid~ order, el~ctronics parts, television, graun tube and integrated cir-
cuits divisions, Sharp's Tenri plant (Taiyo Battery), the Takasago Works of
Mitsubishi Heavy Industries, Ltd., and Sumitomo Electric Industries, Ltd,
and its Itami plant (cutting blades and tools).
After that, they made a full study of the Kashima Kombinat as a living exam-
ple of a newly industrialized city. They studied the kombinat from such
points as the details of its construction and problems of where to station
the plants. At various intervals, they had interviews with the leaders of
Japan's modern capitalism, such as the Federation of Economic Organizations,
Japan Economic Association and the Kansai Economic Associa tion.
C~rtainly, men and n~achines work as ane unit in the top level production fa-
cilities. 7hat is, it can be said that men and machines become a synchronized
system. This human systematization was highlighted as a problem of "man's
alienation," because it was about to bring our high-level ~rowth to an end.
Qut China is trying to ardently learn from Japan for its "four modernizations"
program, which includes a systematization of inen as cogwheels~
The present Chinese regime is excited about making a success of modernization.
They are indifferent to how they appear to others, but from Japan's perspec-
tive, it is wondered what happened to their past philosophy of "working out
one's own salvation by one's own efforts."
For example, there is a money problem surrounding the "four modernizations."
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It is difficult to guess how much is in China's purse, but ~dreign specialists
on Chin~'s ~conomy have observed that, at ~he ~nd of 1978, the balance far
_ short-term debts was 367 million dollars, and the balanc~ for th~ cost of
importing industrial plants was 1.402 billion dollars (that tot~l includ~s
_ both principal and in~~r~~t).
Of this, the limits for payment and repayment came du~ th~ same year---for
the short-t~rm dpbt, 33~ million dollars; fnr the Cost of impnrted plants, -
422 million dnllars (including principal and inter~st). It was expected that -
the amounC would total 755 million dollars. It is tentatively calculated
that the 1979 sWort-term debt and the total required repayment amount on the
cost of imported plants will be 655 million dollars, and 6G8 million dollars
in 1980.
Nevertheless, while China's gnverning body is explaining to Japar~ that China's
foreign currency provisions are "only some 20 billion dollars," they are ex-
pecting to import a huge volume of products, including weapons from the Unit-
ed States, in addition to Japan, West Germany, Great Britain and France.
On account of this reference to foreign currency, they have diversed in a
- subtle way from their previous fundamental policy of "accepting no assistance
from foreign countries." They are supposed to be discussing in Peking whe-
ther it is right or w rong to borrow resources development funds for their
crude oil and long-term economic cooppration funds from foreign governments
for the construction of hydroelectric power plants.
After the Nua-Teng regime came into power, they suddenly advanced counter-
measures for the ethnic Chinese abroad. When Teng Hsiao-ping, who had vis-
ited Japan, visited Thailand and Malaysia, he extended his ~rip to Singa-
pore, with which China has no diplomatic relations. Was that trip made be-
cause it is necessary for China to bring in the dollars that had been asleep
on Singapore's Asia Dollar Market, due to the sluggish growth of Southeast
Asian nations.
China's current regime, which has staked its reputation on the achievement
of the "Chou line without Chou," began working on getting money from the
ethnic Chinese, who are scattered throughout the warld, in order to pull to-
gether funds for economic modernization.
In connection with gathering togethe~~ this money, it has been indicated that
. "besides personal banking accounts, loans and trade financing, now, invest-
ments in bonds, real estate and securities, participation in transactions
on the gold market and entry into consumer financing have been recognized
by the thirteen PRC connected banks of Hong Kong, such as the Barik of China,
Transportation Bank, Central Sout~ Sea Bank, Natior,al China Commercial Bank, -
Kinsong Bank, Kwangtung Provincial Bank, China Commercial Bank, South Seas
- Comnercial Bank and Overseas China Comnerical Bank.
On-the-spot reports concerning how the PRC connected banks are disg~ising
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t:his r.~~p~talisl;ic financin~~ were publishc~d almost simultaneously in the July -
7, 19/t3 issu~ o~ the 50U7H CI~IiVA ~10R~~ING f'OS'f, the English edition of the
July 12 issue of the ASIAN WALL STREET JOURNAL, and the July 21 issue of
the FAR EASTERN ECONOMIC Ri:VIEW magazine's column ori econon~y.
_ According tn the SOUTH CHINA MORNING POST report, it was explained that, in
order to serve the ''four modernizations" that China is to achieve by the end
of this c~ntury, tlie 13 PRC connected banks in Hong Kong have been advised
to strengthen their business management so as to be able to increase their
profits and lessen capital costs.
The FAR EASTERN ECONOMIC REVIEW offered the same kind of description in an
_ article titled "Open capitalism for Peking." From manufacturing industries
that are under the wing of the PRC controlled banks of Hong Kong to travel -
agencies---all received a directive "contribute to China by increasing your
profit margins!" It is generally observed that the ethnic Chinese in Hong
Kong are now remitting 500-600 million dollars annually to Peking,
China's new regirne has begun aiming for a high-level growth, clearly modeled
on Japan of the 1960's, With that, they seem to be trying to equip their
economy with current technology, developed in the latter half of the 1960's,
and to build plants that will operate with a great profit. However, do -
MITI officials, who ran to the PRC mark~fi, really think they can eulogize
the "new Japan-China era" without any possibility of future friction for
Japan, once China has made progress?
Japan---"Mansion B~iilt on Oil"
Trips back and forth by key figures and technocrats from both countries
- flourished. Now, ten months after the signing of the Japan-China long-term
trade agreement, the eyes with which MITI officials see China are hulging
_ at the complexity of the situation. Perhaps they ran out of breat~~ because
they were too enthusiastic at first.
Now MITI officials are eager to throw celd water on the Japan-China economic
boom. This attitude was preceded by a mood symbolized in the spirited state-
ment of Toshinobu Wa~a, former vice-minister, on the day the Japan-China
long-term trade agreement was signed. "Japan's economy, which passed a
milestone 30 years after the war and 100 years after Meiji, is now at an
historical turning-point."
Some MITI officials 5tarted making these statements: "When one looks at the
political changes in China from the time when Teng Hsiao-ping was again re-
instated in the summer of 1977 up until recent times, it is felt that the
tempo of change has been too fast. Japan has to make up its mind that with -
such a situation, there may be a reaction against the Teng line, which is
the 'Chou line without Chou'. It is dangerous to frolic about with the idea
_ there is a PRC market out there with one billion people, and that market is -
_ a'divine wind' sent to extricate us from an economic slump." Certainly, _
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~
when one looks at today's China, not only the mass~s nf Chines~ p~ople but
also wc ours~lves Cannot help but ~ntert~in f~elings abdut what tomorrnw
holds, `the ~~pling about "its days as a belliger~nt natinn" sti11 run d~ep.
M~~r~~c~vcrr~, i,hc: b~~sic: id~:~ f'or Chin~~'s eCOnbiiiiC niod~rnizatiori is to try settling
~iccou?it~~ wi th ~~al ~~nd rrud~ ~oi 1(the avai labl~ amounts and costs ef whiCh
= are uncertain), ra ther than paying with foreign rurr~n~y for th~ import ort
plants, construction m~t~rials ~nd equipment necessary to build the economy.
Not only th~t, but China is in ~ situati~n wher~ it must coll~?borete with
_ foreign t~chnology and ~apital righ~. frnm the first stage of praspe~ting fdr
their cnal and crude oil. On this point, MITI ~xecut~v~s, who had recently
visited China, said: "Until 1985, they will increas~ the rate of agriCUltural .
mechanization by 85�d and will increase industrial productinn growth by 10~
annually. If crude oil and coal production does not in~reas~, it is pnssible
th~r~ will be a breakdown in the pr~s~nti t~n-y~~r plan (19~6-1985) f~r eca-
nomic developm~nt, which will ~ttempt tn made crude steel production volume
_ graw tn 6100 tons by 1985, end will attempt td censtruct 10 ste~l kombinats,
9 non-ferrous metal kombinats, 8 colli~ry cnmpanies, .l0 natural gas and oil
fields, 30 pow~r stations, 6 new railroad~trunk lines and 5 major wharves.
So far as Japan is concerned, they cannot buy plants from Japan, if they can
not sell crude oil to Japan. Building China's eCanomy, which ha~ to progress
in a money-less condition, has no choice but to depend on their oil. They
do not know whether that oil will be forthcoming or not. That is the mean-
- ing of 'mansion built on oil."'
~
Even without saying anything about "the mansion built on oil," so far as ~
has been seen in the movement of China's economy in the first part of 1978,
the production of coal and crude oil for export to Japan has not been that
good.
- According to reports from China, "industrial production in the first part of -
1978 has grown more that 2.46%, compared to the same period in the previous
year, and has achieved more than 50% of the annual plan." But crude oil
and coal to be used to buy plants from Japan and others hav~ been limited
to an increase of 11~ and 19q respectively, compared to the fir�st part of
the previous year.
_ As a result, despite the fact that exports of mainly crude oil and coal in-
creased 29~ in the first part of 1978, compared to the first part of the pre-
vious year, the stage was reached where it cannot be helped but be said
that, as for imports, trade earnings and expenses ended up somewhat in the
black, since there was a rapid increase of 60~, compa.red to the same period
of the previous year, in the purchase of plants, machinery and survey equip-
ment indispensable for development. '
Uncertain Production of Chinese Crude Oil
If crude oil production really increases, if there a surficient export -
reserve, and if a stable supply can be promised, there will not be much of
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r~~serve ~nd if a stable supply ~an be promised, there will not be much of a _
problem, even though th~ir forr.~ula is to pay with Crude oil and coal which
wi11 b~'~roduced in thr. future, rathpr than paying for import costs with
_ Foreign currency. the costs of importing plant5 is to be paid by means df
crude oil, If commodities prdduCed in thos~ plants supply a market nf on~
billion p~ople, who are "ponr buy on the way td b~cnming a developed natidn,"
th~ people's ~tandard of living will rise artd an appreciation af the v~~1ue
ot the "Chou line withnu~ Chou" will also rise.
but, if the rate of growth of imp~rts C~ntinues to double as it d~~~� in the
f9rst part of 1978, compar~d with the growth of exports, they wil'? have to
~ appropriate part of th~ impnrt ~nst s~ttl~ment by ~~rning foreign currency
thrdugh "dumping" exports under the name of a politi~al price, witiiout b~ing
_ able to distribute through~ut the cduntry ~dmmodities produced in those plants
that have been intrnduced.
5hould that give rise to a Criticism of the purpose of modernization by the
Chinese people, the people promoting the "Chou line without Chou" wi11
turn a deaf ear to one billion people.
To tiie question supposing that "China does not have enouyh crude oil,", Shi-
c~Eru Konno, present vice-minister of MITi, says: "If that is so, Japanese
indu~try will be forced, willingly or unwillingly, to change its structi~re
wirh ~~~sperate methods." That is to say, if China takes an export offensive
for a political price, Japanese light industries would suddenly have to
close up shop and ?~vduld have to change their products substantially, because -
their products can not cope with the inexpensive Chinese ma~e products."
For the nations of A~ia, excluding Japan, the import surplus fr~om China, in
the amount of $1,701,900,000 dollars in 1976, and in the amount of 1,677,900, -
000 in 1977, v~ill grow even more. This will precipitate even mo re anti-
_ Japanese feelings in Asia. "We have had to suffer hardships because Japan
sold new, pov~erful plants to China." The blood pressure of those who see
_ improved Japan-China relations as a Japan-China conspiracy, cannot help
but rise, even if unwillinqly.
Dut, it has already been mentioned before that the growth of imports of in-
dustrial plants and the like to China is greater than the growth of China's
export of oil and the like. In addition to this, China negotiated imports
fror,~ Japan of plants in excess of 10 billion dollars for 19~8 alone, the
first year of the Japan-China long-term trade agreement. Besides this,
China has payments for deferred payment imports and for past debts. That
is to say, should Japan not purchase from China products other than the
exchange commodities k~hich they had agreed to purchase under the Japan-China
long-term trade agreement, the trade imbalance between the two countries
- will become even greater.
Officials Complain
The idea of the Japan-China long-term trade agreement is to balance trade
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by having ~hina purCha~e plants necessary for its mnderniz~tidn and Jap~n
impnrt crud~ ni1 and caa1, which ar~ the easi~~t Chin~$e pr~ducts for
Janan t~ buy, If th~r~ were a bal~nce in Japan-China trade ati present b~-
tw~~n the amount df mdney from Japan's impnrts, excluding crud~ oi1 and
cnat, and th~ anx~unt of money from ~hina's imports, ~xcluding industrial
plants, th~re wnuld be a balanc~ in Japan-~hina tr~ade, and trade would
_ iher~~s~, due to prnt~re~s promoted by the ldng-term agreement,
Howev~r, ~~ctual Japan-China trade has had no su~h luck.
During thE~ period from 1975 to 1977, Japan's export of plants was stagnated
by th~ de~~th of Pr~mier Chou and party Chairman Mao Tse-tung, the Hopei pro-
vince earl:hquake, and the incident of the purge of the "gang of four," When
Japan-Chiria tra~e statistics for 1977 are checked, there is hardly any men-
tion of plant exports among the list of machinery and other products.
Accordingly, ther~ would be no problem if there were a balance (substracting
crude oil and coal) between the amount nf Chinese exports to Japan and the
amnunt of Japanese exports to China in 1977.
However, ~iapanese expor~s of China in 1977 were 1.938 billion dollars;
Chines~ e>;ports to Japan were 820 million dollars, after crude oil and
coal are s.ubstracted from the total of 1.547 billion dollars. That is to
say, even in 1977, when Japan's export of industrial plants almost stopped,
there was an export surp'lus in Japan-China trade for Japan, amounting to
almost 1.~.20 billion dollars.
Granted th~ere was a balance just in the long-term trade, in accordance with
~ the Ja~,an-~China long-term trade agreement, linking Japanzse export of plants
with ChinE~se export of crudp oil and coal, but if there are transactions in
items othE~r than plants, crude oil and coal at th~ same pace as in 1977,
the Chine~;e deficit from Japanese trade will grow fat in the same way a
snowman t~ikes shape.
Therefore,. if Japan tries to balance Japan-China trade even slightly whjle
supplying capital goods, such as industrial plants China wants, there are
only two w~ays---either China would not purchase anything from Japan but -
industrial plants, or Japan would greatly increase the import of Chinese
products c~ther than crude oil or coal.
As for pur~chasing items other than crude oil and coal from China, there are
such things as processed foods, textiles and miscellaneous goods. These
products have a general similarity to the products which both Japan's nation-
al manufacturers and the nations of southeast Asia (who want a similar re-
vision in their trade imbalance) want Japan to purchase in increasing quan-
tities.
_ The executive staff of MITI's International Trade Policy Bureau is at the
point of making this complaint: "The more one thinks about it, the more
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one notic~s that there are many difficult qu~stions with Japan-China trade. -
We are ~he pnint in nur thinking that we want this easy-going mood about
J~pan-China friendship tn ~nd quickly."
One more reason why th~ MITI bureaucracy, who have been running to China
during th~se past ten months, began to run out of steam is that the modern,
new~~t, most powerful technology, mentioned on COCOM's indiscriminate enr
bargo list, which China wants is great---either because China is too con-
scious of its rivalry with the USSR or because of its aim for an effective
- political d~monstration against its own nation~l opposition factions.
_ Dealing With P~C Market Not ~asy
- International public opinion basically agrees with some relief on export of
technology to China, since the United States has a strategy against the USSR.
f3ut at most, this talk is within the framework of politico-economic arith-
metic, such as "raising China's l~vel to the level of autonomous technology
of the U5SR/Eastern Europe bloc would provide a balance between the USSR
and the PRC; there would not have to be any prediction of an "emergency"
situation between the USSR and the PRC," or "even though that level of tech-
nology is sold to China, it would be no loss to western governments,"
If the judgment is made that there is the possibility of having the effect
of some loss for the west, the United States tvould immediately ask for an
explanation, through diplomatic channels in Tokyo and Washington, as it did
when the resources development export funds from the Export-import Bank
were ~ffered to China.
P~evertheless, there is much ultra-modern technology that COCOM has prohibited
among the technology that China would buy from Japan, such as Nippon Steel
Corporation's automatic regulators for steel manufacturing, which include
large-scale electronic computers, and efficient high-level integrated cir-
cuit equipment, used for manufacturing, from Hitachi, Ltd. and others.
Even though it is said that "with the arrival of the US-China rapprochement
era, the United States is trying to strengthen China's power as a strategy
toward the USSR," the US posture toward China is that "even though it will
sell various products, it will not sell the newest technology," the same as
. its posture toward other socialist countries. Therefore, Washington is keep- -
ing a sharp watch on the exports of Japan and others, together with keeping
a sharp watch on the export of US made computers and computer terminal equip-
ment.
Shingo Moriyama, director of MITI's Machinery and Information Industries
Bureau, stated: "As for the newest technology, promising to export to China
and actually exporting to China are two different stories. The government
will confer with COCOM, while watching the state of progress in the business
transactions; bGC, even if brief, these transaction will involve difficult
negotiations, lasting more than six months.
53 -
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The export of a plant for Shanghait~~osh~nFoundry by Nippon St~el Corpora- -
tion, which has been in the newspapers of late as a large business tr~ans-
aCtion, based on the ~lapan-China long-term trade agreement, has not yet
been approved by COCOM, since computers ar~ involved.
One of the people in P1ITI's ~dministration expressed the opinion that "there
seems to be an overindulgence in technology" on the part of Peking, who is
frantic about getting the most modern technology. Perhaps this means that
their hunt for technology has gone too far.
The crotvds of people from Peking visiting Japan continued unabated. From
them, MITI officials came to know that China is planning to reverse-export
to Japan certain products produced in the plants introduced from Japan, in
order to alleviate the Japan-China trade imbalance.
This point is very clear---that China is trying to substitute in place of
cash payments for the cost of foundries and color television plants a
- production share formula (PS formula), whereby they send back to Japan iron/
steel products, color televisions and color television parts produced in
those same plants.
China came out with this method of in-kind payment because, after all, it
was difficult to get access to foreign currency.
However, Japan cannot take back, with a simple yes, the industrial products
made by a country whose level of technology is such that they have had to ~ -
send a mission to study quality control technology in Japan because they
have so many many problems with their quality.
Certain products have remained in Japan because of the US export regulations
on color televisions and other products. It is a fact that with regards to
iron and steel products, Japan has curtailed operations at its national
blast furnances. The sources of the headaches for MITI officials, who ran
off to China, have continued to increase of late.
Bleak Future for the 1980's
MITI officials think that their economic relations with such advanced coun-
tries as Europe and the United States will become quite bleak in the 1980's. _
The Society for Research on Internaitonal Trade and Industry Policy for the
1980's, under the leadership of Shinji Fukukawa, director of the Minister's
Secretariat Planning Board, is the group which will begin to put together
a vision of the 1980's. For the international economic societies of the
1980's, Fukukawa himself sees that "there ~vill be antagonism among the ad-
vanced nations and in the relations between the northern and southern hemi-
spheres; unemployment will increase, due to a prolonged period of 'stagfla-
tion,' caused by a weakening in the growth of European and American econo-
mies; protectionist movements, caused by political factors, will increase
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even more than now. B~c~use of that, an era of chaos will come in which
internatlonal ecnnnmic systems, having to dn with trad~, currency and energy,
will incr~a$~ ~he instabili~y further,"
7herefore, on the day the Japan-China long-term trade agre~ment was concluded,
Toshinobu Wada, vic~-minister at that time, mad~ this somewhat excited speech;
"From now on, Japan must attach greater importance to China and the Southeast
Asian countri~s, because exports to the Eurnpean and american markets have
already reached their ceiling."
_ Compared with the European and Am~rican markets, whose prospects for the
future are not very bright, the untouched PRC market of one billion people
perhaps seems very bright for Japan's economy.
Moreover, even MITI Minister Kawamoto, who knew business, could see that -
China, where the cultural revolution has been negated and where business
faction of ?eng Hsiao-ping's group took power, has become "business;like."
7he valley separating the economies of Japan and China narrowed; but, as
they came to understand China's financial circumstances and economic plans,
they realized deep in their hearts that China's waters aren't so sweet after
all.
Officials Wake From Their Dreams r
The Japan-China Joint Trade, Committee was opened in Peking on November 28,
1978, in order to look at future Japan-China economic relations. Agency
directors and vice-directors of both countries met together. Urgent econo-
_ mic questions were reviewed, such as the question of continuing the long-
term trade agreement, discussed during Kawamoto's China visit, financial
_ settlements, the question of giving preferential customs rates to China, -
China's crude oil exports to Japan, and revision of Japan's surplus exports
to China. Even at this conference, Japan was impressed with the fact that
Japan-China trade is not "rosey-red" by any means.
One of MITI's present executives, who participated in constructing the
scenario for the high-level growth of the 1960's, has been looking at giving
up on the "Chou line without Chou" from China, which wants to haphazardly
imitate the Japan of the 1960's. He said: "I can not think that the high-
level of growth of 'Japan, Inc.' is possible for them, because China's soci-
ety is different from Japan."
"China's administrative structure is tied up with the past inefficient ~
cabinet structure. P1orevoer, there is no department corresponding to Japan's
fiercely competitive private enterprise. Although one may try to count the
committees and departments in China that correspond to Japan's ministries
and agencies, there are too many to make comparisons with Japan. In addition
to this, the party's bureaucratic hierarchy is intertwined in such a complex
?vay. The conflict over authority never ends."
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roti nrric~nc, usr nN~Y
"Altihough they bring 1n advanced plants and technology, nn so~io-politic~l
~ basis has been built to advance the modernization program tio the point of
full operation. So China cannot help but hit a stone wa11, ev~n if they
speed up the present regime's modernization program. After all, hasn't their
political r~form advanced in installments?" -
Ne diagnosed China's modern9zation line in the abov~ manner, and continued
with: "Won't they perhaps settle into a repeat of the Soviet fo11y, wh~rein,
even though they bring in equipment and technology from the west, what re-
mains will be a huge loan debt, and wherein the masses of people have a blind
belief in the European and American style of life?"
It seems that finally the scales have fallen from the eyes of MITI officials.
MITI officials, cooling their China fever ten months after the Japan-China
long-term trade agreement, are once again trying to wrestle with the basic
question of how to heighten the security of Japan's economy for the 1980's,
without relying sn greatly on foreign demand for exports, together with re-
assessing the PRC market as calmly as possible.
Within this situation of apparently bleak national and foreign economies _
and of new changes in China's politics, having to do with the modernization
program---such as the criticism of the Mao-Hua regimes that began aqain on
November 19, 1978---, one MITI official, responsible for the area on China's -
economy, expressed the following: "When one deals on an economic plane with
China, who moves too abruptly, one cannot close his eyes to the aspect of
such abrupt changes in Chinese society. With reference to Japan's economy
and industry, China is a partner who cannot deal with the impetuosity peculiar
to the Japanese. To rush to the Prc market and expect much is difficult.
Isn't is just the ministers of some ministries and the economic news report-
ers for some newspapers and magazines who have overrated China's econorny
for Japan?"
COPYRIGHT: Bun~ei Shun3u, Ltd. 1979
94~n
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t~Uk c)1~ 1~ t(; t AL USL c1NLY
~CUNdMIC
GOLU, CXCIIANGC RCSL[tV~5 SUAE2 'TO NCW NIGH
Tokyo TH~ bAILY YbMIUItI in ~nglish 3~eb 79 p 4 OW
[Text] .lapan's gold and foreign exchange reserves increased slightly in
January, reach:ing ~nother nlltime of $33,109 million high ~C the end of
- the month, the 1'inance rfittistry announced Thursday.
- The $9~ million gain over the previous record of $33,019 milliott at the
end of Uecember was the fifth straighC monChly rise. -
'1'lie ~inance Ministry said January's reserves were the world's second
l~irgest, after West Germany which posted $52,136 million.
Tt~e ministry said it believed the trend of steep increases in Japan's
Eoreign exchange reserves has been put under control somehow, tt~anks to
growing imports and sluggish exports.
T{ie montti's ir;crease resul.ted from the government's purchase of Interna-
tLonal Aionetary Fund 5pecial Drawing Rights (SDR) amounting to $225 million
nnd exchar~~e ~ains during the month.
I3ut tl~e increase margin was rather small due to export-import banks loans
in foreign exchange Cotaling $245 million in the month.
The lo;.ins were extended for the first time in history for imports of
Eoreign-made aircraft for lease to a third nation, and far foreign-
registered sliips built in Japan and chartered by Japanese shlpping �irms
on a long-[erm basis.
COPYRIGHT: Yomiuri Shinbunsha 1979
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~ i:CdNnMIC
~ .
BUSIN~SS It~COV~Et5, UNEMPLnYM~NT STILL HIGH
Tokyo MAINICHI DAILY NEWS in English 6 Feb 79 p S OW '
(Text~ While bu~ine~s ~howed Bigna nf recovery 1.1ge year, a rec~nC labor
ministry report noted Chis did noe legd Cd ~ny imp1ovement in the employ-
ment situation.
The minigtry's ann~~l surv~y said business recovery was reflected in wages
and working houra.
LagC year's average monChly c~sh pay for a worker was 235,375 yen, up 7.1
percent over the previous year, the survey said.
It was a 3.3 percent increase in real wages over the previous year against
only a 1.1 percent rise in real wages in 1977 over Che previous year.
The rise in cash pay was remarkable in construction and real estaLe indus-
tries apparenCly because of effects of the government's public works pro-
jects.
Actual working hours last year totaled 172.5 hours a month, up 0.3 percent
over the previous year, the survey said.
Above all, overtime working hours increased by 2.9 percent last year over
the prevfous year and by 5.4 percent in manufacturing industry, the survey
said.
The ministry report said last year's overtime working hours in manufacturing _
industry reached 80 percent of thosF in 1973 before the so-called "oil
shock" t~gainst the ministry's yardstick of business recovery at 87 percent
of the 1973 level.
However, the regular employment index last year stood at 96.7 against the
Uase of 100 in 1975, down 1.2 points from the previous year.
The minisCry attributed the stagnant employment situation to the policy
of having employees work overtime to cope with increased work rather than
employing new recruits.
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A~ ~ r~~u1C, Che lgbnr Curndver rnee ~dr 1978 cong ~.7.6 percent in the
~mplnymenC rur~ ~nd 18.6 p~rc~nC in ehe reeirement r~Ce, ~hdwing ~XC~gg
df un~mplnymene.
C(~pYItYGHT: Mainichi Uaily News, 1g79
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~Oit O~~ICIAL US~ nNLY
~rONOMIC
PItIORITY GIVEN TO OIL SUPPLY PLANS
Tokyo MAINICHI llAILY N~WS in ~ngliah 6 Feb 79 p S
(Text] The governmenC plane Go give top prioriCy to minimizing Che impact
nn Japan of Che current�unsCable supply of oil, government snurces said
Monday [S Febj. A package of steps now under study calls fdr eollecting
lnfnrmation nn oil-producing cnuntries, promoting inCernational coopera-
tion, utilizing oil reserves, sCrengthening price conCrols on oil products
and urging Che nueion to save energy, the sources said.
Covernment experts agree that a proCracted cut in the supply of Iranian
oil will intensify a global ahortage of oil.
The government is paying considerable aCtention to Saudi Arabia, the
world's largest oil exporting country. Saudi Arabia increased oil output -
to 10-11 million barrels daily in October and November compared with its
usual output of 8,500,000 barrels. However, it has imposed a new ceiling
of 9,500,000 barrels a d ay, according to recent reports confirmed by the
government. The world supply-demand situation for oil will immediately
become tight if Saudi Arabia continues to keep the lid on outpuC, the sources
said.
The government hns so far failed to take drastic measures to save oil,
parCly because it war.ted to avoid disturbances like those seen in the 1973
oil crisis. The sources said the government plans to accurately assess the
oil situation for the nation, to call for readiness against unstable oil
supply. -
COPY2IGHT: Mainichi Daily News, 1979
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(;CONOMIC
OIL CONSCRVATION LIK~LY I55U~ AT TOKYO 5UMMIT
'Tokyo ASAHI ~V~NING N~W5 in ~nglish 6~eb 79 p 1 nW
['1'exC] Oi1 conservntion m~y b~ discussed nt Che Tokyn gummit nf ma~nr indus-
rri~l demncr~cies in June.
The Eirst prepuraCnry meeting wi11 b~ held in Tokyo on 22-23 Murch Co discus~
the ngenda uf Che summit und Che roles to be played by Chc participatittg
countries.
5i?ice ttie summit will t~ke place nmid mounCing criticism of Japan's massive
current uccount surplu~, the government i~ likely to have a hard time frnm
tlie prc:p~rntory sCage.
_ In unofficial talks between Japan and Che other pnrticipating nations, strong
opinions tiave been expressed that in view of the politicnl crisis in Iran,
Cl~e Tokyo summit should make energy as an important item on the agendn.
As a result, a common sCraCegy for oil conservation may become a key
theme of the summit, depending on developments in the international oil
situation in the days ahead.
Deputy foreign Vice Minister Hiromichi Miyazaki will preaide over the
preparatory meeCing. Delegates from the United StaCes, Wes t Germany,
France, Britain, Italy and Canada will participate in the capacity of
personal representatives of the tieads of government of the six coun[ries.
COPYEtIGHT: Asahi Shinbun Tokyo Honsha 1979
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~CONOMIC
BRI~F'S
ENGINEEIt5 OVERS~AS--The MiniaCry of InCernaCional Trade and IndusCry (MITI)
has announced thnC 130 technicians will be sent overseas to help developing -
natinng. Last year only 48 experts were dispatched eo other counCries as �
parC of Japan's economic cooperatiott programs. MITI had orig3nally wanCed
Co send 220 people overseas during fiscal 1979. The scienCisCs and tech-
nicals will be part of a program set up by the Japan Overseas Development
Corporation. ~ighCy of them will live abroad for three monrhs and the rest
will stay cverseas for eight or nine monChs. [ExcerpC] [Tokyo ASAHI
EVENING N~WS in English 13 Jan 79 p 3 OW]
JANUARY EXPORTS--Japanese exports on a letter-of-credit basis Cotaled
_ $5,493 million last month, up 17 percent from a year earli.er. The figure
compared wiCh December's year-to-year increase of 10.9 ,r,ercent, tt:e slowest
12-month rise since a 1~0.1 percent registered in July, 1971. Meanwhile,
seasonally-adjusted L/C exports rose 1.5 percPnt from December to $5,709
million. In yen terms, January L/C exports totaled 1,084.2 billion yen,
up 4.2 percent from a month ago. Item wise, exports of chemical and steel
products regiatered fairly large increases while automobiles, general
~ machinery, electrical machinery and textile products dropped below Che
year-earlier level. ExporCs to the United States CotalQd $1,753 million,
up 2 percent from 12 months ago. Shipments to China more than doubled from
the year-before level. ~Tokyo MAINICHI DAILY NEWS in English 3 Feb 79 p 5 OW]
5PANISH STEEL MILL--Sumitomo Metal Industries, Ltd., of Osaka said Friday
that it would begin extending technological help shortly to a Spanish steel
company which is to embark on the production of quality wire rods. The top-
rate Japanese steelmaker said it had signed a contracC for such technological
cooperation with Ensidesa Verina, a government-owned steel company of Madrid.
Under the contract, Sumitomo will send several technological instructors to
Spain, beginning with two to leave Japan next month. Sumitomo will also
train a number of workers of the Spanish company at its Japanese mill.
[Tokyo MAINICHI DAILY NEWS in English 3 Feb 79 p 5 OW] _
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