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Japanese offer firms tax breaks in effort to polish imagein U.S.

Worried about mounting hostility to Japan's huge investments in the United States, the Japanese government has offered Japanese companies a large tax deduction if they give money to hospitals, schools and philanthropic activities in the United States, according to government officials. Japan has made no formal announcement of the move, but it was discussed at length during a highly unusual meeting of 300 of the country's top business executives, who were summoned by the Foreign Ministry last Friday.

The tax break _ effectively a Japanese government subsidy to American organizations _ is the latest and most significant move yet to try to defuse tension with the United States over Japan's growing presence there, which Japan now fears may be poisoning relations between the two countries.

In recent days, for example, the Japanese Chamber of Commerce has begun distributing 5,000 copies of an 85-page handbook containing advice to Japan-based companies in America on how to participate effectively in communities, supporting local charities and volunteering to work for local organizations.

Published with Japanese and English text on facing pages, the book is entitled, Joining In! A Handbook for Better Corporate Citizenship in the United States.

Among other suggestions, it urges Japanese executives to make sure they promote their community efforts.

"It is important in American society to take credit for good works accomplished," the handbook says. "This is not bragging, it is a matter of getting deserved credit."

The Japanese government's tax incentive was paired with a bluntly worded message from the government that Japanese companies have themselves to blame for much of the tension with the United States.

Americans fear, Foreign Minister Taro Nakayama said, "that it is impossible to guess where Japan's huge economic power is headed, and under what philosophy or principles."

"It is worth noting that now people in the U.S. are feeling less threatened by the U.S.S.R., and some are expressing the view that the economic threat from Japan is more serious than the military threat from the Soviet Union," Nakayama said.