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XXXV NO. 207 * * Thursday, June 23, 2011 Discovering Art By Hiding the Artist LIFE & STYLE Page 11 Obama’s Limited Options in Afghanistan OPINION Pages 13, 15 Obama’s Limited Options in Afghanistan ASIA As of 12 p.m. ET DJIA 12187.97 g 0.02% FTSE 100 5772.99 g 0.04% Nikkei 225 9629.43 À 1.79% Shanghai Comp. 2649.32 À 0.11% Hang Seng 21859.97 À 0.04% Sensex 17550.63 g 0.06% S&P/ASX 200 4532.60 À 0.54% asia.WSJ.com (India facsimile Vol. 3 No. 12) Australia:A$6.00(InclGST),Brunei:B$7.00,China:RM B25.00,Hong Kong:HK$18.00,India:Rs25.00,Indonesia:Rp18,000(InclPPN),Japan:Yen500(InclJCT),Korea:W on2,500, M alaysia:RM 6.00,Pakistan:Rs140.00,Philippines:Peso80.00,Singapore:S$4.00(InclGST),SriLanka:Slrs180(InclVAT),Taiw an:NT$60.00,Thailand:Baht50.00,Vietnam :US$2.50 KKDN PP 9315/10/2011 (026992) M ICA (P) NO.164/10/2010 SK.M ENPEN R.I.NO:01/SK/M ENPEN/SCJJ/1998 TGL.4 SEPT 1998 East Wind Lifts Industry Asia continues to power growth in the struggling global aerospace business, with Indian budget carrier IndiGo finalizing a massive order. Page 24 Heard on the Street China's households could end up bearing the weight of the nation's bad loans, hurting its consumer push. Page 36 Beijing Warns Washington BEIJING—On the eve of talks with the U.S., China warned against American in- volvement in the increasingly tense territorial disputes in the South China Sea and ac- cused some of China’s neigh- bors of “playing with fire.” Cui Tiankai, vice minister of foreign affairs, blamed other countries in the re- gion—and later singled out Vietnam—for provocation in recent incidents that have re- kindled longstanding acri- mony over control of areas in the vast stretch of water be- tween them. And he dis- missed calls from Vietnam and the Philippines for the U.S. to play a role in resolving those tensions, admonishing that Washington should “ap- proach such issues in a very prudent way.” “I believe some countries now are playing with fire,” Mr. Cui told a small group of re- porters. “And I hope the U.S. won’t be burned by this fire.” The fresh warning high- lights the difficult issues that dog ties between Beijing and Washington despite efforts to smooth relations after serious strains last year. The resur- gent tension in the South China Sea is likely to feature in Mr. Cui’s talks Saturday in Hawaii with U.S. Assistant Secretary of State Kurt Camp- bell, who oversees Asia-Pa- cific affairs, intended to be the first in a regular series of bilateral consultations on Please turn to page 20 BY JASON DEAN FedDowngrades Assessmentof U.S.Economy Federal Reserve officials downgraded their assessment of the U.S. economy’s perform- ance Wednesday, but gave no indication they intend to take new steps to boost growth and jobs. After a meeting of the Fed’s decision-making body, officials said they were sticking with plans to end the purchase of $600 billion in U.S. Treasurys as planned on June 30 and would keep short-term interest rates near zero for at least sev- eral more months. The recovery is continuing at a moderate pace, though “somewhat more slowly” than previously expected, officials said in a statement following the Federal Open Market Com- mittee meeting, echoing re- marks made by Fed Chairman Ben Bernanke in a speech ear- lier this month. Officials also said job market indicators have been weaker than anticipated, compared with when they last met in April. In updated forecasts re- leased after the meeting, Fed officials lowered their growth forecasts and predicted core inflation would remain higher than previously thought. The economy is now expected to expand at a rate of around 2.7% to 2.9% this year and 3.3% to 3.7% in 2012. That is below estimates given after the last meeting in April for growth of 3.1% to 3.3% in 2011 and 3.5% to 4.2% next year. Although the Fed is less comfortable with the economic outlook, it has less leeway to take new steps to fix it, since underlying inflation also has crept up, making the central bank leery of injecting more money into the financial sys- tem. The assessment from the U.S. central bank came as it faces sustained attacks by Re- publican presidential candi- dates in the U.S. In the latest salvo, former House Speaker Newt Gingrich was expected to call Wednes- day in Atlanta for a “dramati- cally limited Federal Reserve.” In the text of his comments re- leased in advance, he criticized the U.S. central bank for not staying focused on the Please turn to page 20 BY JON HILSENRATH The initial pullout of as many as 5,000 U.S. soldiers from Afghanistan is expected to start in July, President Barack Obama was expected to announce on Wednesday. Above, U.S. soldiers from Charlie Company patrol in Kandahar province on Wednesday. Page 3 Obama to Unveil Plan for Afghanistan Troop Drawdown Reuters China Releases AiWeiwei And Says He ‘Confessed’ BEIJING—Chinese authori- ties released on bail Ai Wei- wei, the country’s most fa- mous contemporary artist, because he “confessed” his al- leged crimes, agreed to pay back taxes he was accused of evading, and was suffering from a “chronic disease,” the country’s official news agency said. Mr. Ai said his health was fine as he thanked reporters for their support outside his studio late Wednesday, ac- cording to the Associated Press, but he said he wasn’t able to say more under the conditions of his release. “I can’t say much. I can say I’m out. I’m on bail. But I can’t say anything more un- der the conditions of my re- lease,” he told The Wall Street Journal by telephone. Asked for how long the media ban was in place, he said: “One year, at least.” He also confirmed that it applied to online communica- tions such as Twitter, on which he has a following of more than 88,000. Mr. Ai’s sudden release, an- nounced in a brief report by the Xinhua news agency late Wednesday, appeared to be de- signed to curtail widespread international criticism, but left many questions unanswered about his 11 weeks in extrajudi- cial detention and his future as an artist and activist. It came two days before Chinese Premier Wen Jiabao is due to begin a trip to Eu- rope that includes Britain and Germany, two countries whose governments and artis- tic communities have been Please turn to page 20 BY JEREMY PAGE Mr. Ai in Beijing early Thursday Re ut er s 2 * * THE WALL STREET JOURNAL. Thursday, June 23, 2011 THE WALL STREET JOURNAL ASIA Dow Jones Publishing Company (Asia) 25/F, Central Plaza, 18 Harbour Road, Hong Kong Tel 852-2573 7121 Fax 852-2834 5291 www.wsj-asia.com SUBSCRIPTIONS and Address Changes, please telephone our local customer service hotline, Hong Kong/Taiwan: 852-2831 2555; Beijing: 86-10 6581 4090; Shanghai: 86-21 5836 8228; Indonesia: 62-21 527 7592; Japan: 81-3 6269-2760; Korea: 82-2 756 1695; Malaysia: 60-3 2026 4061; Philippines: 63-2 848 5873; Singapore: 65-6415 4000; Thailand: 66-2 690 4222 to 7; India: 91-11 6462 0215. Or email: service@wsj-asia.com ADVERTISING SALES worldwide through Dow Jones International. Hong Kong: 852-2831 2504; Singapore: 65-6415 4300; Tokyo: 81-3 6269-2701; Frankfurt: 49 69 29725390; London: 44 207 842 9600; Paris: 33 1 40 17 17 01; New York: 1-212 659 2176. Or email: wsja.publisher@dowjones.com Trademarks appearing herein are used under license from Dow Jones & Company. USPS 337-350ISSN 0377-9920 PAGE TWO ONLINE TODAY Most read in Asia 1. China Data Leaks Face Probe 2. Investors Hazard Bold Bet on Yuan 3. QE2 Proves No Silver Bullet 4. The War Against Girls 5. Greek Vote Sets Stage for Cuts Most emailed in Asia 1. Investors Hazard Bold Bet on Yuan 2. The War Against Girls 3. China Data Leaks Face Probe 4. How to Raise a Philanthropist 5. Opinion: David McCullough: Don’t Know Much About History Scene blogs.wsj.com/scene Spanish actress Paz Vega wants to make an impact in China. But, so far, few people there have ever heard of her. Korea Real Time Pororo meets politics: blogs.wsj.com/ korearealtime Venture Capital Dispatch blogs.wsj.com/venturecapital Companies have been acquired directly as a result of an entrepreneur meeting the ‘right people.’ Alpha Club co-founder Eric Chin says his networking events use themes i i i Business & Finance n Taiwan’s financial regulator rejected a proposed $1.6 billion of- fer for Yageo from the founder of the electronics components firm and KKR, citing concerns over debt the parties were taking on. 21 n The new head of Mitsubishi UFJ Financial’s credit-card unit said the company aims to capital- ize on the jump in online pur- chases that has followed Japan’s March 11 quake and tsunami. 21 nMizuho’s new CEO gave a blunt assessment of the bank’s prob- lems, saying its management structure hindered governance and was one factor prolonging a computer-system failure. 22 n Two banks operating in the U.K. face fines for allegedly failing to guard against possible cus- tomer money laundering, after a regulatory review turned up weak- nesses in risk controls. 27 n Asian markets finished mostly higher, helped by rising hopes that Greece will avoid a debt de- fault, though rate worries kept Hong Kong and China in check. 31 n Asia is powering growth in the global airline industry, with Indian budget carrier IndiGo finalizing a $16.2 billion order with Airbus at the Paris Air Show Wednesday. 24 n United Test Assembly Center delayed its planned IPO in Singa- pore, indicating that investors’ risk appetite remains weak due to the poor global outlook. 26 n China’s top economic-planning agency will make it easier for lo- cal governments to issue bonds to finance public-housing projects, even as Beijing seeks to crack down on wayward borrowing. 6 n Hyundai Heavy forecast that ship orders will nearly double this year, though demand is unlikely to match that of the first half. 23 n Qantas agreed to a compensa- tion package from Rolls-Royce for an engine explosion, a profit booster for an airline facing higher fuel costs and union threats of industrial action. 24 n Transocean, in a new report, blames risky decisions made mostly by BP for leading to the Deepwater Horizon disaster. 23 n Elpida developed a memory chip package 20% thinner than similar ones on the market. 25 n Police seized $36 million in as- sets from Chinese-owned firms in Italy, in an antifraud crackdown. 6 n India’s capital markets watch- dog said it is looking to regulate distributors of mutual funds. 30 i i i World-Wide n EU leaders will this week reas- sert their commitment to bailing out Greece but stress the impor- tance of private-sector involve- ment and more budget cuts. 6 n Japan’s parliament voted to extend the session by 70 days to ensure the passage of key bills for postquake reconstruction. 4 n The head of Japan’s nuclear- crisis inquiry said he would focus on fact-finding and prevention rather than on laying blame. 4 n Nobel laureate Aung San Suu Kyi addressed U.S. lawmakers by video, the Associated Press re- ported, calling for a commission of inquiry into rights abuses. India’s Food Security Bill that promises cheap grains to millions of poor people will add $24.55 billion to the government’s annual subsidy bill. A girl carries a basket of chilies picked from a field in the Indian state of Uttar Pradesh. Page 5. Re ut er s What’s News— Inside Japan: Scholar leading nuclear-crisis probe rebuts critics. 4 On Other Fronts: Europe’s last sherpas race to the top. 8 In Depth: U.S. congressional jobs, outside income. 16-17 Heard on the Street: PetroChina burns natural-gas firms. 36 Thursday, June 23, 2011 THE WALL STREET JOURNAL. 3 WORLD NEWS Obama to Unveil Plan for Troop Pullout President Barack Obama will an- nounce Wednesday the first steps in a gradual plan to extract the U.S. from the war in Afghanistan, includ- ing an initial withdrawal of as many as 5,000 troops next month, defense officials say. Mr. Obama will detail the draw- down in a prime-time address to a nation increasingly weary of wars overseas and caught up with eco- nomic troubles at home. The con- flict in Afghanistan has left more than 1,600 Americans dead in al- most a decade of fighting. The pullouts are expected to be- gin in July when the first of the 33,000 “surge” troops head home. Military leaders told Mr. Obama they envisioned having all of the surge troops out around the fall of 2012, officials said. Defense officials expected the president to pull a total of roughly 10,000 troops out of Afghanistan by year-end. Such a plan is close to what Gen. David Petraeus, com- mander of U.S. forces in Afghani- stan, had recommended. The U.K., meanwhile, said Wednesday that it has already be- gun withdrawing troops from Af- ghanistan, where it is the second- largest contributor of foreign forces. U.K. Foreign Secretary William Hague said in a statement to Parlia- ment that around 200 of an ex- pected 426 personnel the U.K. plans to remove from the country by Feb- ruary 2012 have already been with- drawn. “Further withdrawals may be possible” depending on condi- tions on the ground, a person famil- iar with the matter said. The U.S. troop-pullout schedule would give the military two warm- weather fighting seasons—when Taliban attacks usually rise—before reducing U.S. forces to pre-escala- tion levels, or nearly 70,000 troops. The president decided the pace of the drawdown Tuesday and in- formed his national-security team in the Situation Room, an administra- tion official said. The White House wouldn’t confirm any details. De- fense officials said they weren’t cer- tain of the president’s final decision. Mr. Obama’s address won’t delve deeply into U.S. policy in the region, the senior administration official said, but will lay out for Americans a trajectory for winding down America’s role in the war. When he announced that escalation, Mr. Obama also promised to begin a “significant” withdrawal in July. By Adam Entous,Julian E. Barnes and Carol E. Lee A U.S. soldier scans the horizon at an outpost in Khost province Wednesday. A ge nc e Fr an ce -P re ss e/ G et ty Im ag es A single journey can change the course of a life. Cambodia, May 2011. Follow Angelina Jolie on louisvuittonjourneys.com 4 THE WALL STREET JOURNAL. Thursday, June 23, 2011 WORLD NEWS: JAPAN Plant Crisis-Probe Chief Rebuts Critics TOKYO—The Japanese scholar leading the probe into the Fuku- shima Daiichi nuclear-power plant crisis said he would focus on fact- finding and prevention rather than on laying blame for the accident, and dismissed criticism that the ef- fort lacked teeth. “Everyone makes mistakes,” wrote Yotaro Hatamura, who heads the new government-appointed committee investigating the con- tinuing disaster, in a guest book for the Japan National Press Club, where he then held a news confer- ence Wednesday. His note was read by the conference moderator. “We must caution ourselves against mak- ing mistakes but we also have to be generous with people about their mistakes.” Mr. Hatamura, a professor emeri- tus of engineering at Tokyo Univer- sity, was appointed last month by Prime Minister Naoto Kan as head of the 10-person committee that will conduct broad investigations into the Fukushima accident. The com- mittee is expected to release its in- terim report at the end of the year, Mr. Hatamura said, adding he hoped to finish by the summer of 2012. Critics have called the committee ineffectual because it doesn’t have the authority to force people out- side the government to testify or submit evidence, let alone to prose- cute them. And while the committee can require government officials to cooperate, it doesn’t have authority over executives of Tokyo Electric Power Co., operator of the plant. Mr. Hatamura responded that forcing people to testify won’t nec- essary reveal the truth. Rather, he said, he trusts “people will do what they can be proud of and withstand the test of time.” He also said the committee is re- luctant to make all testimony open to the public, as it would discourage people from coming out to tell the truth. “People tend to think trans- parency is the most important thing,” he said. “But there will be so many people who decide not to co- operate the minute testimonies be- come open.” As for holding people account- able for the accident, Mr. Hatamura said the government needs to set up a separate body to do the job. The selection of committee members also has been questioned. The members were appointed by the government, whose handling of the accident and close ties to the power industry are under scrutiny. “It’s hard to imagine the world will trust the committee appointed by the government,” said Nobuteru Ishi- hara, a senior official of the opposi- tion Liberal Democratic Party, last month. To make the committee indepen- dent from the nuclear-power indus- try and regulators, the government tapped experts mostly from unre- lated areas. Mr. Hatamura, 70 years old, has been a professor of engi- neering at the University of Tokyo for the bulk of his career and is known for his work examining mis- takes made by engineers and com- panies in developing products, and how to learn from those mistakes. In recent years, he has participated in probes into high-profile acci- dents, such as a 2005 train derailing in Hyogo, Japan, that killed 107 peo- ple. Other members include former prosecutors, a diplomat, a novelist and the mayor of a town contami- nated by the Fukushima accident. “I don’t have specific feelings about nuclear power, whether it’s good or bad, or I like it or not,” Mr. Hatamura said. “I do see it as some- thing very scary but something that we still have to live with.” The members held their first monthly meeting June 7 and visited the Fukushima Daiichi plant last week. Mr. Hatamura said he has been frustrated by the late launch of the investigation. “A committee like this should have been put together a week or two after the accident, so people can learn what they need to learn when they really need to,” he said. BY YUKA HAYASHI Yotaro Hatamura, of the University of Tokyo, at his first meeting heading the committee investigating the nuclear crisis. Bl oo m be rg N ew s Japan Parliament Is Extended TOKYO—Japan’s parliament ap- proved a ruling-party proposal to extend the current session by 70 days to ensure the passage of key legislation for postquake recon- struction, but a lack of opposition support suggests the country’s po- litical paralysis is likely to drag on. The extension, which came on the final day of the session, followed days of talks between the ruling Democratic Party of Japan and the opposition to break the stalemate, exacerbated by Prime Minister Naoto Kan’s refusal to make clear the timing of his resignation. “We cannot accept the extension as it reveals Mr. Kan’s intention to prolong his time in power,” Sadakazu Tanigaki, head of the main opposition Liberal Democratic Party, said after the vote. The two largest opposition par- ties voted against extending the ses- sion until Aug. 31, but the DPJ’s ma- jority in the more powerful lower house ensured the measure's pas- sage. The ruling party will still need the cooperation of opposition par- ties to pass bills submitted during the extended session because they control the upper house, which can block most legislation. In addition to a bill to issue bonds necessary to finance 40% of the budget for the fiscal year that began in April, the DPJ wants to enact a second emer- gency spending package for disaster relief, expected to be valued around ¥2 trillion ($24.94 billion). If the ruling and opposition camps can’t compromise, Japan faces further political paralysis, which has hampered the govern- ment amid coping with the after- math of the March 11 disaster. Because the opposition is unwill- ing to do business with Mr. Kan, the 70-day extension will only delay the passage of much-needed relief spending, said Mr. Tanigaki, the LDP’s leader. “An objection to the