JPRS ID: 10626 JAPAN REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000500070072-0
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 68
• Document Creation Date: November 1, 2016
• Sequence Number: 72
• Content Type: REPORTS

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
FOR OFFICIAL USE ONLY
JPRS UlOfa26
30 JuNE 1982
Ja an Re ort
p ~
(FOUO 37/~2)
FOREIGN BROADCAST I~IFORMATeON SERVICE
~
. FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPR~VED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
NOTE
JPRS publications contain information primarily from foreign
newspapers, periodicals and books, but also from news agency
- transmissions and broadcasts. Materials from foreign-language
sources are ~-ranslate~; those from English-language sources
are transcribed or reprinted, with the original phrasing and
other characteristics retained.
Headlines, edirorial reports, and material enclosed in brackets
are supplied by JPRS. Processing indicators such as [Text]
or [Excerpt] in the first line of each item, or following the
last line of a brief, indicate how ths original inforroation was
processed. Where no processing indicator is given, the infor-
mation was summarized or extracted.
Unfamiiiar names rendered phonetically or transliterated are
� enc?osed in parentheses. Words or names preced~d by a ques-
tion mark ar.d Pnclosed in parentheses were not clear in the
original ~ut have been supplied as appropriate in context.
Other unattributed parer.thetical notes with in the body of an
item originate with the source. Times within items are as
given by source.
The contents of this publication in no way represent the poli-
cies, views or at.titudes of the U.S. Government.
COPYRIGHT LAWS AND REGULATIONS GOVERNING OWNERSHIP OF
MATERIALS REPRODUCED HEREIN REQUIRE TIiAT DISSEMINATION
OF T'HIS PUBLICATION BE RESTRICTED FOR OFFICIAL USE ODTLY.
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500070072-0
FOR OFFICIAL IJSE ONLY
~PRS L/10626
30 June 1982
JAPAN REPORT
(FOUO 37/82)
CONTENTS
POLITICAL AND SOCIOLOGICAL
Rumor of F`ukuda-Komoto Secret Pact Reported
( ror~uxz sHIr~urr, 2~+ rr~..y 82 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Difficulties of Labor Unification Committee Reported
( NIHON I{rIZAI SHIMBIIN, 3 1~ie,y' 82 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
MILITARY
Status, Potential of Defense Industry Dis cussed
(Katsuto Uchihashi; BUNGEI SHUNJU , May 82) 6
. ECOPIOMIC
Agriculture White Paper for 1981 R:.vie~ad
(NIHON KOGY.O SHIMBUN, 12, 15; 19, 22, 26 N1ay 82~............. 22
SCIENC'E AND TECHNOLOGY
~ MITI Policy Giucies Plaaining in Various Industries ~
(Various sources; vaxious dates) 33
Coa.l Liquefaction Technologies
Petrochemical Industry Reorganization
Sto ckpi le o f Rare Met a1s
_ Facilities Investment in 1982
Copper, Lea.d, Zinc Production
Automr.:~ile Parts Industry's Struggle Investigated
, (NIKKE:[ SANGYO SHIMBUN, various dates) 39
Problems of Automobile Parts Industry Discussed
(NIHI{EI SANGYO SHINIBIJN, 6, 7,, 1~+, 20, 21 Apr 82) 55
- a - [III - ASIA - 111 FOUO]
FOR OFFICiAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
~
POLITICAI, AND SOCIOLOGICAL
RUMOR OF FUKUDA-KOMOTO SECRET PACT REPORTED
~ Tokyo ~OMIURI SHIMBUN in Japanese 24 May 82 p 2
[Text] The Suzuki and Tanaka factions of the LDP took the drastic central
strategy meas�~re of calling for a long extension of the present D:iet session.
Behind this move is the rumor that a pact has been made between farmer Pri~e
Min~ister Fukuda and Director of the Economic Planning Agency Komoto in
connection with the upcoming election for LDP party president this fall. This
rumor of a"secret pact between Fukuda and Komoto" has been circulating
recently in governmen~ ~~rcles.
Fukuda and Komot say that "the very idea of a secret pact is ridiculous," and
" laugh it off. Howeve:r, three factions, Suzuki, Tanaka, and Nakasone, are
getting very nervous about the true state of affairs.
The content of the secret pact rumor is as follows. Komoto visited Fukuda in
' his office in Tokyo on the afternoon of 27 April. After discussing issues
related to management of the economy and government finances, the two men had
a discussion on the present political situation.
Fukuda is reported to have seriously criticized the Suzuki government:
"Recently, many people in the party are saying, 'We cannot understand what
Prime Minis~er Suzuki is doing in either foreign or domestir_ policy.' If
things keep going this way, circumstances may be such that_ the prime minister
- will have to resign in the middle of his term amid great_ diffj.culties."
In response, Mr Komoro said that he understood the tmport of what Mr Suzuki
had said, but he said only that the problem was a very serious one and avoided
a more direct reply. However, it is reported th:st he was in virtual agreement
in his attitude toward the ~uzuki government pc::licies.
Zn addition to this discussion, the rumor has gone so far ss to describe the
content of the "secret pact" as a plan for~ former Prime Minister Fukuda to
take over as a relief player if Prime Minister Suzuki fails to be reelected
and resigns and then for Komoto to takz over a year later.
Observing tl~is movement, the Suzuki and Tanaka factions were afraid that the
government would fall at once if ~che Public Election Law revision bill
advocateri by the Fukuda and Komr.to factions were not passed. During the
1
- FOR OFFICIAL USE ONLY '
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
~ FOR OFFICIAI. USE ONLY
,
- period of the May hoiiclays, Kuniyoshi Saito, a close associate of the prime
minister, met with fornner Prime Minister Tanaka and Party Secretary Nikaido.
' Following the May holidays, on tYie evening of 6 May, Prime Minister Suzuki
and Party Secretar~~ Nikaido talked for appr~ximazely 2 hours at a Tokyo
restaurant. After this discussion with the prime minister, Mr Nikaido went
- directly to rhe Meijiro residence cf former Prime Ministe~l Tanaka ar~d confe~red
with former Prime Minister Tanaka and Masaharu Gotoda (chairman of the
electoral system study comnittee). 'ihe decision was: "We will give fu11
support to passage of *_he Public ilection Law proposal. A long extension of
the Dizt session is unavoidable."
Informed sources say that the source of the rumor of the "Fukuda-Komoto secret
pact" is the leadership of `he two factions. The rumor began going around at
the beginning of this month. The following facts are offerea as a basis for
this speculation although they are only c~rrumstantial evidence. 1) Although
there have been other people present at previous discussions between Fuk.uda
and Komoto, this time they talked alone for 50 minutes. 2) The discussion
was not announced until the day it was held. Mr Komoto has recently been
rather forward in making statements in meetings of party leaders and cabinet
= meetings. He has had frequent clashes with Administrative Management Agency
Director Nakasone, his rival for the pesition of prime minister after Suzuki.
4) Fududa's mentor, former Prime Minister Kishi, has stated that "we cannot
get th~:ough the present difficult:ies with Suzuki. Iiow about bringing back
Fukuda?" ~
An old poltticis~,. unaffiliated w~1th any of the factions says: "We will soon
find out whether this secret pacC rumor is true or strategic propaganda. The
political world right now, both ~he ~uling and the opposition parties, is in
pandemonium." The movement by the Suzuki and Tanaka factions to forcefully
push through a policy of "reelection of Suzuki" is especially active recently.
On the evening of 21 May former Prime Minister appeared at a gathering of
Diet members in the Suzuki faction who have been elected three or four times
~nd said: "Prime Minister Suzuki will be reelected in the fall elections for
president of the LDP." Also: "Next year tlie elections of both the upper and
lower hoiises will take place on the same day." Contact between the two
factions has heen frequent.
Future developments in political power will depend un whether a collaboration
develops between Fukuda and Komoto, and this circumstance gives rise to
speculation.
COPYRIGHT: Yomiuri Shimbunsha 1982
1
9651
CSO: 41C~5/121
2
. FOR OFFICIAL USE OI"ILY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
POLITICAL AND SOCIOLOGICAL
DIFFIGULTIES OF LABOR UNIFICATION COMMITTEE REPQRTED
Tokyo NIHON KEIZAI SHIMBUN in Japanese 3 May 82 p 4
[Text] The meeting of the labor front snification preparatory committee
came to a standstill over the problem of participation by the secGad group
of Sohyc !General Council of Trade Unions of Jspan) unions. However, on
8 April approval was finally given for inclusion of seven single-industry
Sohyo unions including the General Federation of Private Railway Workers
Unions of Japan. This was a ma.jor progressive step in reorganization in
preparation for the inauguration of a"private-sector union conference"
this fall. I3o~.r the preparatory committee will shift the focus of debate to
the major issues of policies for action and an operating platfo rm based on
the "fundamental concept of unity." However, the second group of Sohyo unions
is critical of the "fundamental cor.cept" itself, and some unions maintain that
~ participation in the preparatory committee is separate from participation in
~ the conference. Therefore, further complications involving a power struggle
~ between Sohyo and Domei (Japan Confederation of Labor) are expected before
the conference is organized.
Domei Disregards Small Differences
- Seven singlP-industry Sohyo unions applied to participate in the preparatory
committee on 26 March. These include the General Federation of Private
Railway Workers Unions of Japan, the National Trade Union of Metal and
Engineering Workers, the Japan Coal Miners Union, Zen~iko, Seniroren,
Zendearyoku, and rhe Federation of ~aper and Pulp Workers Unions. However,
at the preparatory comn?i.ttee directors meeting on 27 March, the Domei single-
~ industry unions strongly affi~m,~d that: 1) the fact that the seven Sohyo
unions have r.ot made an offi.cial resolution of support for the fundamental
concept iG urocceptable and 2) it is unnatural to approve of block
participation by only the second group of Sohyo unions, and separate ~udgments
sllould be made for each case.
Domei single-industry unions (such as Zenkin Domei, Zensen Domei, an~
= Denryoku Soren) are in competition with six of the Sohyo single-industry
~ unions--all of them except the General Federation of Private Railway Workers
Unions--so the confrontation was emot~.onal and resistance stiff.
3
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500070072-0
FOR UFFI~IAL USE ONLY
In the general meeting on 1 April, only two points were confirmed: 1) that
the factual proceedings of the preparatory committee up to that point would be
honored, including d~cisions that "action policies and the operating platform
' will be discussed on the basis of the fundamental concept" and th~t "a
cohf erence will be held within the year," and 2) that adjustments would be
made between single-industry unions which are in a competitive relationship.
This coordtnating and adjustment process was entrusted ta the director in
chargP, Chairman Nakamura of the Federation of Iron and Steel Industry Workers
Unions.
The Domei single-industry unions, such as the Zenkin Domei, continued the
attack, saying: "An official resolution should be passed to the effect that
the factual proceedings will be honored." However, the National Trade Union
of Metal and Engineering Workers decided to participate even while it
ret.ains an internal faction opposed to the preparato ry committee. Therefore,
Chairman Tabuchi of the Nippon Express Company union has said that the demand
of Zenkin Domei is "impossibly difficult" to carry out.
Because of this situation, the f irst Sohyo group of f ive single-industry
unions (including the Federation of Iron and Steel Industry Workers Unions
and the Japanese Federation of Synthetic Chemistry Wo rkers Ilnions) walked out .
of the directors meeting on 16 April to demonstrate their stern attitude to
Domei. Part of the Sore~?go, including the Denki Roren, made a hardline
proposal to act in concert with them. So tiiere was a bad atffiosphere in the
meeting for a time.
Following the directors meeting, no definite date was set for the preparatory
committee meeting and it became doubtful that the co nference could be
organized within the year.
Because of these developments, Domei increasingly came to believe that it
should "disregard small differences and cling to large areas of agreement."
Therefore, in the 8 May directors meeting a decision was made to permit trie
participation of the second Sohyo group.
Enemies on Board the Same Ship; Stormy Condition~
With this decision, 47 sing~e-industry unions (wtth 4.3 million members) were
brought together in the preparatorv committee, thus assembling all of the
impo rtant private sector unions. As the foundations of Sohyo weaken,
conditions have been created for building the core of a new labor movement.
The preparatory committee may transform itself into a private sector union
conf erence as early as this fall, so it will now begin serious debate on
action policies and an operating platform. On the basis of this action policy
and operating platform, o:~ch single industry will decide whether or not it
will participate in the conference during gener2~1 meetings and central
committee maetings which will be held ln the period from siumner to fall.
However, there are several more hurdles which the preparatory committee must
cro ss befare it can make the leap to becoming a confexence.
~
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500070072-0
One problem is that the comnittee now contains seven single-industry Soicvo.
unions which are crirical of the "fundamental concept of unity." Theref_ore,
the situation For debate on the action policy and operating pla~tform, which
shoul.d be drawn up on the basis of the fundamental concept, will be that of
"hitL-er enemies placed together on the same ship." It is highly doubtfui that
the proceedings can be completed {n time for the summer meeting.
The paper and pulp union, for example, attached a"Basic Policy for F'articipa-
tion" to its applicatio~~ for participation in which it stated tHat "it is
necessary to point out specific problems and clarify the points that: should
be criticized in the fundamental concept" and clearly presented five
criticisms. Chairman Kurokawa of the General Federation of PrivatF: Railway
Workers Unions is readq for the attack: "When the prepar�atory com~mittee
meeting begins, we will have our say (about the fundament~l concept)."
Chairman Kurokawa is also chairman of the Sohyo council of private sector
unions, so he is aware of the existence of 18 other Sohyo single-in~iu~try
unions, and it iG not at all likel.y that there will be an easy compi:omise
on the action policy.
Oppo~ition to Rapid Organization of the Conference
The second group of Sohyo singl e-industry unions are not only skeptical about
easily reorganizing into a conference, they are making a sharp distinction
between participation in the preparatory committee and partic:ipation in the
conference. For example, the "Basic Policy for Participation" mentianed above
states that "we do not favor a quick inauguration of the cor?ference" (General
Federation of Private Railway Workers Unions) and "particig~tion in the
preparatory committee and participation in the future conference are separate
problems" (Zendenryoku).
Chairman Kurokawa of the General Federation of Private Railway Workers
Unions states: "We will think of the preparatary committee ~s an opportunity
for expansion of joint struggle. We uiill decide whether or not to participate
in the conference after seeing how the preparatory committee grows and after
judging its level of maturity."
The transfox~mation of the preparatory committee into a conference will be quite
difficult. It ~yill be a steep climb overcoming differences to grow further
from a conference to a federation and then to a national central organization
~ahich can overpower Sohyo.
~ COPYRIGHT: Nihon Keizai Shimbunsha 1982
9651
CSO: 4105/105
5
FOR OFFICIAL US~ ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500074472-0
~
FOR OFFICIf~L USE ONLY
MILITARY
STATUS, POTENTIAL OF DEFENSE INDUSTRY DISCUSSED
Tokyo BUNGEI SHUNJU in Japanese May Special Issue 82 pp 150-161
[Article by Katsuto Uchihashi, economic criticJ '
[Text] If Japan desires it, the country can become a highly
competitive arms exporter within a short time, and the world
is taking precautions.
Although Defense Expenditures Are Said To Protrude....
Every New ~Year's Day, the Japanese Arms Manufacrurers Association holds a New
Year`s get-togeth~r at the J3pan Industrial Club in Otemachi, Tokyo.
If each member company went to the Defense Agency and other government offices
to deliver its New Year's greetings individually, the waste of various kinds
would be enormous. In order to economize, the Japanese Arms Manufacturers
Association decided to bring people from the government offices together in one
place 20 some years ago.
For the last 3 years, the number of people attending the New Year's ~arty has
been increasing rapidly. The number of participants exceeded 600 both this
year and last year.
"Since the old site became too small, 3 years ago we changed the location of the
party to the Japan Industrial Club, which has a large hall," exp3:ained Jinshichi
Hirano, the association's managing director.
"However, we are not in high spirits. No company is pleased to have increased
w~rk," he adds cautiously. Nevertheless, there are nat many industry organiza-
tions with only 99 participating companies that can easily gather 600 executives
in one place at one time.
On the other hand, Gaku3i Moriya (a counselor ~to Mitsubishi Heavy Industries),
chairman of the Federation of Economic Organization's Defense Production Com-
mittee and the general controller of the Japanese defense industry, says that
the present atmosphere in defense industries reminds him of the fever 30 years
ago around 1952, when resumption of aircraft production was permitted as a
result of. the signing of the peace treaty.
6
FOR OFF[CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500070072-0
~ ,
"We began with the repair oP U.S. military aircrsft, and then moved on to
licensed production of fighters, training airplanes, and escort ships. I
remember the atmosphere of that time. Although the market was small, every
manufacturer was trying to plunge ~,nto the field (arms production) with almost
ahnormal energy...."
At that time, Mr Moriya was engaged in the just resumed aircraft production at
_ the Nagoya Aircraft Factory of the New Mitsubishi Heavy Industries Company.
According to him, related companies, parts makers, and subcontra:.tors all
rushed daily to the New Mitsubishi Heavy Industries, pleading "let us help,
let us help."
"Even though they asked us to let them help, the work itself was very little....
Nevertheless, they were very enthusiastic. I now sense the same atmosphere
that was generated 30 years ago."
Mr Moriya says what everybody else in defense industry says: "Although people
clamor against protrusion of the defense budget, there is no other country
with a defense budget within 1 percent of its GNP. There is no way fcr the
defense industry to experience a boom or fever." Empahsis was placed on the
last sentence.
How true is the phrase: "The arms industry is always hungry"? The following
_ words of Kenji Ikeda (managing director of Mitsubishi Heavy Industries), chair-
man of the Federation of Economic Organizations' Defense Production Committee
Policy Subcommittee, seem more or less to represent the attitude of business
leaders related to the defense industry: "I do nc:, expect Japanese defense
demand to expand by much. Although people clamor against the nrotrusion of the
~ defense budget, the ratio of Japanese defense spending to the total general
account was actually 5.1 percent last year and 5.24 percent in 1980. Tt is
5.2 percent this year, which is about the same as 1980 or even a little less.
In the past, there was a year when it was 13 percent. The reality is that the
ratio of defense spending to the total general account budget has been gradually
decreasin~. ~ven if it has been increased from 5.1 percent to 5.2 percent, it
has not shaken up our budgetary system at all." Mr Moriya's way of thinking
seems to be the same. He says: "I do not like the ratio relative to GNP."
Not the ratio relative to GNP but the ratio relative to the total general
account, moreover, not an absolute amount but a percentage--this is the consen-
sus among leaders of the defense industry.
Of course, even though the percentage remains unchanged, the absolute amount
increases. In the case of Japan, where arms exports are not permitted, no
matter how the defense budget is expressed--whether in percentages or in abso-
lute amounts--the only market for the defense~industry is in the defense budget.
Of ttie defense budget, what directly affects the business of defense-related
companies is "equipment expenditures."
Mr. Tkeda declares that "the ratio (of equipment expenditures bo the total defense
budget) was 24.5 percent last year and it is 24.4 percent this year. Precisely
speaking, it has been decreased rather than increased. Under these conditions
a defense industry boom cannot happen."
7
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500070072-0
FOR OFFICIAL USE ONLY
'l'he condition of arms makers belonging to the Japanese Arms Manu~acturers
Associatiun seems more or less the same. "The ratio of ~ef ense Agency sales
to total company sales is only 1.6 percent on the average for member companies.
The fact that we have been conducting a petty business for the Defense Agency
in a tiny corner of a huge company has not been changed from earlier days,"
emphasizes managing director Hirat?o.
At the same time, however, the Japanese Arms Manufacturers Association has been
receiving applications far membership one after another. Just recently, four
special steel makers are said to have applied for membership, sayin~; that "we
want to resume production of shells since the prospects for automotive demand
for steel are gloomy."
In spite of def ense industry leaders' denials of a defense industry fever, tne
Japanese defense industry seems more flourishing than ever.
Briefly speaking, although those responsible for the Japanese defense industry
see the market neither having expanded substantially in the recent past nor
assured of rapid g~owth in the near future, it is also true that the atmosphere
surrounding the defense industry is astir with excitement as`it was 30 years
ago.
Why is it astir? Mr Moriya gives us a hint.
"Companies seem to have an eye on 'futures.' Everybody ~cnows that a company
cannot suddenly get a huge contract and earn a huge profit. We cannot entirely
deny that there was an expectation of `dreams come true once again' 30 years
ago. This time, however, no one has such expectations. Then, what aspect of
the defense industry's future does everybody have an eye on? I think it is
technology. For years now, arms have been such that they have had to be based
on the most advanced science and ter_hnology of the time. A feeling that new
technologies are emerging now and that we should not fail to catch them.... I
think that is it." The economic slump is worldwide. Japan's exports are
tapering off. Under these conditions, we cannot completely deny the industry's
hopes for defense demand, which at least will not decrease in the future.
If the def ense industry fever is caused not by interest in the size of the
market or t_he possibility of growth, but instead in the technologies involved,
it tells us that the Japanese arms industry is moving into a completely new
phase today.
Advancing Autonomous Development of Military Technology
In fact, tHe desire and concern to obtain an accurate grasp of the actual con-
dition of the Japanese defense industry has been rising in foreign countries.
THE FAR EASTERN ECONOMIC REVIEW, an economic ~ournal issued in Hong Kong, in
the second week of December 1981 published a detailed special article on
Japanese defense industry, entitled "Industrial Japan '81: Space Age Samurai."
8
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500074472-0
FOR OFFICIAL USE ONLY
It even lias a list of the 20 companies, such as Mitsubishi Heavy Industries and
Ishikawajima-Harima Heavy Industries, with the most contracts with the Defense
Agency.
FUI~EIGN AFFAIRS, a special journal on diplomatic relations issued in Engl~tu~,
puhlished a paper which predicted that "by participating in world arms exptfrt
competition, Japan will violate the American sanctuary." The paper also re-
� ported that "Japan wi11 have nuclear arms in the not too distant future"
(winter J981-82). The U.S. Council on Foreign Relations (David Rockefeller,f
chairman, a research organ on international problems) perhaps expressed ttie most
obvious interest and concern about the Japanese defense industry which has been
becoming stronger at a high pitch.
In a 352-page report published in January 1982, the Council on ~Foreign Relations
is said to have warned that "how to hold down the Japanese defense industry will
be one of the most difficult tasks facing Europe and the United States for the
rest of this century" (ASAHI SHIMBUN, 25 January 1982).
(The previously mentioned paper published in FOREIGN AFFAIRS is "Arms Sales:
Ttie New Diplomacy," which is a sum~nary of the 4-year study written by Ur Andrew
Pierre, a senior researcher at the Council on Foreign Relations.)
"T_here is no field impossible for the Japanese arms industry to handle. Once a
political decision is made, Japan can become a middle-ranking arms exporting
- country almost overnight." "If the pressure on Japan to increase defense power
is too strong, it will create the fear that Japanese defense industry will start
running independently on its own." This common recognition can be observed in
many foreign papers.
While those who are responsible for the Japanese defense industry are saying
"Oh, no," the United States, a military superpower unrivaled in the scale of its
defense industry, watches the Japanese defense industry carefully.
They are not interested in the peripheral matter of the quantitative increase in
the size of the Japanese defense industry, but in the potential value of its
military technologies.
- We must pay attention to the coincidence of their interest in technologies and
the suggestion of Mr Mori.ya.
Such rec~gnition by the United States and other foreign countries seems to have
reasonable grounds. They have certainly recognized with a considerable degree
of correctness the new phase the Japanese defense industry is entering.
~irst, t}~e Japanese def.ense I.ndustry is trying ko escape as much as possible its
E~~;~~ ciependence on licet,sed U.S. technologies. The Japanese defense industry
is beginning to proceed intentionally toward "autonomous develcpment" of mili-
t~~ry technologies.
Second, widely applicable civilian technologies, which are the bases for our
domestic military technolo~ies, have reached a high level. In the areas of
, 9
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
FOR OFFICIAL USE ONLY
~ electronics and production technologies, in particular, the trend is obvious.
In the case of Japan, whic'n has a unique mechanism of technology transfer from
civilian to military use, raising the level of civilian electronics and pro-
duction technologies means strengthening potential capability in military tech-
nology.
7'hird, Japan has begun to possess a system for "militarizing technology," which
enables transfers of high-level civilian technologies to military uses in a more
efficient manner.
The above-mentioned three trends have been progressing simultaneously. Under
these conditions the Japanese defense industry has gained more capability than
anticipated, and for this reason the Japanese defense industry is moving into
a new phase.
~t present, the Japanese def ense industry is at a stage where the primary
interest is not on the size of the defense budget--the size of the market--but
on the high-level quality content of Japanese military technology. .
First of all, let us use a familiar example to illustrate the mechanism of
transferring a widely applicable civilian technology to military use.
What Is the CCD upon Which Intent Gazes Are Focused?
Neither film, development, nor printing is required. An image on a TV picture
tube can be recreated the moment a picture is taken. Sony's announcement that
it has succeeded in the development of the "Mavica," the world's first magnetic
camera, was reported not only by Japanese media but also by foreign media.
BUSINESS WEEK reported Sony's announcement together with a two-page commentary.
'Che story created a worldwide impact last sunnner.
_ Another foreign journal specializing in cameras revealed the magnitude of the
- shock by writing that a camera not requiring film would be something like a
- water tank not requiring water for fish.
The designers of the Mavica were able to separate the camera and the film, which
were supposed to ha~~P an inseparable relation, simply by placing a small magnetic
disc in a camera box
Instead of being recorded as a volume of light on silver film, as in an ordinary
camera, images are magnetically recorded on a disc small enough to be held in
the palm of the hand.
"Video is intended for motion pictures whereas Mavica is intended for station-
ary pictures. As Sony itself expl~ins, Mavica's magnetic disc may be considered
- something like a long tape for tape recorders and video recorders that has been
chopped into small rectangular pieces (the dimensions of a piece are 3 mm in
thickness, 54 mm in width, and 60 mm in length, and it can record 50 pictures).
When a tape is played in a taperecorder, sound recurs. When a video cassette
tape is played, visions are regenerated. In the same manner, a magnetic disc
can recall stationary pictures on a TV picture tube as many times as desired.
.
10
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPR~VED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
- F4R OFF[CIAL USE ONLY
Iteports on Cilmless cameras have followed one after another. This year, Sony
has reported the establishment of a firm footing in the practical application of
a printer which would print pictures as cardsized photographs.
Considering that 8 mm cinemascope was replaced by v?deo cameras, it is no wonder
that Fear oi the decline of opitcal cameras spread thr4ughout the camera, film,
and llPE industries.
- i-Jhen the news was report~d, however, professional technologists must have
. recognized immediately that a seemingly revolutionary magnetic camera was in
- Fact based on only three Element.ary technologies.
The fir.st technolog~ is a precise processing technology that enables th~ ~acking
of an enormous number of parts into a space as small as an existing camera_:~~ The
- second technology is a series of technologies which enable high-density visual
signals transformed into magnetic signals to be recorded on a magnetic disc.
But, more than anything else, it requires the technology of an elemental device
which can receive optical energy from the object on which a camera is focused
and transEer it with high precision onto a magnetic disc.
'Phe third technology, which plays the mosr important role, is a CCD (charged
coupled device).
A CCD is a completely new type of semiconductor which, after receiving the
optical energy of a subject, transforms it in~~ electrical signals and then
stores them as they are or transfers them somewhere else. Thanks to a CCD,
the Mavica could replace film with a mag.letic disc and eliminate film from the
camera. It is quite natural that engineers gazed intently at the CCD used in
the hiavica. -
"How analytically capable a CCD can Sony mass-produce at how low a cost?"
aslced engineers around the world. Soon it became clear that military engi~.ieers
were among them.
An immediate reaction came from the British Ministry of Defense. It asked Sony
about the possibility of providing the British Defense Ministry with the CCD
technology as well as requesting a sample of the CCD.
Since the Defense Ministry made the request, there is no doubt that its inten-
tion is to use the CCD For military purposes.
1t was later reported that MITI, unofticially consulted by the British, said
that "thc three principles for arms export" made export of the technology
imi~ossible.
'Che theory of the CCD was originally discovered by Bell Laboratories of the
Uriited States. As usual, however, its practical applications were developed
Eirst by the Japanese. A CCD was used as the eye of VTR camera instead of a
- pickup (camera) tube, a kind of vacuum tube. Not only Sony but also Nippon
Electric Company, Toshiba, Hitachi, Mitsubishi Electric--almost all of the
11
FOR OFFIC[AG USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2407/42/09: CIA-RDP82-40850R000500470072-0
a
FOR OFFICIAL USE ONLY
semiconductor makers--have been mobilizing engineers ta compete vigorously in
tt~e CCD field. Nevertheless, the high wall of high production costs has yet to
be breached.
Sony is said to be one step ahead in the CCD, including the development of new
materials for the CCD.
A CCD is a semiconductor only about 1 cro square in size (an ordinary semicon-
ductor is 5 mm square), and at a glance it looks just like a piece of something
filled with an enormous number of dots (vision elements--currently about 200,000
can be placed on a chip. The more vision elements there are, the higher the
analytical capability.). Can such a semiconductor really be transferable to
military uses? The question does not need asking; the Japanese Defense Agency
is already seriously engaged in development of military applications for the
CCD.
Its intention is to develop an IR-CCD (CCD with infrared sensor), which is a
combination of a CCD and an elemental device capable of detecting infrared rays,
and to apply it in the homing device of a missile (it is possible to apply the
CCD as it is for military use).
The course a missile with an IR-CCD eye will follow after launching is clear
~ from the previous explanation of the magnetic camera.
The missile detects infrared rays from an enemy fighter by sensor and concurrent-
ly recognizes and memorizes the image of the enemy fighter by CCD. Once the
image is memorized, the missile will chase thz enemy fighter and constantly
correct its direction until it hits the fighter.
The Defense Agency has commissioned Toshiba, Mitsubishi Electric, and Fujitsu
to do the research. If the IR-CCD is perfected, it will also be used in a
ha~id-carried SAM (a small surface-to-ai~r missile that Toshiba has been develop-
ing with its own technology).
Thus, a revolution will occur in the precision with which a missile hits its
tar.get.
~ No Distinction between Civilian and Military Uses
Nee~less to say, the CCD is only one example of electronic high technology that
can be converted to military applications. The opitcal fibers, the laser, the
VLSI, the photoelectron--all possess the s~.~me capability.
- "The roots of the radar, sonar, and automatic control technologies widely used
;:s civilian technologies today are military technologies developed during World
War II. The military technologies were ueveloped for civilian applications.
Recently, however, new advanced technologies intended for civilian use and
- supported by enormous demand in civilian industry have been progressing remark-
ably. The number of these technologies whic'~ are convertible to military
applications has been increasing. Some technalogies can be used for military
_ applications without adding special specifications. Some technologies can be
12
FOR OFF'ICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500070072-0
FOR OFFICIAL USE ONLY
converted to military use by raising the grade to military specifications,
Today, very strict, high-performance qualities are required even for industrial-
use technologies. Thus, the basic conditions for converting civilian tech-
nol.o~ies to military applications through qualitative improvement can be said to
have been already established in Japan" (Keiichi Fukuizumi, manager of the In-
duction and Photoelectron Department of NEC).
- Taking the case of the VLSI as an e~a?iaple, the only differences between civilian
applications and military applications are: 1) "the temperature range" varies
at the time of use, and 2) "guarantees of reliability" are required in military
ap~lications.
Revo~utionary electronic products have been introduced into the peaceful world
of hobbies.
Under the inner cover of those products, high-level technologies convertible to
military uses are concealed.
~oth ci~~ilian and military technologies have been radically electronicized.
This trend will continue. This is a characteristic of modern technology. Thus,
the line separating civilian and military technologies has been growing smaller
and smaller.
"~:ccept for certain strategic arms, military technologies will be deeply con-
~ cealed among all-purpose civilian tec'r;nologies just like urban guerrillas
hidden in cities. On the other hand, military technology will swall~~w the
- advanced civilian technologies of the world and hungrily try to adapt them."
So e:cplain the experts.
In Japan, which has achieved a high level of technology in the electronics
field in particular, foreign countries see the image of a country with the
world's biggest collection of potential military technology. Considering the
current conditions and trends, this is natu:al.
These conditions also give us a clue to understand the true intention of the
United States when it requests a"Japan-U.S. military te~hnology exchange."
To r[ake Our Arms by Ourselves
"...For instance, when we are manufacturing a fighter under license from the
l~nited States, could Mitsubishi do it by itself if the license was suddenly
cancelled? If we are asked such a question, we must not be in a situation
caliere we have to answer 'no.' Even manufacturing under license, we should be
pr.epared to manufacture by our hands ~aith our own technology any time we are
asked. Such ati attitude is necessary. This is our philosophy." Although
htitGUbishi Iieavy Industries has been manufacturing aircraft from the F-104
t}iroiigli the r-15T under license, it has always kept the strong will and inten-
tion to move toward "autonomous development of technology" at the bottom current
of licensed production, according to Mr Ikeda.
13
FOR OFF[CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED F~R RELEASE: 2007/02109: CIA-RDP82-00850R000500070072-0
FOR OFF[CIAI. [i~E ON~.Y
"When we were engaged in manufacturing the F-104, we considerably advanc:ed our
= knowledge. When we suggested producing the F-104 domestically, the Defense
Agency laughed at us and did not trust us, saying that such a thing could r~ard-
ly be reliable. When we were manufacturing the F-4--the next aircraft--ur~der
license, we again suggested that we could make that sort of aircraft by ourselves.
But the Defense Agency did not trust us then, either. At last, when the Defettse
Adency wanted the T-2 (a supersonic training aircraft), it told us: 'If you
wrint to do that much, we will let you try.' Finally we were able to manufacture
aircraft by ourselves with our own *echnology."
The:re was a fear that it would become a seller's market if Mitsubishi did not
pc;ssess the capability to develop technology by itself. More than the economic
reasons, however, what contributed most to this attitude was the Mitsubishi
engineers' inheritance of Mitsubishi's prewar philosophy "to make our arms by
ourselves."
It has been pointed out that nowadays the urge toward "autonomous development
of arms" has been felt in the entire arms industry. The JapanesP d~fense
industry is beginning to stand and walk by itself.
I must describe here the postwar history and characteristics of domestic arms.
With the wartime defeat, the old military forces were dissolved. Armament
factories �~aere completely abolished. This is what many Japanese believe.
- The facts, however, are different. The military industry did not die. Con-
ce~led from the occupation forces, large numbers of military engineers were
carefully retained within Mitsubishi Heavy Industries, Mitsubishi Electric
Company, and Toshib~. Using those military enginEers as a seed, the postwar
Japanese military industry, which changed its name to the defense industry,
was reborn like a phoenix.
There may be a small number of people who know that the philosophical trend
toward "autonomous development of arms" has, up to the present, been establish--
ed mostly by those engineers.
For example, the aircraft engineers of Mitsubishi Heavy Industries spent the
postwar period doing thp following.
They were at the dispersed factories in Matsiunoto, Nagano Prefecture, when the
war ended. At the instruction of the company, they secretly dispersed them-
~ selves and moved to five factories throughout the country. The first gro.up
left for the Mizushima (in akayama Prefecture) and Kyoto factories. The second
group went to the Kobe and Nagasaki dockyards.
Because experimental facilities such as wind tunnels and water tanks remained
in both the Kobe and Nagasaki dockyards, engineers in the field of aerodynamics
were sent there. The rest of the engineers went to the Kawasaki factory.
After a time, they began moving again. This time engineers were gathered at
the Kyoto and Mizushima factories. While polishing their skills there, they
waited for an opportunity to practice their old skills.
1~+
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500070072-0
FOR OFFICIAL USE ONLY
"`I'he company kept about 140 to 150 engineers in all areas ranging from tanks
to aircraf.t. Of them, about 70 engineers moved to the Nagoy~. factory (an air-
cra`c factory) when aircraft production was resumed in 1952," testifie~ Mr Ikeda,
who was one of them.
Soon production of aircraft was permittPd. Then, production started under
license from U.S. companies. Taking �3dvantage of their past experiences which
enabled them to compare the L'.S. licensed aircraft with Japanese aircraft of
the past, they coped with design diagrams, specifications, and other complicated,
high-level instructions sent from the United States.
"Although the knowhow associated c~rith the key technologies for licensed produc-
tion was not taught at all, they were able to understand the contents to a cer-
tain extent once they got started. Later, the knowhow they gained in tc:is pro-
' cess was utilized. I~ was totally different from starting from nothing."
Soon they turned their attention to their own technology and developed the GCM
- (a gas turbine) and the MU-2, a ground starter for the F-104; the T-2, a high-
performance training airplane solely developed and manufactured in Japan, and
the ASM-1 (an air-to-ship missile) were also developed and produced domestically.
Now, they have taken up the challenge of developing domestically the Nike-
Phoenix, a surface-to-air missile.
They say that not only technologic~l accomplishments but also inheritance of the
"make our own arms by ourselves" philosophy resulted in the present condition
of technology in the defense industry.
The ASM-1, a Domesticslly Developed Missile
I, Associated with the domestically developed ASM-1 missile is the story that
"engineers of the U.S. mil~tary forces were astounded at the high accuracy with
which it hit the target." Taking the case of the ASM-1 as an example, let us
examine the characteristics of our domestic arms.
The ASM-1 was perfected by Mitsubishi Heavy Industries as the prime contractor.
Its haming head was developed by Mitsubishi Electric Company and its rocket
- section w~.s developed by Nissan Motor Company (Space and Aviation Division).
One charac;eristic of .Tapanese military technology is, first of all, that the
ASri-1 was completed with very low development costs compared to the same type
of l1. S. missile.
Compared with the Harpoon, its U.S. counterpart, the development period was
one-hal.f, the de~~elopment costs were one-tenth, and the production costs per
missile are said to be 60 percent.
I~ow could this be possible?
Actually, the domestically developed ASM-1 missile was born after a certain
incident that was the beginning of the so-called Japan-ti.S. missile war.
15
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2407/42/09: CIA-RDP82-40850R000500470072-0
FOR OFFICIAL USE ONLY
Prior to the development of the ASM-l, Mitsubishi Heavy Industries, which had
started to develop missiles on its uwn, succeeded in developing a missile
named AAM-2. Its rival was the U.S. Falcon. Since the Fa1c~n could be carried
by the F-4 Phantom, Mitsubishi also designed the AAM-2 so that it could be
carried by the F-4 Phantom.
The performance of the AAM-2 was superior to that of the Falcon. This became
clear in the tests conducted by the Defense Agency. The accuracy was twice
that of the Falcon (in other words, the AMS-2 could hit within a circle one
hal~ that which Falcon could hit).
The conclusion was, however, that the AAM-2 had to be abandoned without being
adopted.
Those who know the situation reveal that "the rival Falcon was suddenly sold
at a bargain price."
Judging that the Falcon could no longer be employed in the United States, the
makers of the Falcon decided to start a bargain sale in order to dispose of
their inventory of Falcons.
The AAM-2 could not compete in cost with the bargain price of the Falcon, and
Mitsubishi Heavy Industries had to swallow its tears.
When Mitsubishi started planning the next missile, the ASM-1, it decided from
the early stage on the basis of its bitter experience with AAM-2 that "there
must be a significant difference in quality and in price in order to compete
with American-made missiles." From this, we can understand tYiat the development
of Japanese military technology has taken the same course as automobiles and
color TV sets.
In order to develop a missile with low production costs, Mitsubishi engineers
chose the Harpoon (an air-to-ship missile) of the United States as a rival and
rushed to develop a missile under the slogan "a domestic missile for half the
price of the Harpoon."
In order to cut production costs thoroughly, Mitsubishi established a strict
cc,st management structure which involved related enterprises and subcontractors.
From the production of trial models, Mitsubishi engineers went to every vendor
and parts maker and gave direct i_nstructions on how to produce the parts.
The result was what I have already described. The ASM-1 was adopted as a
domestic missile with extraordinary competitive power.
Based on their past experiences, Mitsubishi engineers have star ted to go into
tl~e area of surface-to-air missiles. They are going to develop the Nike-
Phoenix.
The example of the ASM-1 can apply more or less to the development method of
every domestic weapon.
16
FOR OFF[CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500070072-0
FOR OFFICIAL USE ONLY
This method puts an enormous number of subcontractors, which form the footing
- of the defense ir~dustry, under a certain strict discipline and control. It
brings them into a checking structure that extends to technology, product3~on
sites, machines and tools, and parts supplies.
Thus, quality control and cost control are thoroughly carried out.
Having had a great deal of trouble with sabotage at the subcontractors' level,
the American military industry is losing its competitive power, and for that
reason much of the Japanese defense industry is becoming competitive in the
Japanese arms market.
On the other hand, in calculating personnel expenses for design engineers and
other engineers engaged in research and development of military technology, a
significant difference exists between Japan and the United States. This is
one secret of a low-cost Japanese weapon. This fact is not known widely.
In brief, highly qualified engineers in the Japanese defense industry are
employed at a cost astonishingly lower than their American counterparts.
A time change per hour is calculated by analyzing the standard work of every
engineer and researcher in the United States. In addition to time u~ed f or
research and development, even idle time is charged to a client as a chargable
cost if the cause is related. This is the American method of calculating
personnel expenses.
The Japanese method is customarily called "gross cost." Engineers, mechanics,
deslgners, and researchers are not clearly distinguished from one another and
they are all paid by the salary system. Often the,~ work extra hours for which
ttiey are not paid overtime.
Comparing the two structures, a difference in cost and price competitiveness
is naturally created at the stage of the final products, which are modern
weapons.
As long as Japanese weapons possess a strong price competitiveness deriving from
the Japanese method, the Defense Agency, a user, has to move in the direction
of buying Japanese arms.
High technology, especially in the elec.tronics field, is joined to price com-
petitiveness and the spiritual backbone of making our own arms by our own
hands. Therefore, autonomous development of arms seems destined to go forward
as a chaser would with a tai�lwind.
Dr Andrew Pierr~ has predic~ed that Japan-U.S. friction would increase in the
Japanese arms market in the future. He has also warned that "Once Japan desires,
it can become a highly competitive arms exporter within a short time." We feel
as though we must pay respect to his sharp eyes.
17
FOR OFF'IC[a0.L USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500074472-0
FOR OFFICIAL US~ ONLY
'['tie i'url~ose of. .lapan-U.S. Military Technological Cooperation
The Japanese defense industry has begun to walk purposefully toward autonomous
development of military technology. I have written a rather long explanation
_ of the situation background because I had to write about the Japan-U.S. mili-
tary technological cooperation, an issue that has been changing its form and
shape and reappearing at every opportunity, like a persistent ghost, since
early last fall. The United States has reportedly asked Japan to provide mili-
tary technology. Concerning the intentions of the United States and the con-
tents of the request, all Japanese defense industry executives have said that
"We can't understan~i its re~] intentions," and "We can't think of any Japanese
technology worth providing to the United States."
What the U.S. Department of Defense expects Japan to provide is said to be
high-speed operation elemental devices, lasers, electronics technology for use
in radars and surface-to-air missiles, optical fibers, robots, and CCD's (IR-
CCD's, if successfully developed). Various speculations have spread through
the defense industry.
As I have already written, it is undeniable that U.S. interest and concern
~ toward Japan's highly advanced civilian technology in the electronics field has
- been increasing.
~ On the other hand, there is another story here. "Originally, Japan, not the
United States, asked the United States to provide military technological
cooperation. Now, it is Japan that wants to break the three principles of arms
~xports. The United States is, on the other hand, in a position to take a
precaution. If Japan starts exporting military technology to the United States,
it may start exporting it to other countries too."
In fact, it has been reported that former Defense Agency Director General Omura
brought up the issue when he visited the United States in June 1981.
The truth is elusive.
Nevertheless, the important fact is that the Japanese defense industry's mili-
tary technology has become a great potential power. At the same time, even if
this is true, it is limited to the extent of individual subsystems and compon-
ents. It does not extend to broad military systems like those possessed by
the United States or an entire design philosophy.
Ikeda, the managing director of Mitsubishi Heavy Industries, says: "If
Japanese and U.S. military technologies are compared, the U.S. technologies
are definitely better and greater. There may be some areas where Japanese
technology is competitive or ahead by one step. They are, however, only
limited, local areas of military technologies."
Therefore, he says: "As far as Mitsubishi Heavy Industries is concerned at
present, we have no technology to export to the United States, and the United
States does not expect such localized technologies, either."
18
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
idhat does the United States think of and want from military technologica~.;'
: .l
coopPration?
"Some technologies that Japan has spent an eno~ous amount of money to develop
f~:r civilian uses are very localized but slightly ahead. The United Statee.
seetas to be requesting the ~reedom to buy and use such technologies. This ig
- only my personal guess" (rIr Ikeda). "It is hard to think that Japan possesses
- technologies ttiat the United States wants to absorb into its military system in
- large quantities. If there are any individual technologies which are cheap
and applicable to the U.S. military system, the United States wants to buy and
use them on a commercial basis. I thinlc that is what the U.S. request means"
(Mr Fukuizumi). "Japan lacks critical technology (the Cechnology that forms
the heart of a system). The recent theory of establishing a technology-based
state is aimed at remedying this lacuna. Under the current situation where
the level of Japanese military technology has risen, Japan possesses the capa-
- bility of easily becoming a large military power if we decide to integrate
available technologies and can add critical technology to them. However, as
long as Japan lacks a huge military system and its soft*.~~are, U.S. interest
naturally turns to obtaining low-cost, good-quality components" (~'uji Masuda,
. lecturer at Hosei University).
After all, the U.S. request in a form of asking for military cooperation seems
to hav~ been an aberrant intention.
As I have already written, the primary U.S. interest is in civilian technologies
r_hat are transferable ~o military uses and some components.
, "The subcontractors which support the military-industrial complex of the United
States have been exhausted and their capability has fallen down in respect to
performance, on-time delivery, and quality. Frankly, we want Japan to supple-
ment that area." As an executive of an American company says, the second in-
tention seems to be procurement of individual hardware parts from Japan or
_ contract production of them in Japan.
Under the current law, even procurement of parts is prohibited by the three
principles of arms exports as long as they are used by the military.
Here, however, I must emphasize the following assumption, which can be con-
sidered to be the third intention of the United States.
'I'liere is an implication that the United States intends to involve Japanese
researchers and engineers speciali~ing in civilian and military technologies
in .lapan-iJ.S. joint research on military technology.
~s I have already mentioned, there is a significant difference in the personnel
expenses paid to excellent researchers and engineers in Japan and in the United
States.
InStead of employing one American researcher, it may be possible to obtain better
Cruits in terms of cost efficiency by using several brains in Japan.
19
FOR OFF[CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
FOR OFFICIAL ~.lSE ONLY
A varied forms of subcontracting brains may come to pass.
Finally, it has been reported that voices asking Japan to share the requixed
development cost of military technology have been rising among U.S. military
contractors.
All the things that I have menttoned tell us nothing except that th~ Japanese
_ defense industry is moving into a new phase. While general electrical machinery
' manufacturers have becoine well known for delivering various home ~ppliances,
office automation equipment, and new hobby and entertainment-related products
to consumers, they have also ~ccupied a large f oo~hold in the military industry
by using a wide range of military technology as an intermediary. This phenomenon
has been accepted as quite ordinary in our industrial w~rld. Mitsubishi
Electric Company has been much talked about in the consumer goods market for
its hit products such as quilt dryers and clean hea:ers. The company also is
proud of being the Defense Agency's number one supplier in the area of el_ectron-
ics, which excludes Mitsubishi Heavy Industries or Ishikawajima-Harima Heavy
Industries.
Hitachi Limited, which announced its participation in a bidding war to get a
contract for the Badge X(the next atitomated air defense warning and control
system), established a Defense Technology Promotion Headquarters within the
company 2 years ago. By permanently assigning 50 researchers and engineers,
it has been busy researching and developing military technology.
Fujitsu, number one in the computer industry, also started the Fujitsu Systems
Integration Laboratory at the beginning of last year. It is hu~tling "to
double its contracts in the defense market within 2 or 3 years." One hundred
thirty researchers and engin~eers are engaged in developing military technology
at the Fujitsu laboratory.
Nippon Electric Company, known for its slogan of computers and communication
and as Japan's largest semiconductor maker, is said to be supplying the Defense
Agency with almost 290 parts and products under contract annually. In addi-
tion, it has over 50 subcontracts to supply to prime contractors engaged in
arms manufacture.
- "ror both civilian and military uses, technology will become more complex,
higher level, and more advanced in the future. We don't have to neglect the
high technology we have achieved in civilian applications. We want to atilize
this technology in military applications. And then we want to feed back our
accomplishments in military applications into civilian applications," opines an
executive of a general electrical machinery maker with an easy look.
Now, "a market of 1 trillaon yen" is beginning Lo reveal its entire features
before the defense industry.
It is also certain, however, that the semiconductor makers can see a huge swamp
called "company risk" ahead of them.
20
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500070072-0
FOR OFFICiAL USE ONLY
In the VLSI battle of the 64 kilobit or more, the capital investment for one
plant is said to reach 20-30 billion yen. They have to r~cover these huge
investments within 2 to 3 years. They are stuck in a surprisingly~risky busi-
ness.
_ We cannot completely deny thar one of the :notivations urging them toward
autonomous development of military technology is company risk. It is not some-
thing which can be talked about in a bright world free from worry.
COPYRIGHT: Bungei Shunju Ltd 1982
9846
CSO: 4105/114
,
21
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500470072-4
. FOR OFF[CIAL USE ONLY
ECONOMIC
AG.RICULTiJRE WHITE PAFER FOR 1981 REVIEWED
Tokyo NIHON KOGYO SHIMBUN in Japanese 12, 15, 19, 22, 26 May 82
[12 May 82 p 3]
[Text] Development of National Economy and Agriculture
Food Supply and Agriculture
The national food demand increased rapidly during a period of high-level growth;
rice demand decreased while fruits and animal products increased. Likewise,
the form of food consumption moved in the direction of an increased tendency
to rely on f ood consumption service, i.e. the weight of restaurant food and
high value-added food, such as processed food, increased. As a result, the
ratio starch occupies in the daily per capita supply of caloric value declined
from 63 percent to 52 percent during the period from 1965 to 1973, and the ratio
of protein and fats increased. On the average, the diet content has improved
in that balanced nutrition has been acquired.
In answer to this, agricultural production continued a selective expansion,
centered in products for which demand has increased rapidly. Faced with the
- previously unknown problem of having a structural excess supply of rice in 1968
and late~, with regard to the inevitability of having regulated basic production
since 1971, domestic production of wheat, soy beans and the like gradually
declined and the supply of these products relied mainly on imports. As a re-
sult, the agricultural food products overall self-sufficiency ration dropped
to a little more than 30 percent.
As for such a decline in the overall food self-sufficiency ratio, there is the
- problem of insuring Japan's food security. While the Ministry of Agriculture
- and Forestry worked to maintain and strengthen the overall domestic food self-
sufficiency capability continuously in FY-81, it also decided to insure the
stability of imported agricultural products and promote countermeasures for
reserves of agricultural praducts.
In the process of changes in national food demand, the food supply structure
has become a double structure in which products with an extremely low self-
sufficiency ratio coexist with products which have a high ratio. Agriculture
- must create a stable supply in answer to the food demands of the future also,
22
FOR OFFICIAL USE ONLY ~
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0
FOR OF~ICIAL USE 1
but the white paper offered a working plan for improvement in product~vity by
means of: 1) development and dissemination of agricultural technology; 2)
efficient agricultural investment; and 3) reform of the agricultural structure.
~ ~,o r ~`]~`~~I~ ~1~
.~o ~~~~~?~]L-~
~ ~ C4-0^-55~~E.~~ )
~8 ~ ~a
~ rZ ~
, ~6 ~
U ' .
_ Zg.~ 81~ ~61~l~'1 ~~~~~1 ~7?rZ ~
~:~n~y} .
.~~t}~y}'t*t~h.~
- ' ' ~�~~I~W~~~~~~rJ-~~IV~~~/�
Key: '
1. Comparison of Rate of Increase in Material Labor Productivity in Agriculture
' in Several Countries (annual rates for the years 1965-1980)
2. Agriculture
3. Manufacturing
4. Japan
5. West Germany
6. United States
7. France
8. ~ngland
9. N.B. Agricultural production index and manufacturing production index
divided by the index of employed population for each.
The improvement in agriculture's physical labor productivity is an indispensable
factor for maintainin~ and strengthening the overall food self-sufficiency
; capability;' the rate of increase was high, 5.6 percent per year, during the
pcriod from 1965 to 1975 and can rank with that of the United States and
l~,uropean countries. However, some distinguishing characteristics can be seen
in the tendency of productivity during this period: 1) in contrast to the fact
thzt in the United States and European countries,the increase in agricultural
productivity exceeded that of manufacturing, it was ~ust the opposite in Japan;
and 2) the tendency of Japan's agricultural productivity to depend greatly on
23
; FOR OFFICIAL USE ONI.Y
,
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500070072-0
FOR OFFICIAL USE ONLY
the growth of the capital-intensive agricultural sector, such as small-to-
medium sized animals and institutional horticulture, and progress in labor-
saving technology in the land use style agriculture sector is impeded by a petty
l~nd retention structure and not enough efficiency is demonstrated.
Because of this, it has gradually become difficult to achieve an income diff er-
- ential between agriculture and manufacturing with an increase in agricultural
productivity, and the tendency to rely on an increase in the price of agricul-
tural products to insure an agricultural profit has intensified. The production
- cost of agricultural products had a high increase ratio of 9 percent annually
between 1965 and 1975, but because relaxation in demand during the period from
1975 to 1980 worked to inhibit the price formation, it was rather small, an
annual rate of 4.1 percent, compared to the previous period.
In an international comparison of agricultural product prices, there are such
problems as the influence of export subsidy measures on international prices; for
, example, when Japan's agricultural product costs are compared to the world's
average import costs, Japan is high in such items as the land use style agri-
cultural sector's rice, wheat and meat, but is at the same level or lower tnan
international prices in such things as chickens and eggs.
More important, since 1977, in contrast to the fact that the tempo of price
- increases for domestic agricultural products has slowed down, ir~ternational
prices have increased, and there is a trend toward a reduction in the range
of. disparity with international prices in expensive items.
[ 15 r:ay 82 p 3]
[Text] Trends in Agricultural Product Demand
Diet and Health
As pointed out in the first article, the content of the national diet has
changed greatly, and compared to the diet of the United States an,d Europe, the
Japanese diet has several distinctive features; an individual diet pattern which
mtist be called "a Japanese style diet" continues:
According to the white paper, those distinctive features are as follows:
1) The caloric supply difference. In contrast to the fact that the national
annual per capita caloric supply in the United States and Europe is more than
3,000 kilocalories, in Japan it has remained almost constant at approximately
2,500 kilocalories. 2) Compared to the United States and Europe, the ratio
starch occupies in the caloric supply is high, about half. 3) The ratio animal
protein occupies in protein supply is low and even in animal protein, the ratio
of fish and seafood i_s 45 percent, remarkably high compared to the rate of less
than 10 percent in the United States and Europe.
24
_ FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500070072-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500070072-0
FOR OFFICIAL ' .
~ 1) ~ ~'~t ~~l
c~i~~?:.~i~~~~~ �
( )(1J11~~t ~1~It~E~6f.Kg) ~(i1t11F~?~i~: 7~')`~
~ � �y f 4 )
~ ~ ~'S~ J P ~ 5 )
< ~ � ' ~PX ~)7] ( 6 )
B . ~
- 0 5 10 �
. (9) . , ~ ~
- ~i
m . , 5 10
~ ~i�a ~ s:~:~:'