Distinguished Guests, Ladies and Gentlemen,

It is my great pleasure to be here with you in the Cabinet War Rooms, on this occasion of the Burma Campaign Society Symposium. These underground rooms never fail to make visitors reflect upon the war, which brought tremendous damage to people all over the world. All of you here today, including those who once fought each other, care determinedly about peace, and I, for one, would like to take this opportunity to renew my own commitment to peace, reconciliation and friendship between our peoples.

As Prime Minister Koizumi said in his speech on 15th August, Japan's post war history has involved six decades of showing its remorse about the war through its actions in the way we live in the past. Japan is determined not to allow the lessons of the war to fade, and is determined to contribute to the peace and prosperity of the world without ever resorting to war again.

Sixty years ago, few could have imagined that Japan and the UK would, as strategic partners, once again rebuild mutual trust, strengthen friendship and work together for world peace and stability as they do today.

My introduction at this session is related to the current state of British-Japanese relations. When I am asked about our bilateral relationship between the two governments, I always answer that I have two pieces of news: one good and one bad. The good news is that we do not have a single problem. The bad news is also that we do not have a single problem.

In fact, most issues discussed between the governments of Japan and the UK are either about certain regions our two nations are interested in, or global issues including development, the alleviation of poverty and international terrorism. This afternoon, I would like to talk about the global role Japan has been playing, and will continue to play, as well as how we are cooperating with the UK in this regard.

1. Japan's Economy

But let me first have a few words about the Japanese economy, as economic might has been the main source of Japan's national power for half a century. As many of you know, Japan's economy is the second largest in the world, accounting for 15% of total global GDP. This is about 3 times that of the UK and 4 times that of China.

In the context of our bilateral relationship, the economic ties between Japan and the UK are healthy and strong. Outside Europe, Japan is second only to the United States as a trade partner for the UK. For Japan, Britain is its second-largest trade partner in the EU. For Japanese companies, Britain is the largest investment destination in Europe. More than 1,000 Japanese companies, including 250 manufacturers, operate in the UK, having created around 90,000 jobs.

Domestically, the Japanese economy seems to be in much better shape than it has been for some years. After the so-called "lost decade" of the 1990s, at long last the Japanese economy is making a comeback.

This recovery is clearly something that should be welcomed for its own sake, as the Japanese economy can add considerable impetus to the growth of the global economy. However, a more important aspect of this recovery is that the Japanese people are regaining confidence in themselves. This is creating an outward-looking mindset which is enabling us to pursue a more active foreign policy in the political arena, to which I shall now turn.

2. Japan's Foreign Policy in the Global Context

Increasingly over the last few years, Japan, as a responsible player in the international community, has taken on an active and constructive role in the maintenance of international peace and security. For example, in Iraq, Japan's policy is to support the reconstruction of the country, both by means of ODA totalling up to $5 billion and by the humanitarian and reconstruction activities of the Self Defence Forces.

Japan's Self Defence Forces are currently deployed in Samawah in southern Iraq, where the UK plays the leading role in providing security.

We are also becoming very engaged in the Middle East Peace Process at this very critical phase of Israeli disengagement from the Gaza strip. Japan will continue to be proactive in advancing the process and in supporting the peace efforts of the parties concerned. This includes the steady implementation of $100 million of assistance to the Palestinians, which Japan has promised. Unimaginable sixty years ago, that Japan would work together with Australian and British troops.

Then comes UN reform, probably our top foreign policy agenda item for the year. No other international organization can match the legitimacy or universality of the UN, but the UN is badly in need of reform and must change to reflect the realities of the 21st century, not those of 1945. In order to face up to the challenges of a rapidly-changing world, reform is indispensable. In particular, the Security Council should be given more legitimacy and effectiveness. That is why we believe Member States that are both willing and able to assume responsibility for the maintenance of international peace and security should play an integral part in the decision-making of the Security Council.

Japan has already expressed its strong support for UN reform and its firm will and readiness to play an even more active and constructive role on the international stage as a permanent member of the Security Council. We very much appreciate that the UK understands and supports our position at the highest level. We believe there is real momentum for genuine reform. We are working closely with other like-minded countries to open the way for the meaningful, long-overdue reform of the Security Council.

3. Japan and East Asia

Let me now turn to East Asia. This region is now witnessing a geopolitical tectonic shift. China is emerging as a powerful industrial state for the fist time in history. Russia is struggling and searching for its future direction. North Korea is engaging in a dangerous bout of brinkmanship through its nuclear programme. Japan is, as I pointed out, regaining confidence. History tells us that the balance of power becomes unstable in such a transitional period.

What is, then, Japan's position in this volatile region?

First of all, I would like to make it clear that Japan does welcome the economic rise of China, which we see as an opportunity. Last year, China became, for the first time, Japan's largest trading partner. We sincerely hope that the economic ties both countries have built over the years will deepen mutual understanding and trust between our peoples.

Our relationship with the Republic of Korea is also very important. For example, it is essential for us both to stand firm to resolve various issues involving North Korea, and we are committed to continuing what we call the Shuttle Summit Meetings. It is vital for us to redouble our efforts to strengthen the future-oriented relationship between Japan and South Korea.

I would be naïve, however, if I did not see anything to worry about in Japan's relations with China and the Republic of Korea. Some of you may have been shocked to see the acts of violence that accompanied the demonstrations in China earlier this year. Various factors are said to be heightening the tension, including the domestic politics of each country. For their part, Beijing and Seoul attribute the cause of the present situation to Prime Minister Koizumi's visits to the Yasukuni shrine or Japan's history textbooks.

However, I would hesitate to accept these explanations at face value. There may be something behind Beijing's motives for stepping up their criticism recently. To be frank, I am not so sure whether this really is an issue about the past or Japan's apology about the past. A plausible alternative explanation is that Beijing is using the history problem to deflect public discontent vis-à-vis the Communist Party's authoritarian regime. Another, more important driving force of China's reaction is, in my view, a shift of geopolitical tectonic plates and a new security balance emerging in East Asia. During the course of the 1980s and the 1990s, Japan was economically powerful but politically reticent and introverted. China, on the other hand, was politically assertive but economically still weak. Now this situation is changing rapidly, and East Asia has two countries both wanting to take on a leadership role, both having strong political will and considerable economic power. I think that China is acutely aware of this shift, and feeling very uncomfortable about the 'rise of Japan'.

Some people might ask: 'Will there be a revival of the old militarism in Japan?' The record of Japan's behaviour in the past 60 years shows that this will not happen. Not once since the end of World War II have we resorted to the use of force in order to achieve our objectives. We have used diplomacy as a peace-loving nation. Another important safeguard against Japan's becoming militaristic is, of course, our democracy. The Government is accountable for how our defence capability and budget are formulated. This ensures transparency - something that is still lacking in China. The Japanese people also have a chance to examine, through public debate, which resources are truly necessary for our security, a process which is also denied to the Chinese.

Moreover, through these last 60 years, Japan has learned the importance of international cooperation in achieving development, peace and security. Having been the beneficiary of such assistance in the early postwar years, Japan has been making contributions in various countries around the world, particularly in Asia and the Pacific.

Japan is determined to continue its efforts to promote "sensible" regional cooperation and partnerships in the Asia-Pacific. On the economic front, Japan and other Asian nations as a whole are engaging in active negotiations to conclude economic partnership agreements (EPAs) and free trade agreements (FTAs). At the same time, against the backdrop of growing interdependence in Asia, ASEAN and ASEAN+3 have broadened their scope of regional cooperation. In particular, there is the East Asian Summit scheduled to be held in Malaysia in December, where countries such as Australia, New Zealand and India will be incorporated in this scheme to offer new perspectives. In such a manner, we are working closely with the ASEAN countries towards future regional partnerships, and are doing so in a positive and forward-looking spirit. In this exercise we do not hear many grudges or criticisms about the past from ASEAN countries.

While China and the Republic of Korea are not prepared to accept our apologies, it is extremely difficult for us to move forward on the issues of the past. By contrast, France long ago proved ready to accommodate Germany, while ASEAN countries were ready to work with Japan. Japan, for its part, is ready to listen and to talk in order to aim for a positive, future-oriented relationship with China, which will then contribute to regional stability as a whole.

4. Japan-UK Relationship

Finally, I would like to come back to the issue of Japan-UK relations.

Both countries can legitimately be viewed as major actors in the international community - we have very similar views on issues concerning Iraq, North Korea, Iran and Afghanistan, as well as on global issues such as the fight against terrorism, non-proliferation and climate change. We are cooperating and coordinating our policy on a day-to-day basis, both bilaterally and through multilateral frameworks such as the UN. Both countries share basic common values and social systems such as democracy, the rule of law, commitment to a free market economy and so on. For Japan, the UK is a country of extremely great importance, and for the Japanese people as a whole the UK evokes extremely positive feelings. Meanwhile, I believe that the UK has found Japan to be one of its most reliable partners in the Asia-Pacific region. We need each other much more than before in the conduct of foreign policy. In a world full of uncertainties, the Japan-UK relationship is a strong, important factor for peace and stability.

Links between our two countries have strengthened not only at the governmental level, but also at an individual level. There are now about 51,000 Japanese living in Britain, settled, and raising their families here. As I mentioned earlier, the business links between both countries are close and solid. Each year more than three hundred thousand Japanese people visit the UK. This means that our relations are not just conducted by politicians and diplomats, but by real people, in what Tony Blair has called 'people to people diplomacy'.

This is the same for our reconciliation activities. From the efforts of one person approaching someone who was once an enemy, more and more people have become involved in reconciliation. I would like to once again praise those who have been devoting themselves to reconciliation at an individual level. I do hope the future relationship between Britain and Japan becomes even stronger at the individual level, and that these robust ties in turn further bolster the relationship between our two governments. On this solid basis, I can summarise that 'We can work together and we can talk.'

Thank you very much.