RESTRICTED

117269 MDHIAN 0598

THE LDP HAVE FAILED TO PUSH THROUGH THE IDEA THAT SELF DEFENCE FORCES (EVEN UNARMED) CAN BE DEPLOYED OVERSEAS. THIS IS A SERIOUS SETBACK FOR THOSE SEEKING A HIGHER PROFILE JAPANESE ROLE IN THE WORLD. POLITICS HERE ARE CURRENTLY IN LIMBO WHILE THE ENTHRONEMENT OF THE EMPEROR AND THE 100TH ANNIVERSARY OF THE DIET ARE CELEBRATED. BUT THE UNDERLYING POSITION IS MARKED BY:-

WEAK POLITICAL LEADERSHIP. KAIFU'S POSITION HAS BEEN SERIOUSLY DAMAGED BY HIS HANDLING OF THE GULF CRISIS AND

OF THE PEACE COOPERATION BILLS, HE SURVIVES LARGELY BECAUSE THERE IS NO OBVIOUS CANDIDATE TO REPLACE HIM

ILL-COORDINATED INITIATIVES BY SENIOR LDP POLITICIANS (KANEMARU/NORTH KOREA, MITSUZUKA/SOVIET UNION, NAKASONE/IRAQ) WHICH HAVE CUT ACROSS OFFICIAL GOVERNMENT POLICY

- A LONG AGENDA OF CONTROVERSIAL ISSUES WAITING TO BE RESOLVED, SUCH AS ELECTORAL REFORM, LAND TAX REFORM, AND POSSIBLE CONCESSIONS ON RICE IMPORTS IN THE URUGUAY ROUND

SERIOUS CONCERN OVER THE POSSIBLE CONSEQUENCES FOR US/JAPAN

RELATIONS IF JAPAN'S CONTRIBUTION TO THE GULF CRISIS REMAINS PRIMARILY FINANCIAL, ESPECIALLY IF WAR BREAKS OUT AND AMERICAN LIVES ARE LOST QUOTE FOR JAPANESE OIL UNQUOTE.

5. AGAINST THIS SHIFTING BACKGROUND, ONE CONSTANT IS THE JAPANESE DESIRE TO GET BACK TO BUSINESS AS USUAL WITH CHINA. THE EXPECTED WARMING FOLLOWING THE HOUSTON SUMMIT FAILED TO MATERIALISE, LARGELY BECAUSE OF UNFORESEEN SQUABBLES. BUT WITH

THE THIRDYEN LOAN BACK ON TRACK, THE PROSPECT OF SDF OVERSEAS DEPLOYMENT REMOVED AND THE SENKAKU ISLANDS DISPUTE

PUT (BY BOTH SIDES) BACK ON THE BACK BURNER, THEY ARE LOOKING TO SEE A FURTHER IMPROVEMENT IN RLATIONS. NAKAYAMA IS ALMOST CERTAIN TO VISIT CHINA IN THE NEW YEAR.

6.

THE MFA IS WELL AWARE OF JAPAN'S ROLE IN MAINTAINING

CONFIDENCE IN HONG KONG AND IS GENERALLY SUPPORTATIVE.

BUT IT IS ALSO ALWAYS MOST RELUCTANT TO UPAET RELATIONS WITH

CHINA AND CONSCIOUS OF THE STRONG INTEREST IN CHINA OF JAPANESE PARLIAMENTARY AND PUBLIC OPINION. THUS I SEE

ONE IMPORTANT ELEMENT OF YOUR VISIT AS BEING CONSCIOUSNESS

RAISING SO THAT THE JAPANESE GENERALLY BECOME AWARE THAT JAPAN NEEDS TO ACT TO PROTECT ITS SIZEABLE INTERESTS IN HONG KONG, NOT JUST OBSERVE AND SPECULATE FROM THE SIDE LINES. THIS ASPECT

PAGE 2 RESTRICTED

Page 30Page 31

Share This Page