welcome to "newsline." i'm hideshi hara in tokyo with the latest at this hour. north korea warns it will attack south korea if the country resumes scheduled live fire drills on yeonpyeong island in the yellow sea. south korea suspended the drills in the wake of north korea's shelling of the island on november 23rd, that killed four people. south korea plans to resume the drills between saturday and next tuesday depending on weather conditions.

the south says, artillery shells will be fired at sea in the opposite direction to a u.n. designated maritime border. but the north does not recognize this border and claims that the waters around the island are its territory. the north's official korean central news agency reported on friday evening that the military had requested in writing earlier in the day as south korea immediately canceled the drills. >> a south korean military official acknowledged they had received the request, but said they do not have to give into the north's threat.

u.s. joint chiefs of staff vice chairman james cartwright has expressed concern that tensions could escalate on the korean peninsula. >> if that is misunderstood or if it's taken advantage of as an opportunity, if north korea were to react to that in a negative way and fire back, that would start potentially a chain reaction of firing and counter firing. >> he added that the u.s. military will send observers to the drill. cartwright's remarks apparently indicate that the u.s. and south korea militaries are trying to avoid giving north korea an excuse for provocation. japan is shifting its approach to defense. it plans to upgrade the mobility of the self-defense forces to enable them to respond to moves by north korea and china. the cabinet endorsed the guidelines on friday. they are the first in six years. the guidelines call north korea an unstable factor in the region's security. china, they say, is a growing concern for the international community as that country

becomes more active in waters near japan. e plan calls for boosting the surveillance capabilities of the sdf and enabling troops to be more mobile. the changes reflect a shift from a deterrent stance to one that allows japan to readily counter emergencies. the number of ground sdf personnel will be cut by 1,000 along with a substantial reduction in the number of tanks. the maritime and air self-defense forces will be reinforced and more submarines will be used. security will be increased in the waters of southwestern japan by deploying ground sdf troops on the nansei islands. the guidelines don't mention relaxing the ban on weapons exports, something originally sought by the government. they only say japan will study participating and development and production of defense equipment with other countries. the government also approved an outline of the defense budget for the next five years totalling some $280 billion for the whole period. as a result, expenditures for

each of the next five years will be about the same as this fiscal year. >> translator: challenges to the uncertainty surrounding japan's national security are becoming more complex. our basic understanding is we need to shift our defense policy to deal with such situations. our reporter junko noda joins us in the studio. junko, why the change and why now? >> hideshi, in recent weeks, areas near japan have proven to be a dangerous neighborhood. the government thinks it needs to focus on security concerns stemming from china's rising naval power and north korea's provocations. a defense expert told me he thinks japan needs to avoid leaving areas unpatroled. >> in southwest island of japanese territory until now we did not deploy any military forces in those areas.

so this might provoke neighboring countries aggression. so i think it is mostly to prevent those frustrations, we deploy military forces on border islands and we thus can avoid military problems in the area. >> now, junko, japan has been strengthening its alliance with the united states in recent days, hasn't it? >> yes. the two countries conducted joint military exercises this month including the area of okinawa's main island. the u.s. is also concerned about china's increasing naval power. in particular, it wants to make sure its aircraft carriers will still be able to navigate the waters near china. so the u.s. expects to work with japan's maritime force to upgrade their ability to deal with china's submarines. >> nhk world's junko noda, thank you.

and being called a concern for international committee isn't sitting well with the chinese government. it is condemning japan's shift in defense policy. state-run china central television had extensive coverage of japan's new defense guidelines on friday. it ran a telephone report by a tokyo correspondent and commentaries by experts. >> the china youth daily also reported in its friday edition that the japanese government's aggressive defense stance will not only make neighboring nations nervous but will not benefit japan. a big part of the japanese defense strategy includes a decades old alliance with the united states. prime minister kan is trying to make good on a promise to relocate an american base within okinawa. but his meeting with the

southern prefecture's governor failed to reduce local opposition to the plan to move the futenma air station from ginowan to nago city. kan arrived on the island on friday, his first visit to the island as prime minister. he met the governor in the city. nakaima told kan he had promised voters in the recent gubernatorial campaign he would work to relocate futenma outside of okinawa. he asked the prime minister to face reality and help implement the wishes of the local people. >> translator: relocating the base within the prefecture has become extremely difficult since january's mayoral election in nago in which a candidate opposed to the plan won. i urge that the base be moved outside okinawa. >> kan asked the governor to reconsider taking into account recent international developments. he suggested his government would positively consider requests from okinawa for a new law to stimulate the prefecture's economy and for

unconditional tax grants. >> translator: i understand the transfer to henoko in nago isn't a better option for the okinawa people. when it comes to feasibility, it is a better choice than any other. >> the prime minister plans to visit okinawa's key locations for development and other areas related to u.s. bases so he can fully grasp the local situation. the japan aerospace exploration agency says there are several likely causes behind last week's failure of the akatsuki probe to enter orbit around venus. the agency reported findings on friday's government panel

meeting on space development. it had earlier explained that the akatsuki probe lost control when its engine output failed sharply during a reverse thrust maneuver. agency officials told the panel that the problem may have been caused by engine failure triggered by a malfunction in the coolant system. they said another possible cause was abnormalities that may have led to unstable fuel combustion. members of the government panel told the space agency to check the accuracy of the data for its investigation. the panel plans to receive more briefings from the agency and study whether the akatsuki probe could be put into orbit around venus in six year's time. a regular morning commute to school and work turned into a nightmare on friday for two busloads of people in a city not far from tokyo. a man armed with a knife attacked several commuters during the morning rush hour in toride. 14 people were injured. 12 of them teenagers.

nhk world has the details. >> reporter: shrieks of horror filled the station on friday, shortly before 8:00 in the morning. the place was packed with commuters when a man holding a knife boarded a bus bound for a high school. he began stabbing and punching the students. the man then got on to another bus parked right behind it and continued his attack. eight high school students, four junior high students and two others suffered injuries.

>> reporter: a few passengers eventually managed to subdue the man before he could flee. police have arrested him for attempted murder. investigators have identified him as 27-year-old yuta saito from a nearby city. along with what was used in the attack, the man was also carrying a small kitchen knife. police say he told them he wanted to end his life and that he wasn't planning on killing anyone. they also say saito is jobless and disappeared from his home a few days ago. he has apparently been sleeping

on the streets. he told police that on the night before the attack, he slept near the crime scene. the random assault is not the first in japan this year. it has left many people concerned. satoru aoyama, nhk world, toride, japan. "newsline" is bringing you a new series about china and its booming economy. we'll be looking at everything from the gap between rich and poor in china to the race between japan and south korea to win over chinese tourists. china rising starts with a snapshot of the country's soaring economy and the impact it is having on the rest of the planet. nhk world's yuko fukuyama picks up the story from beijing. >> reporter: china's gross domestic product this year is

almost certain to surpass japan's and become the world's second largest after the united states. in 1990, china's gdp was $390 billion, roughly one-eighth of japan's. but through its reforms and open door policy, china has attracted u.s., european, and japanese business. as its gdp kept escalating, the country earned the nickname the world's factory. on the other hand, after the birth of the economic bubble in the early 1990s, japan's economy continued its largest growth. the gdp gap between japan and china has continued to shrink. some economists predict that if china can maintain its growth, it will be on par with the united states in the 2020s. but china also faces problems

associated with economic growth, such as inflation and a surge in housing prices. the widening wealth gap is also becoming a social problem as the benefits of growth have yet to reach everyone in the large and populous nation. china is increasingly being viewed as the growth center for the global economy. the international community is watching closely to see whether the country can maintain its growth without overheating. yuko fukuyama, nhk world, beijing. >> china's economy is also being fueled by its investments abroad. the country's businesses are expanding their global reach. one place on the radar is brazil. the emerging economy has 200 million consumers. chinese companies are now trying to take advantage of opportunities along the amazon river and that's increasing the competition for japanese businesses that have already set

up shop there. nhk world reports. >> reporter: manaus is a city along the amazon river. 1.7 million people live here. the brazilian government has designated manaus as a free zone, offering companies tax breaks and other incentives. i'm in the industrial district in manaus. they cut down rain forests, it attracted many of the world's greatest enterprises because of the tax break. the growth of the city's motorbike industry is especially remarkable. nearly 1.6 million are sold every year. motorbikes are used for commuting and shopping. honda has a market here of more than 70% japan has about 90% of the motorcycle market.

but local dealers have been changing their business partners recently. this dealer handles products by two chinese makers. they offer lower prices for some motors. >> most parts come from china. >> reporter: this 100 cc motorbike, the cheapest motor available, costs about $1500. that's more than 30% cheaper than similar japanese products. chinese motorbike companies keep their costs down by making 70% of their products with parts from china, where labor costs are low. dealers also try to reassure consumers by offering guarantees of up to two years. >> the brazilian customers, they want to change. they want warranty. they want better prices instead of paying a high price for bus tickets, you better pay your month payments for this kind of

product. >> reporter: the chinese makers have a political aspect as well. china has been fostering and strengthening cross ties with other emerging economies in the fields of trade and energy. last year china became brazil's number one trading partner, putting the u.s. in second place. >> translator: trade with china has increased nearly eight fold during my eight-year presidency. china is our greatest trading partner. >> reporter: a subsidiary of one of china's leading motorbike manufacturers, traxx, started in the city three years ago. the company is focusing on small motorbikes that are popular with customers. it has expanded its dealership network to more than 120 outlets around brazil.

the president of the company would not agree to an interview on camera, but the firm says it hopes to attract consumers by offering cheap loans and to expand its market share to 10% by the end of next year. the share of chinese motorbike makers in brazil is still very small. but japanese companies are weary of china's steamroller tactics. >> translator: china is our greatest threat. most of the companies here, except for one japanese maker, are chinese. the quality of chinese products will improve with time and experience. china is catching up. >> reporter: japanese companies face a challenge of an emerging china that aims to become the world's largest economy. eigo suzuki, nhk world, manaus, northern brazil.

>> in our series china rising will continue on monday on "newsline." don't miss our story of how the country's book dealers are rushing to tokyo to snap up antique chinese volumes. the japan automobile manufacturers association says domestic auto sales next year will drop nearly 10% as government incentives for ecocar buyers have expired. new car sales this year are expected to reach just over 4.95 million units, up about 7.5% from 2009, that would be the first year on year gain in six years. but the association predicts sales for 2011 will fall by 9.9% to a little over 4.4 million autos. it says without any incentive program, the slowdown is expected to continue for some time.

>> translator: japanese automakers must continue introducing new models to keep customers interested. we hope that will help spur demand. >> he says the downturn in sales will be compounded by a sluggish economy. the market for liquid crystal display panels is heating up. japan's major electronicsmaker sharp plans to boost its production of small lcds for smartphones. sources say the company will build a new lcd production line at the existing plant in central japan at a cost of $1.2 billion. sharp had been making lcd display panels for televisions at the plant but decided last year to sell the manufacturing equipment to a chinese electronicsmaker. the company will use the empty space to build aew production line. full-scale output is expected to start in 2012, sharp will supply the panels to u.s. computermaker apple. sources say apple is likely to

bear much of the cost of setting up the new facilities. japan is a great place to do business. that's what the government is trying to convey to potential investors by promising to cut the corporate tax rate by 5%. it's come up with a plan to attract and maintain foreign investment. the ministry of economy, trade, and industry is going to put forward a bill early next year. it will propose a further cut of about 7% in the corporate tax for five years, aimed at foreign firms that meet certain conditions. the motivation is clear. some international companies are moving out of japan. last year, u.s. consumer productsmaker procter & gamble shifted to singapore. the ministry is concerned this may harm japan's economic foundation. it wants to attract about 30 global firms each year by offering favorable treatment. along with tax incentives, it is also proposing to exempt foreign corporations from patent fees if

they maintain research centers in japan. here is other news we gathered from broadcasting stations across asia. first, this item sent by rtn malaysia. the militaries of malaysia and thailand will hold their first ever joint exercise in april of next year. the top generals of both countries reached the decision in kuala lumpur on thursday. the drill involving their armies, navies and air forces will be held in thailand's central province. a malaysian general says the objective of the exercise is to exchange ideas on the security of their mutual border. he added other law enforcement agencies will also take part. sri lanka's slrc will begin using digital technology to improve and expand its tv broadcasts. a senior government official said in colombo on thursday that northern and western provinces will start digital broadcasting from next year.

the new system will cover the entire nation by 2013. the minister added the viewers will have seen -- will have seven years to buy converters or new digital tv sets. two giant pandas from southwest china sichuan province are set to take their first flight to macau on saturday. the government is sending the couple to the macau special administrative region to mark its tenth anniversary. caretakers of the pandas have already been feeding them the local food including pastries and bamboo. the combined names of the couple mean happiness in chinese and were chosen through a naming contest in macau. hello again. time for another world weather update let's go into eastern asia, see what's going on. well, it's going to be a very pleasant weekend for many of you across the continent. strong high pressure in place

here across indochina, china, up into mongolia as well as the korean peninsula. and temperatures on the rebound as well as having lots of nice, sunny spells. where it's going to be a little bit different is japan. and we've got this low pressure system here. it's starting to pull away. but we still see a lot of snow and very strong wind into the weekend. on saturday night, blizzard conditions are expected in parts of northern honshu and hokkaido. sunday should be better. we are going to see some light snow moving across mongolia. it is going to be quite light. can't quite see it here, but it shouldn't be too cold because the southerly winds will keep coming up. and things are not going to be too bad temperaturewise. 7 degrees in seoul, 7 in beijing, minus 6 in ulan bator. down in hong kong, a bit chilly for you, but 17 on the cards for you on saturday, here in tokyo, sunny day, and 12 degrees for the high. all right. let's head now to north america. we've seen lots of wintery weather this week. i want to show you some of the video coming out of the midwest

and down into the southeast, as well. this is coming out of locations like ohio as well as indiana. winter weather chaos just ensued. combination of snow and sleet caused hundreds of road accidents. down further towards the southeast and the carolinas and georgia, as well, drivers abandoned their cars when they were just undrivable because of these very slick icy roads. just so dangerous. many, many accidents. in addition, schools and businesses across the region were closed. and power outages and things like that, as well. unfortunately, i don't have much in the way of good news for you. we've got a front line passing through the southeast here. couple of low pressure systems developing, and this is going to push up towards the mid-atlantic. this is where it's going to get icy again. you need to be aware as we head into the weekend, could cause some problems. down towards the south, it's going to be mostly rain and thunderstorms for you. it is a bit warmer down here.

out to the west, we have another big winter storm brewing. a snowmaker, plenty of heavy snow for places like new mexico, as well as the mountains towards california. about 30 centimeters is possible in the next 24 hours. also heavy rain to the coast here, so do watch for that. temperaturewise, not too bad. pair of sevens in the pacific northwest. and in atlanta, we've got 10 degrees, hovering around zero in the northeast. now, as for europe, what can i say? it's very, very wintery and cold here. you can see what i'm talking about. lots of low pressure systems dotted about. and it's going to mean that, well, you all get a share of the wealth in terms of snow. it's going to be very heavy in some places. could cause problems in terms of travel. check that. down towards the south, not going to be snow, but very unsettled. this time rain and thunderstorms for southern italy down into the southern balkans too. the good news is storms in southern turkey are going to start to ease. so that pushes out for the time being. you'll get a bit of a break so it's been heavy rain for you all week.

temperatures, minus 3 in stockholm, minus 6 in berlin, out to the east minus 7 in moscow on saturday. that's a bit better. 15 in athens, warming up here too. and just zero in london. here's your extended forecast. that concludes this edition of "newsline." i'm hideshi hara in tokyo.

we'll be back in half an hour. thanks for joining us on nhk world.