PM Noda Will "Nationalize" Senkaku Island, No Matter What China or Taiwan Says

After planning to lower the retirement age for the Japanese to 40 to compete with developing countries on wages, now he says he will nationalize the islands disputed by Japan, China, and Taiwan.

Why? He thinks that will win him the next election. Absolutely tone-deaf, harebrained move by the prime minister who seems to be rather popular in the US and UK (particularly among the financial media) for his resolute moves to combat fiscal deficit by raising taxes and cutting social welfare for the hapless citizens.

The move may give more headaches for the Chinese Communist Party who has been battling the unrest cropping up in the country, and cause the Chinese government to appease the angry public by instituting some anti-Japanese measures.

As the Nikkei article below indicates, Noda's move is to prop up support for him and his party in the next Lower House election. By appearing tough, he thinks he can get the right-wing votes, I suppose.

From Nikkei Shinbun (7/8/2012; part):

尖閣国有化、慎重論押し切った首相　弱腰批判を回避

In nationalization of Senkaku Islands, Prime Minister overcame the faction that preached prudence, to avoid criticism of being weak

政府が尖閣諸島の国有化に向けて動き始めた。尖閣購入に先に乗り出した東京都の石原慎太郎知事に触発され、野田佳彦首相が政府内の慎重論を押し切った。次期衆院選に向けて「弱腰」批判をかわし、領土保全で毅然とした姿勢を印象付ける狙いがある。中国の反発は覚悟のうえで、日中関係悪化という火種を抱える決断となった。

The national government is moving toward nationalizing Senkaku Islands. Inspired by Governor of Tokyo Shintaro Ishihara, who has already to purchase the islands, Prime Minister Yoshihiko Noda overcame the faction inside his government who are more cautious. The purpose is to deflect the criticism of "being weak-kneed" and to create an image of a resolute leader protecting the national border, in preparation for the next Lower House election. The prime minister [and his supporters, if any?] is prepared for the opposition from China. This decision may worsen the relationship between Japan and China.

...

　玄葉光一郎外相は７日、外務省内で記者団に、中国と台湾が事実関係の説明を求めてきたことを明らかにした。７日は日中戦争の発端となった盧溝橋事件から75周年にあたり、中国外交筋は「最悪のタイミングだ」と語る。

Minister of Foreign Affairs Koichiro Genba told the press corp at the Ministry on July 7 that China and Taiwan had contacted his ministry to explain the situation. July 7 marked the 75th anniversary of Marco Polo Bridge Incident [in 1937) that triggered the [Second] Sino-Japanese War. Chinese diplomatic sources say "It's the worst possible timing."

Shintaro Ishihara says his purchase plan with donation money is still in place. As of July 5, 2012, he has collected 1.325 billion yen (US$16.6 million) from nearly 90,000 entities.

Japan claimed these uninhabited islands as its own in 1885, having determined by several surveys that the islands did not belong to any country. During the occupation period after the World War II, the islands were administered by the United States as part of Okinawa. China and Taiwan started to claim Senkaku Islands as their territories after a survey done by the UN Economic and Social Commission for Asia and the Pacific in 1969 indicated a potential of huge oil and natural gas reserves under the sea. (From Japanese Wikipedia)

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Government to (Effectively) Take Over TEPCO in July

It looks like it will be Yukio Edano, Minister of Economy, Trade and Industry, who will run the show. He is the same one who, as Chief Cabinet Secretary, was a very popular and reassuring figure in the early days of the nuclear crisis last year with his remarks that the radiation "have no immediate effect on health".

It is not "nationalization" but "effective" one. I'm yet to find the precise definition of "effective nationalization" in Japan, but if it is the same as "effective nationalization" of AIG in the US, it has to do with the percentage of shares that the government will control - enough to run the company but not enough to combine the balance sheet.

A short article from Sankei Shinbun (5/9/2012) has some telling bits of information:

東電、７月にも国有化　政府が総合計画認定
TEPCO to be nationalized in July, as the national government approves the overall business plan

枝野幸男経済産業相は９日、東京電力の実質国有化を柱とする総合特別事業計画を認定した。対象期間は２０２１年度までの１０年間とし、３兆３６５０億円超の経費を減らす一方、家庭向け電気料金の１０％値上げと柏崎刈羽原発（新潟県）の１３年度の再稼働を明示した。政府は７月にも公的資金１兆円を資本注入し、議決権割合の過半を握ることで東電を実質国有化。社外取締役を増やして経営への監視を強める。

Yukio Edano, Minister of Economy, Trade and Industry, approved the overall special business plan on May 9. The plan centers around the effective nationalization of TEPCO. The period that the business plan covers is 10 years until the fiscal 2021. The plan calls for 3.365 trillion yen reduction of expenses, 10% raise in utility fees for the household, and restart of Kashiwazaki-Kariwa Nuclear Power Plant (in Niigata Prefecture) in the fiscal 2013. The national government will do the capital injection of 1 trillion yen using public money, and hold the majority of voting right, effectively nationalizing TEPCO. It will also increase the number of outside directors to tightly monitor the management of the company.

　燃料・火力部門、送配電部門、小売部門を社内分社化し、さらに持ち株会社制へ移行する方向性も示した。政府は東電を舞台に電力改革やエネルギー政策の見直しを具体化させていく。

The current divisions, such as Fuel and Thermal, Power Transmission System, and Retails, will be set up as separate branches within the company, with an eye on turning them into holding companies. Using TEPCO as a platform, the national government will put into effect its electric power reforms and energy policy revisions.

A power grab by a government who is even less transparent than TEPCO when it comes to disclosing the information about the nuclear accident or the radiation contamination.

Needless to say, there is no plan B if Kashiwazaki-Kariwa doesn't restart. The cut of 3 trillion yen over 10 years doesn't seem much at all, when the cost to decommission is estimated to be tens of trillions of yen.

The 107-page business plan, which says hardly anything of note, is with the 140-page supplement which says more. The compensation to the victims of the nuclear disaster is calculated by a Tokyo University professor with macro economics in mind (whatever that means), and the plan hinges on the assumption that the government/TEPCO can cut back on the compensation to people who will be returning to their homes in the areas with less than 20 millisieverts per year annual radiation (external only) exposure.

So much for the new president of TEPCO pledging to do his best to compensate the victims.

For now the business plan and its attachments are in Japanese only. TEPCO promises it will post them in English as soon as they become available, here.

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Japanese Government Planning "Nationalization" of "Affected Areas"

April Fool's joke? I don't know. The Japanese government, who has been criticized outside Japan as "behind the curve" in dealing with the Fukushima nuclear plant crisis, is well ahead of the curve when it comes to possibly nationalizing the land in the areas affected by the March 11 earthquake/tsunami and by Fukushima I Nuclear Power Plant accident.

A government seems always very quick on one particular thing: to expand its reach anywhere they can get away with. "Never waste a good crisis." And the Japanese government has not just one but three - earthquake, tsunami, and nuclear accident.

Yomiuri Shinbun (3:12AM JST 4/1/2011) reports:

政府・民主党が東日本巨大地震の被災からの復興に向け、４月中の成立を目指す特別立法の概要が３１日、明らかになった。

An outline of the special legislation for rebuilding after the March 11 earthquake (Higashi Nihon Kyodai Jishin, East Japan Great Earthquake), which the administration and the ruling party (Democratic Party of Japan) want to pass by the end of April, was revealed on March 31.

　津波被害を受けた海沿いなど生活再建が難しい土地が少なくないことや、東京電力福島第一原子力発電所事故対応の長期化も見据え、国が集団移転の費用の４分の３を負担する現行制度を見直し、負担割合を引き上げる。

Since there are quite a few places along the Pacific coast that suffered tsunami and where it may be difficult to rebuild, and with a possibility of prolonged resolution to the Tokyo Electric Power's Fukushima I Nuclear Power Plant accident, the current system of the national government paying the three-quarters of the mass relocation cost will be revised, and the ratio will be raised.

　集団移転後の空き地を国が速やかに購入、国有地化する仕組みも導入し、地域の一体的な再整備を進めることで地域再建を図る。

A system will be introduced to allow the national government to quickly purchase the empty land after the mass relocation of the residents and nationalize it, so that the recovery and rebuilding can be done in a systematic manner.

財源面では、レギュラーガソリンの全国の平均価格（１リットルあたり）が３か月連続１６０円を超えると旧暫定税率分（約２５円）を減税する制度を廃止する。減税を実施すると数千億円単位で減収になるためだ。

As to the funding source, gasoline tax cuts of 25 yen (30 cents) when the average regular gas price per liter exceeds 160 yen three months in a row will be abolished. The tax cuts could result in reduced revenue of several hundreds of billions of yen (several billion US dollars).

(Why don't they just sell US Treasuries?)

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