Yet another large-scale land sale project has recently emerged in which China has expressed a strong desire to acquire a prime piece of urban property. This comes on the heels of a controversy involving a freeze on the projected sale of an attractive plot of land owned by Niigata City. The new property in question is located in Nagoya City, but the prospective seller this time is not the municipality of the central Japanese industrial port city, but the Ministry of Finance, i.e., the Japanese government.

　　　The government property offered for sale in Nagoya comprises two plots in the heart of the central metropolis inhabited by some 2,260,000 people – a 31,000 square meter (approximately 334,000 square feet) piece of land close to Nagoya Castle with a broad view of the city from its southern sector; and a 2,800 square meter (some 30,000 square feet) detached estate. Totaling 33,800 square meters (364,000 square feet), the property is among the largest first-rate plots of urban land left available anywhere across the prefecture. Until fairly recently, the ‘Meijo Jutaku’ housing complex for government employees and their families and the Meijo Kaikan conference hall with lodging facilities stood here. The latter was an asset operated by the National Police Mutual Aid Association,

　　　Prospective buyers of the property were to submit applications between April 15 and July 14 this year. Two applicants turned up – Aichi Gakuin, an incorporated educational institution which runs Aichi Gakuin Graduate School, among others, and the Chinese government which wants to obtain the property to build its Consul General in Nagoya. The latter initially informed the Financial Bureau of the Ministry of Finance, which oversees matters pertaining to nationally-owned property, that it was interested in acquiring one-third (some 10,000 square meters, or 108,000 square feet) of the southern portion of the larger property.

　　　The deal makes one wonder why the Japanese government must dispose of this piece of land now in the first place. Explains a national property coordinator with the Division of Policy Coordination for National Property Management (Kanto Financial Bureau, Ministry of Finance):

　　　“We have a policy of regularly selling off old assets and replacing them with new ones, based on our housing relocation program involving accommodations for government employees. All the occupants of the Meijo Jutaku housing complex had left the premises by April 2009, and have been housed at their new ‘Johoku Jutaku’ housing facility.”

　　　Queried if the government is disposing of the Nagoya property in order to secure funds to continue to build new housing for government employees, the coordinator’s answer was affirmative.

　　　Generally speaking, prospective buyers of nationally-owned property are deemed qualified on two conditions – (1) the party has “public needs” for such property, and (2) the party’s application is made “properly.” Social welfare corporations, as well as schools and universities, are automatically qualified, according to the coordinator. In keeping with the terms of the Vienna Convention on Consular Relations, which calls on the receiving state to implement reciprocity and do its best to accommodate the needs of the counterpart, the Chinese Consul General also qualifies.

　　　But China has yet to honor reciprocity with Japan when it comes to ownership of diplomatic establishments, as it is dead set against selling property to foreigners and foreign governments. As a result, Japan has been compelled to pay rent for all of its seven diplomatic establishments on the Chinese mainland, including its embassy in Beijing. Meanwhile, China owns all of its diplomatic establishments in Japan, land and all – except in Niigata and Nagoya, where its consuls general currently occupy rental property while negotiations for land purchases are under way.

Is Sale of Government-Owned Property to Foreign Government Rational?

　　　The Chinese Embassy, located in Tokyo’s serene Moto-Azabu district, stands on a piece of property it owns, measuring approximately 13,000 square meters (roughly 140,000 square feet). China also maintains commerce and education offices with housing quarters built on a 2,400 square meter (approximately 25,800 square feet) estate in addition to smaller quarters in four other locations in Tokyo — all built on land the Chinese government has purchased. The same is true of its consuls general in Sapporo, Osaka, Fukuoka, and Nagasaki. The Chinese consul general in Osaka is relatively modest, encompassing three fairly small pieces of property. However, the other Chinese consuls general all have ample space ranging from 3,300 to 5,000 square meters (35,600 to 54,000 square feet). Should the land deals in Niigata and Nagoya materialize, China will acquire two additional large pieces of select property, each measuring about 15,000 square meters (approximately 160,000 square feet) – far more spacious than the property purchased for any of its consuls general in Japan.

　　　Asked if the Japanese government should consider selling the land in Nagoya to China despite the undeniable absence of reciprocity, the national property coordinator had this to say: “At this stage, Chinese diplomats in Niigata and Nagoya are conducting their business in rented buildings. Their desire to acquire property of their own in this country would seem reasonable. “

　　　Hearing such remarks, one is sadly reminded of an alarming lack of commitment to Japan’s national interests on the part of bureaucrats who themselves live in first-rate government housing while paying nominal rents. As they continue to build new housing for government employees, they are forced to do whatever is necessary to recoup these expenditures, taking a myopic view of the cash flow under their noses.

　　　Comments Mayor Takashi Kawamura of Nagoya, who asserts he has recently appealed to the Democratic Party of Japan (DPJ) to implement a freeze on the projected sale: “The state has the ultimate power to dispose of any nationally-owned property as it sees fit. Although the local government theoretically has the right to determine how a specific piece of property within its domain should be utilized, I don’t believe we can object to the last if the government insists on disposing of the land which it owns after all. Following the Senkaku territorial violation incident, I don’t think there is one single soul in the whole of Aichi Prefecture, or Nagoya City, willing to see the state relinquish this first-rate plot of land to China. I have urged the DPJ government to exercise maximum caution, and asked that a freeze be implemented on the sale.”

　　　Comments Shinichiro Furumoto, former Parliamentary Secretary of the Finance Ministry and a lower house member of the Diet in charge of the sale project: “I have had frequent talks with mayor Kawamura on this matter, and have to come to understand that he is not particularly pleased with the sale. Following a series of meetings with him, I laid down specific conditions to the Chinese government – that they must explain their need to the Urban Planning Section of Nagoya City as well as the city assembly and those concerned, including the head of the ward in which the property is located, as an important step towards winning their consent. The Chinese side has since informed us that all these conditions were satisfied.

　　　However, a section of a local city government, such as the Urban Planning Section of Nagoya, does not have jurisdiction over the nationally-owned property in question. Representative Furumoto agrees, noting: “Naturally, it is not a matter for a local agency to decide. Therefore, I have thoroughly briefed the Finance Minister on the circumstances and won his consent.”

　　　So, Finance Minister Yoshihiko Noda has allegedly approved the sale. However, due to a cabinet reshuffle, Furumoto had ceased to be Parliamentary Secretary before the final decision was to be reached, and was replaced by Izumi Yoshida. In the meantime, Mayor Kawamura appealed to the DPJ to freeze the sale, as China ran the gamut of barbaric words and deeds following the Senkaku incident. Explains Izumi Yoshida:

　　　“When I took over as Parliamentary Secretary on September 21, I quickly came to realize that the government should put a freeze on the projected sale. In June – roughly three months before I took over – the Japanese government had informed China that it could offer only the northern sector of the property in addition to the detached estate. But the Chinese side didn’t immediately buy this idea, and in August came up with a counteroffer to purchase roughly half the larger property measuring 165,000 square meters (approximately 1,780,000 square feet), including its southern sector. Strangely, though, that was the last time we heard from them regarding the deal. On September 27, we had a talk on this matter among the three of us – the Finance Minister, the Deputy Finance Minister, and the Parliamentary Secretary – in which Minister Noda was fully briefed on the current situation. We then decided to postpone any decision on this matter for the time being. At present, we are effectively awaiting a decision by the Foreign Ministry.”

　　　Vice Foreign Minister Yutaka Banno, in charge of this matter at the Foreign Ministry, was unavailable for comment this week, and is expected to respond one way or another next week, according to his office.

Self-Interest of A Politician Desperately Clinging to Premiership

　　　What then will become of the Nagoya land sale to China? Asked to assess the current situation, the national property coordinator quoted earlier replied: “No freeze has actually been put on the sale. As a matter of fact, it still is being investigated. Although there is no knowing how soon a conclusion will be reached, I believe the sooner the better.”

　　　Such a statement likely can be construed as indicating that Financial Ministry bureaucrats are eager to dispose of nationally-owned property to whomever desires to purchase it – so long as they can recoup past expenditures and amass the funds to construct new housing for government employees. Meanwhile, the DPJ – a political party that advocates “leadership by politicians” – remains inexplicably indecisive, unable to scrap the deal, although a handful of its members are seriously concerned about the negative consequences of the projected sale.

　　　Jin Matsubara, a DJP lower house member who serves as secretary-general of the bipartisan League of Diet Members To Protect Japan’s Territory, is exasperated. “There are two major reasons why the government has to be extra careful when selling nationally-owned property,” Matsubara stresses. “First and foremost, while China can be viewed as an economic giant which has managed to join the ranks of advanced nations, it has yet to recognize the right to freedom of speech. Also, China never abides by routine international norms. In fact, the Japanese government should be extra careful when tackling property sale to China – a nation which boasts values that are vastly different from ours.

　　　“And the second reason is that we should seriously ponder the fundamental question as to whether or not nationally-owned assets can be sold to foreign nations in the first place. At the very least, disposing of a property when the market is down, as it currently is, should be strictly prohibited.”

　　　Notes Ms Eriko Yamatani, a Liberal Democratic member of the upper house who submitted two bills towards the end of the recently completed extraordinary session of the Diet which were aimed at protecting Japan’s water sources and forests:

　　　“Prime Minister Kan chose to close the Diet session promptly without bothering to engage in deliberations on these and other pertinent bills. I simply cannot imagine if his administration is in any way sincere about mapping out any guidelines for the sale of urban property, let alone tackling the bills to protect Japan’s water sources and forests.”

　　　On the matter of possible restrictions on foreign acquisition of Japanese property, Kan told the upper house budget committee on October 15:”I promise to study this matter without fail, and try to get a definite idea as to what the best measure should be.” And yet, he chose to close the Diet session before deliberations on this issue could even begin, and is now trying single-mindedly to woo opposition parties by abruptly teaming up with the Socialist Democratic Party, of all parties. Kan is clearly playing the numbers game just to cling on to his premiership – a pathetic case of a politician putting his personal interest before the national interest.

(Translated from “Renaissance Japan” column No. 440 in the December 16, 2010 issue of The Weekly Shincho.)