[华尔街日报亚洲版].WSJA-041010-A-COMPLETE

VOL. XXXV NO. 24 * * Monday, October 4, 2010 ASIA As of 4 p.m. ET DJIA 10829.68 À 0.39% FTSE 100 5592.90 À 0.80% Nikkei 225 9404.23 À 0.37% Shanghai Comp. 2655.66 Closed Hang Seng 22358.17 Closed Sensex 20445.04 À 1.87% S&P/ASX 200 4579.25 g 0.08% asia.WSJ.com Surge in kimchi prices hits South Korean restaurants WORLDNEWS 4 Monetary instability threatens the recovery EDITORIAL &OPINION 13 (India facsimile Vol. 2 No. 85) 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 PPS 648/11/2010 (028507) KKDN PP 9315/10/2010 (025811) M ICA (P) NO.048/10/2009 SK.M ENPEN R.I.NO:01/SK/M ENPEN/SCJJ/1998 TGL.4 SEPT 1998 The Commonwealth Games opened in New Delhi on Sunday night with a lavish ceremony, as India tried to move past weeks of criticism over its lack of preparedness for the event. Still, an Indian team official who had been living at the athletes’ village was diagnosed with dengue fever just hours before the opening of the Games. Pages 3 and 9; more at india.WSJ.com India opens problem-plagued Commonwealth Games Agence France-Presse/Getty Images Chinaoffers itssupport toGreece Chinese Premier Wen Jia- bao offered Greece a major vote of confidence on a visit to the debt-ridden European nation, saying China will con- tinue to buy Greek bonds and announcing the creation of a $5 billion fund to help Greek shipping companies buy Chi- nese ships. The remarks represent some of China’s most substan- tive support for the euro zone amid the region’s debt trou- bles, and reflect the Asian gi- ant’s growing willingness to wield its economic clout to obtain wider international in- fluence. Mr. Wen’s Athens visit kicks off a week of inten- sive Chinese-European diplo- macy, with the premier head- ing to Italy and Turkey as well as to summit meetings with European Union leaders in Brussels. “We hope that by intensi- fying cooperation with you, we can be of some help in your endeavor to tide over difficulties at an early date,” Mr. Wen said Sunday in a speech to the Greek parlia- ment. “China will not reduce its euro-bond holdings and China supports a stable euro.” China has long had eco- nomic interests in Greece, pri- marily in its shipping indus- try, and it runs a substantial trade surplus with the Euro- pean country. China’s rela- tions with Greece have come into focus in recent months as Greek officials actively lob- bied the Asian nation to sup- port its economy. Athens is desperate for investment as the country claws its way out of a deep recession and a debt crisis that drove it to the brink of bankruptcy in May. “These agreements and the announcement of China’s in- tent to continue to invest in Greek bonds are seen as a vote of confidence for our economy, which is going through a difficult time,” said Greek Prime Minister George Papandreou. “As we say in both Greece and China, it is in the tough times that you know who your friends are.” Please turn to page 18 By Nick Skrekas in Athens and Andrew Batson in Beijing Yuan link to U.S. jobs in doubt Suppose the Chinese, un- der intensifying pressure from the U.S. Congress and Obama administration, did let their currency, the yuan, climb 20% against the U.S. dollar. Then what? The goal of U.S. politicians, of course, is jobs, which are in short supply these days with u n emp l o y - ment at 9.6% and projected to remain high for years. Proponents of a measure that passed the U.S. House last week to put pressure on China say a higher yuan would create thousands of U.S. jobs. The higher the Chinese currency, the logic goes, the costlier and thus less attractive are Chinese exports to Americans and others, and the more at- tractive are imports to Chi- nese business and consumers. But there are reasons to doubt that even a hefty in- crease in the value of the yuan would yield big gains for the U.S. For one thing, the last time a large revaluation of the yuan occurred, it had little impact. Stephanie Lester, vice president of inter- national trade for the Retail Industry Leaders Association, a Rosslyn, Va., group whose members tend to benefit from a cheap yuan, says that when China allowed its currency to appreciate by about 20% be- tween 2005 and 2008, many retailers didn’t shift produc- tion out of China. The reason: The currency is only one factor that influences where companies make things. Factors such as infrastructure, labor costs and political stabil- ity are also decisive, Ms. Lester says. Indeed, according to the Commerce Department, the U.S. trade deficit with China surged to $268 billion in 2008—up from $202 billion in 2005—despite the updraft in the yuan’s value. Another problem is that the U.S. no longer makes many of the goods China exports. So a shift in business out of China, for whatever reason, would more likely mean pro- ducers go to other low-cost Asian countries, rather than rebuild U.S. capacity. Chinese Premier Wen Jia- bao, in an interview with CNN’s “Fareed Zakaria GPS,” which aired Sunday, said some U.S. lawmakers were “politicizing” the U.S.-China trade imbalance. He noted that the yuan has appreciated by 55% against the dollar since 1994, when Beijing be- Please turn to page 18 BY KATHY CHEN THE OUTLOOK dingbat Economist Roubini warns of ‘growth wall’ in China............ 19 Steadier ground Howmany yuan one U.S. dollar buys Source: WSJ Market Data Group Note: The scale is inverted to show the strengthening of yuan 8.5 8.0 7.5 7.0 6.5 '06 '07 '08 '09 '102005 More energy, fewer emissions. With technology we can do both. To meet growing demand, the world will need all economically viable energy sources—while also mitigating emissions. ExxonMobil is developing technologies to help address this challenge today and for the future. Learn more at exxonmobil.com 2 * * THE WALL STREET JOURNAL. Monday, October 4, 2010 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: 66-2 652 0871; 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. Tokyo Protests Blast China’s Stance 2. High-End Real Estate Holdouts 3. In North Korea Photos, a General Trend 4. CIA Escalates Campaign in Pakistan Most emailed in Asia 1. Tokyo Protests Blast China’s Stance 2. The Folding Bike Goes Cool 3. How a Trading Algorithm Went Awry 4. Sadanand Dhume: Bangladesh, ‘Basket Case’ No More Golf blogs.wsj.com/dailyfix Follow the latest action on the Ryder Cup from Newport, Wales. Continuing coverage Brazilian voters on Sunday were expected to elect the country’s first female president: www.wsj.com/World Travel Alert asia.WSJ.com The U.S. advised its citizens to show vigilance in traveling to Europe, citing concerns about a potential terrorist attack. i i i Business & Finance n U.S. stock-trading volume was 25% below the highest of the past three years in the third quarter, even though the market posted its best September in decades. 19 n Regulators investigating the May 6 “flash crash” in U.S. stocks singled out a computer-driven trade by a Midwestern mutual- fund company. 26 n Japan will help promote proj- ects to develop rare-earth miner- als in Mongolia as it seeks to di- versify sources of materials needed for high-tech products. 5 nMicrosoft accused Motorola of violating patents with phones that use Google’s Android operating system. 20 n The Bank of Japan is expected to further loosen its monetary pol- icy at a two-day meeting that be- gins Monday. 25 n The tougher bank standards negotiated by bank supervisors aren’t sufficient to ward off an- other financial crisis, the IMF warned. 6 n Chinese wind-turbine maker Xinjiang Goldwind priced its Hong Kong IPO in a deal set to raise about $913 million. 25 n Chinese IPOs are facing re- newed demand from U.S. investors after riding out a bumpier stretch earlier in the year. 21 nMost Asian currencies appear likely to pull back this quarter as central banks step up their efforts to rein them in. 25 n The prospect of further efforts by the Fed to bolster the U.S. economy looks likely to weigh on the dollar in the near term. 29 n Repsol will sell 40% of its Bra- zilian unit to China’s Sinopec for $7.1 billion. 22 n Passenger cars would have to obtain an average of up to 62 miles a gallon by 2025 under an initiative by the Obama adminis- tration to control greenhouse-gas emissions. 23 n Leo Apotheker, named H-P’s new CEO, has a heavy sales focus and a reputation for making tough decisions. He also received an ini- tial pay package that could be worth more than $50 million. 24 n The U.S. SEC is close to filing civil fraud charges against Satyam in connection with a $1 billion ac- counting scheme at the Indian software maker. 21 n The merger of UAL and Conti- nental Airlines closed Friday, months earlier than originally ex- pected. 23 n Hyundai Motor Group and Hyundai Group are set to compete with each other for a stake in Hyundai Engineering. 22 i i i World-Wide n The U.S. military is diverting aerial drones and weaponry from the Afghan battlefront to expand the CIA’s campaign against mili- tants in their Pakistani havens. 12 n The first round of international climate talks hosted by China highlights the biggest energy con- sumer’s struggle to expand its role in global-warming policy while shining a spotlight on the coun- try’s ambitions and shortcomings in clean energy. 5 n Police arrested the engineer of a train that plowed into another at a station in central Indonesia, kill- ing 36 people, and accused him of negligence. n A four-story building under construction in China’s northwest and a factory wall in an eastern city collapsed in separate acci- dents, killing at least 14 people and injuring eight others. n Died: Kwa Geok Choo, the wife of Singapore’s founding father, Lee Kuan Yew, who described her as his “tower of strength,” and mother of the city-state’s current prime minister, in Singapore on Saturday at age 89. King Abdullah II of Jordan, left, welcomes U.S. special envoy for the Middle East George Mitchell before a meeting in Amman on Sunday. This weekend, Egypt backed the Palestinians’ refusal to negotiate with Israel as long as it continues to build West Bank settlements, even as officials urged for continued diplomacy to salvage the month-old talks. A ge nc e Fr an ce -P re ss e/ G et ty Im ag es What’s News— Inside World News: In North Korean photos, general trend emerges. 4 Quarterly Markets: A global review of the third quarter. 16-17 Business & Finance: How a stronger yuan could help China. 19 Management: Compe- tition regulator weighs Australia’s future. 36 Monday, October 4, 2010 THE WALL STREET JOURNAL. 3 WORLD NEWS India aims to repair Games’ image NEW DELHI—India sought to re- pair its tarnished image as host of the Commonwealth Games with a lavish opening ceremony Sunday, following the latest setback for the event this weekend when an Indian team official was diagnosed with dengue fever. The Games, which have brought together 71 nations and territories in the British Commonwealth, were meant to attract a legion of tourists to New Delhi. But local officials said a spate of bad news in recent weeks about In- dia’s lack of prep- aration for the event—including the cleanup of filth at apart- ments for athletes in the Games Village and the col- lapse of a footbridge that injured 25 people—scared away many potential travelers. The smaller turnout also threatens to further antagonize local entrepreneurs who have been incon- venienced by Games-related con- struction for years, and were look- ing forward to the payoff from deep-pocketed customers from abroad. The centerpiece of the Games’ opening show Sunday evening at Jawaharlal Nehru Stadium was a gi- ant helium-filled balloon decked with mirrors, video screens and folk puppets. Viraf Sarkari, director of the opening ceremonies, called the $8 million installation “a technolog- ical masterpiece.” To officially kick off the Games, Prince Charles read a short message from Queen Elizabeth. Later, A.R. Rahman, who won two Oscars for his music in “Slumdog Millionaire,” composed and performed the theme song for the Games. Some saw the performance as a slightly odd choice, as many Indians found the foreign-made movie an offensive portrayal of India. In the latest setback for New Delhi, Ruptu Gogoi, a 30-year-old of- ficial with the lawn bowls team, was admitted to the GB Pant hospital in New Delhi on Saturday night and was said to have the disease Sunday. He is the first person affiliated with the games to contract the illness, the Associated Press reported. Dengue fever, a painful illness that can be life-threatening, is a vi- ral disease that spreads through mosquito bites. It has become an is- sue in the Indian capital this year because of the extended monsoon season, which increased the amount of stagnant water around the city. It wasn’t clear whether Mr. Go- goi contracted the disease at the athletes’ village or before moving in. India’s Games Organizing Com- mittee said it expected the opening ceremony broadcast to be available to two billion to three billion people around the world. But sports mar- keters said the actual viewing audi- ence wouldn’t be huge in India and was likely much smaller globally than bigger events like the Olympics and the FIFA World Cup. India has spent nearly a decade trying to build up its image overseas with a marketing campaign called “Incredible !ndia.” Billboards under that branding in cities such as New York included images that touted In- dia’s varied landscapes and culture: a woman doing yoga, shadows mov- ing across the Himalayas, and the Taj Mahal in Agra. Posters in Los Angeles last year played off Holly- wood movies, including one with pictures of boats roaming the wa- ters of the Ganges that was labeled “Mystic River.” The lackluster run-up to the Games has set back some of the progress that branding campaign made. Images of filthy toilets and stories of cobra snakes on the loose were beamed around the world. V. Sunil, an advertising executive who created the marketing cam- paign in 2002, said the last few weeks have been heartbreaking. “We have been going around the world trying to portray the country in a good light—away from the idea that it’s a land of snake charmers,” he said. “Now to see all the negative things said about Delhi and India is depressing.” Mr. Sunil, who is now at global advertising agency Wie- den+Kennedy, said he is developing a new pro-Commonwealth Games campaign that will include online videos and posters featuring the Games tiger mascot, Shera. New Delhi had hoped to attract about 100,000 foreign tourists dur- ing the next two weeks, compared with the usual influx of 150,000 for all of October. But Manoj Kumar, a spokesman for the city agency that operates tours for foreign travelers, said fewer visitors were showing up than expected because of “adverse publicity” surrounding the Games. “We feel travel agents are advis- ing people to come only after the Games,” he said, acknowledging that it’s possible Delhi will actually end up with fewer tourists for the whole month than in an ordinary year. Despite the disappointing tourist numbers, business at New Delhi’s luxury hotels has been brisk because of the thousands of Games officials and staff that have descended on the city. The Lalit hotel in the cen- tral area of Connaught Place has been fully booked for the past year. Assistant front office manager Nive- dan Kukreti said there are “very few tourists” staying in the hotel. A smaller hotel, the Claridges, has served as a location for Games staff to meet daily to discuss security for the event, said spokeswoman Harsh- ita Singh. —Linda Blake contributed to this article. BY AMOL SHARMA AND EMILY VEACH GAMES 2010 DELHI CME Group is a trademark of CME Group Inc. The Globe logo, CME, Chicago Mercantile Exchange, E-mini and Globex are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange Inc. COMEX is a trademark of Commodity Exchange Inc. All other trademarks are the property of their respective owners. Copyright © 2010 CME Group. All rights reserved. David Harding has a perfectly clear picture of risk. As managing director and a founder of one of London’s most promi- nent commodity trading advisors, with $13 billion under management, David relies on CME Group to manage a complex portfolio that includes everything from cattle futures to Eurodollars. With unparalleled liquidity, transparency and speed, and the security of central counterparty clearing, CME Group guarantees the soundness of every trade. That’s why CME Group is where the world comes to manage risk. Learn more at cmegroup.com. DAVID HARDING Managing Director, Winton Capital Management Managing risk is an art in itself. 4 * * THE WALL STREET JOURNAL. Monday, October 4, 2010 WORLD NEWS: ASIA General trend emerges in Pyongyang Photo of North Korean elite highlights power shifts in regime; little-known military leader gets key promotion The biggest winner of last week’s North Korea leadership shuf- fle—apart from Kim Jong Il’s son, who is being positioned to take over the authoritarian regime’s leader- ship—appears to be a little-known general whose several promotions have put him at the literal center of the country’s political elite. The general, Ri Yong Ho, sat be- tween Kim Jong Il and his son, Kim Jong Eun, in an official photo of nearly 300 officials that was taken at the end of the high-profile meet- ing of the ruling Workers’ Party. The image promises to be studied by in- telligence agencies and scholars against previous occasional “class photos” of the Pyongyang elite for clues about who is up and who is down in the secretive regime. Mr. Ri’s proximity to the two Kims in the photo, in addition to his new titles, signals that he has likely been chosen to guide the military in a transition of power to the younger Kim if Kim Jong Il dies or becomes incapacitated, analysts said Friday. “He was supportive of the idea to promote the son and will be instru- mental in securing his position,” said Leonid Petrov, a Korea special- ist at the University of Sydney in Australia. Mr. Kim appointed both his son and Mr. Ri as vice chairmen of the party’s Central Military Commission. Mr. Ri got an even bigger promo- tion—to vice marshal of the military, the country’s third—that merited its own announcement. By contrast, the much-scrutinized statement naming Kim Jong Eun and the leader’s sister, Kim Kyong Hui, as four-star generals was part of a longer series of ap- pointments. Mr. Ri became chief of the gen- eral staff last year after six years as chief of the Pyongyang defense com- mand, considered one of the mili- tary