The Wall Street Journal Asia華爾街日報亞洲版.2012.06.11

VOL. XXXVI NO. 198 MONDAY, JUNE 11, 2012 OPINION: Can Delhi Be The ‘Linchpin’ In U.S. Pivot? Page 13 Sea Tensions Deepen With China’s Rise IN DEPTH Pages 16-17 As of 4 p.m. ET DJIA 12554.20 À 0.75% FTSE 100 5435.08 g 0.23% Nikkei 225 8459.26 g 2.09% Shanghai Comp. 2281.45 g 0.51% Hang Seng 18502.34 g 0.94% Sensex 16718.87 À 0.42% S&P/ASX 200 4063.70 g 1.09% asia.WSJ.com (India facsimile Vol. 4 No. 2) Australia:A$6.00(InclGST),Brunei:B$7.00,China:RM B25.00,Hong Kong:HK$20.00(InclM acau),India:Rs30.00,Indonesia:Rp18,000(InclPPN),Japan:Yen500(InclJCT),Korea:W on2,500, M alaysia:RM 7.00,Pakistan:Rs140.00,Philippines:Peso80.00,Singapore:S$4.50(InclGST),SriLanka:Slrs180(InclVAT),Taiw an:NT$60.00,Thailand:Baht50.00,Vietnam :US$2.50 KDN PP 9315/10/2012 (031275) M ICA (P) NO.030/10/2011 SK.M ENPEN R.I.NO:01/SK/M ENPEN/SCJJ/1998 TGL.4 SEPT 1998 DataShow Strength InChina’s Economy BEIJING—China’s exports and imports both rose sharply in May, while inflation slowed substantially, hopeful signs for the world’s second-largest economy. A raft of data released over the weekend by the Chinese government present a mixed picture, but overall suggest an economy stronger than many market players feared at the end of last week. A surprise- interest rate cut by the central bank Thursday prompted speculation that the monthly data for May would be espe- cially weak. Instead they showed that industrial-production growth ticked up slightly, albeit from an April pace that was the slowest in nearly three years, and that auto sales and prop- erty investment were stron- ger—signs of life for the Chi- nese economy, despite the sovereign debt crisis in Eu- rope and a sluggish recovery in the U.S. The data indicate that measures taken by the Chi- Please turn to page 20 BY AARON BACK As the global economy weakens and the dollar gains strength, U.S. companies are finding it harder to sell their goods abroad. U.S. News................10 Japan is looking to penalize a foreign firm for insider trading. Markets...................29 Inside Spain Faces Bigger Issue Than Banks Spain’s acquiescence to a bailout of as much as €100 bil- lion ($125 billion) for its banks is a prelude to a much bigger question: Will Spain need a bailout for itself? Many in financial markets say it ultimately will, and that Spain faces a daunting strug- gle to persuade reluctant creditors that the country is a viable loan target. For Europe, that remains the vital issue. A full bailout of Spain—the euro zone’s fourth-largest economy— would be a dramatic and cata- clysmic event. Spain’s econ- omy is larger than Greece’s, Portugal’s and Ireland’s com- bined, and finding the funds for a rescue would greatly strain the euro zone’s bailout vehicles. Still, the combination of Spain’s requesting financial aid for its banks and China’s reporting economic figures that were less alarming than many had feared may reassure investors in Asia when mar- kets reopen Monday, several analysts said. “The market has been waiting for Spain to ask for help for some time now,” said Wee-Khoon Chong, Asia rates strategist at Société Générale in Hong Kong. “By asking for help, it should at least stop the issue spreading to other countries.” The Japanese government also welcomed Spain’s deci- sion. “With the scheme in place, I believe this will greatly con- tribute to stabilization,” Fi- nance Minister Jun Azumi said. “I think this is a signifi- cant first step.” The question of whether Please turn to page 20 By Charles Forelle in London and Gabriele Steinhauser in Brussels Myanmar Violence Spurs Web Protests, Crackdown YANGON, Myanmar—An outbreak of sectarian violence in western Myanmar is help- ing nudge this once-reclusive country further into the Inter- net age as people take to the Web to condemn the clashes and help organize street pro- tests of their own, creating a new set of challenges for the country’s military-backed gov- ernment. President Thein Sein de- clared a state of emergency in Rakhine state near Bangladesh in a televised address Sunday, effectively enabling military control of the area after un- rest claimed at least 17 lives in recent days, according to state media. The clashes intensified Fri- day, with state-run television reporting that security forces in the Muslim town of Maungdaw opened fire on ri- oters, who had burned more than 400 homes and killed at least seven Buddhists earlier in the day. It was a sharp escalation of long-standing tension be- tween local Buddhists and ethnic-Rohingya Muslims, who trace their origins back to neighboring Bangladesh, while Mr. Thein Sein’s move to de- clare a state of emergency is potentially a setback to his continuing efforts to open up the country’s political system. “I would like to call upon the people, political parties, religious leaders and the me- dia to join hands with the gov- ernment with a sense of duty, to help restore peace and sta- bility and to prevent further escalation of violence,” Mr. Thein Sein said Sunday. The crisis began with the rape and killing of a young Buddhist girl last month. Printed pamphlets then began appearing around the city of Sittwe blaming Muslims for the attack. Then, on June 3, a Buddhist mob pulled from a bus a group of Muslims re- turning from a religious gath- ering and killed 10, setting off a flurry of other attacks. Three Muslim men were later Please turn to page 20 BY JAMES HOOKWAY Manny Pacquiao, right, lost for the first time in seven years as Timothy Bradley won a majority decision in Las Vegas that left observers howling. A rematch is likely in November, but the loss jeopardizes yet again a long-awaited match between Pacquiao and Floyd Mayweather. Page 18 Pacquiao Loses in Controversial Split Decision Agence France-Presse/Getty Images dingbat Myanmar seeks to privatize, cautiously....................................... 4 dingbat Greek parties cite Spain to push cases..................................... 3 dingbat French bond yields a tale of two cities....................................... 8 “How can any global CEO succeed today without Salesforce?” Carl Camden President and CEO, Kelly Services + Kelly Services = 2012 salesforce.com, inc. All rights reserved. Salesforce, Social Enterprise, the SalesforceCorporateCloudand "NoSoftware" logos, andothers are trademarks of salesforce.com, inc.Othermarks used are theproperty of their respective owners. salesforce.com/like weibo.com/pdfmagsweibo.com/pdfmags user 打字机 2 | Monday, June 11, 2012 * * THEWALL STREET JOURNAL. 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 3700 1925; 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. Home Once Owned by Versace Lists for $125 Million 2. ‘Private Sector’ Comment Becomes a Public Gaffe 3. Spain’s €100 Billion Gamble 4. Opinion: President on Growth Most Emailed in Asia 1. Opinion: Steven Malanga: State Politicians and the Public Pension Cookie Jar 2. Opinion: Noonan: What’s Changed After Wisconsin 3. Opinion: President on Growth 4. Vouchers Aid Comeback for Catholic Schools China Real Time wsj.com/chinarealtime Shanghai Sharks’ basketball games in the Philippines are called off as nations bicker. Heard on the Runway wsj.com/runway ‘A beautiful pair of shoes. Definitely a tailored suit. Well- fitted shirts…in the sleeve and collar. ’ ‘Mad Men’ costume designer Janie Bryant about staples every man should have in his wardrobe Japan Real Time wsj.com/japanrealtime Researchers developed goggles that can dupe your body into thinking you are full by making portions appear bigger. i i i Business & Finance n Vietnam is cutting interest rates for the fourth time this year as policy makers try to revive slowing economic growth. 4 nMyanmar wants to privatize its state-owned enterprises to cre- ate jobs, but it said some control mechanisms may be needed to protect local residents. 4 n China’s central bank named former Agricultural Bank of China executive Pan Gongsheng as one of its deputy governors. 5 n China Airlines and ANA dis- closed plans to expand their inter- national services, as the carriers contend with low-cost competitors and a weak economy. 23 n Singapore will bar more citi- zens and permanent residents from casinos in the city-state as part of efforts to contain the so- cial impact of casino gambling. 5 n Australia’s trade deficit nar- rowed in April, as exports grew. 6 n Olympus will reduce its global workforce by about 7% over two years and streamline operations to bolster its finances. 23 n Apple is planning a new way for mobile app developers to track users in the company’s latest at- tempt to balance developers’ ap- petite for targeting data with con- sumers’ unease over how that information is used. 24 n Kraft Foods will switch its list- ing to Nasdaq from the New York Stock Exchange, a coup for Nasdaq after the Facebook debacle. 29 n UBS blames Nasdaq for up to $350 million in losses it had dur- ing Facebook’s debut and is weigh- ing legal options. 28 n Kodak’s effort to build interest in the sale of its digital patent portfolio is flagging. 22 i i i World-Wide n Japan’s prime minister ap- peared to move closer to clearing the final local hurdles to restarting two idled nuclear reactors in areas facing electricity shortfalls. 4 n A Kurdish dissident is the new leader of the main opposition group outside Syria, an attempt to forge a broader coalition against the regime of President Assad. 3 n A former adviser to the defunct Bangkok Bank of Commerce, Rakesh Saxena, was sentenced to 10 years in prison and fined for embezzlement that helped spark the 1997 financial crisis. n The French Open final between Rafael Nadal and Novak Djokovic was suspended because of rain and is scheduled to resume Mon- day. Nadal leads two sets to one. France’s defense minister was heading to Afghanistan after four French troops were killed in an attack Saturday in Kapisa province in the eastern part of the country. Above, Afghan boys interacted with a U.S. Army soldier in the Kandahar province in southern Afghanistan on Sunday. Re ut er s Inside Asia News: Beijing finds a path to liberalizing rates. 5 Europe News: Greek city sees austerity as a lot of garbage. 7 Business & Finance: Big U.S. banks brace for downgrades. 21 Managing in Asia: First lesson in investing: diversify. 36 What’s News— weibo.com/pdfmagsweibo.com/pdfmags THEWALL STREET JOURNAL. Monday, June 11, 2012 | 3 WORLD NEWS Kurdish Dissident to Lead Syria Group The main opposition group out- side Syria chose a Kurdish dissident as its new leader, an attempt to forge a broader coalition against the regime of President Bashar al-Assad. The Syrian National Council’s choice of Abdulbaset Sieda, a 56- year-old activist who has been living in Sweden for more than a decade, comes as Western supporters of the opposition have been pressuring the SNC to present a more unified front against the regime. The group’s divisions and inter- nal squabbles have long been cited as one of the reasons it hasn’t re- ceived stronger backing, more money and even arms from the growing list of countries that are opposed to the regime. Differences between the Sunni- Muslim-dominated SNC, where rep- resentatives of the Muslim Brother- hood hold significant sway, and representatives of Syria’s minority groups and religious sects have been a long running theme of the opposition. Minority groups worry that they could suffer under a Sunni-Muslim- dominated government that might follow Mr. Assad’s regime. The re- gime is led by the Alawite sect, which makes up just over 10% of Syria’s population, and has touted itself as a protector of other minori- ties in the face of a Sunni-Muslim majority in the country. The regime has been able to ef- fectively use fears of Sunni domina- tion to rally support among minori- ties—including Kurds, Christians, Druze and Alawites—or at least keep those groups from wholeheart- edly joining the rebellion. The Kurds are an especially large and important minority in Syria. They have long been treated as sec- ond-class citizens in the country. The regime has denied many citi- zenship. But President Assad offered citi- zenship and other benefits to Kurds in the wake of the uprising. And while few Kurds have become ar- dent backers of the regime, the group has remained divided and Kurds haven’t joined the rebellion in the large numbers opponents of the regime had hoped for. The Syrian National Council’s election of Mr. Sieda as its leader on Saturday was an apparent appeal to Syrian minorities. Mr. Sieda, an aca- demic, was the only contender for the post, which he will hold for three months before another elec- tion will be held. Burhan Ghalioun, a secular Sunni academic based in Paris, resigned three weeks ago over criticisms that the council wasn’t working transparently and had grown out of touch with the protest movement inside Syria. The SNC was born out of a power-sharing agreement between Syria’s most powerful exiled opposi- tion faction, the Syrian Muslim Brotherhood, and secular groups, grass-roots activists, and indepen- dent opposition leaders from reli- gious or ethnic minorities like Mr. Sieda. For months, protesters have crit- icized the group’s leaders—who have mostly lived in exile for many years—for neglecting basic requests from inside Syria for funds, aid and arms as they jockeyed for political positions. Western states trying to shape the council into a transitional body have stressed the need to make it more inclusive to a broader range of Syrians. But activists were quick to point out that Mr. Sieda shares many of the weaknesses that eventually dis- credited Mr. Ghalioun’s leadership, which was seen as a superficial front to a council dominated by real heavyweight political players includ- ing the Brotherhood. Mr. Sieda—who is Sunni Muslim as well as ethnic Kurdish—has been based in Sweden for much of the two decades he has lived outside Syria. He isn’t a particularly influen- tial leader within the Kurdish com- munity, and is seen mostly as the only candidate the divided SNC could agree on. A push behind a Christian candidate failed largely due to objections from Islamists on the council. Still, Mr. Sieda was quick to signal upon his election that he would focus on broadening the council to include more minori- ties and on an internal restructuring to make it a more efficient, account- able body. In his first comments at a news conference in Istanbul, Mr. Sieda pledged to work on restructuring the SNC to make it more inclusive and to reach out to other groups within the opposition, according to the Associated Press. “We are now in the process of repairing the rela- tionship between the SNC and the forces working inside Syria so that we may reach common grounds be- tween us,” he said, the AP said. Meanwhile, Syrian government forces pounded parts of central Homs province Sunday in a renewed push to regain control of rebel-held territories, and activists said at least 38 people were killed by shell- ing there over the past 24 hours, AP said. The government assault focused on the town of Qusair, near the bor- der with Lebanon, where activists reported at least six people died on Sunday, AP said. Three others were killed in shelling of the town of Tal- biseh, north of the city of Homs, ac- cording to the Britain-based activist group Syrian Observatory for Hu- man Rights, AP said. Regime forces also sent reinforcements to a moun- tainous area near the coastal city of Latakia, where hundreds of rebels have set up a base, according to AP. By Bill Spindle, Nour Malas and Sam Dagher The Syrian National Council’s newly elected president, Abdulbaset Sieda, speaks during a news conference in Istanbul on Sunday. Eu ro pe an Pr es sp ho to A ge nc y Greek Parties Cite Spain to Push Cases Greece’s two main party leaders used the Spanish bank bailout deal Sunday to support their opposing messages to the Greek electorate ahead of next week’s national vote. New Democracy leader Antonis Samaras said the deal showed how important it is for the country to re- main inside the European Union, ne- gotiate with its partners over the country’s problems and not isolate itself, while the radical leftist Syriza party said it showed that the only prosperous route for Greece is to re- ject the terms of the country’s own massive bailouts. Spain said Saturday it would ask Europe for a loan in order to clean up its banking industry, becoming the fourth euro-zone country to re- quest an EU bailout after Greece, Portugal and Ireland. Spanish Fi- nance Minister Luis de Guindos said the EU will grant Spain a loan of as much as €100 billion ($125 billion) that the government will funnel to banks that need capital. European governments had put intense pressure on Spain to agree to a support package for banks that have suffered in a real-estate crash ahead of the Greek elections June 17, which they fear could send a new wave of turmoil through the region’s financial markets. The conservative New Democ- racy party is pledging to stick by terms of the Greek bailouts, mean- ing harsh austerity measures, while the Syriza party, which emerged as a political force during last month’s inconclusive elections, wants to re- negotiate the terms. The election this month is being viewed as a de facto referendum on Greece’s future inside the euro zone, pitting the Syriza party against New Democracy and Pasok, which together support the reform program Greece has pledged to its euro-zone partners and the International Monetary Fund. “While a country like Spain ne- gotiates, there are some people here who argue that we must break things with Europe and isolate Greece,” Mr. Samaras said while campaigning in southern Greece. “But fortunately, apart from the path of irresponsibility, there is the road of responsibility.” Responding in a statement, Syriza said that “the conclusion that is drawn from the developments in Spain is the complete opposite from what Mr. Samaras perceives.” “The only route of dignity and prosperity for the European people is to reject the policies of austerity and recession and not that of ac- cepting as whole the memorandum commitments, as Mr. Samaras does,” the statement said. Syriza leader Alexis Tsipras told the Avgi newspaper that events in Spain justify its party’s position. “Namely, that the crisis is a pan- European problem and that the way it has been dealt with until now has been completely ineffective and so- cially disastrous,” he said. Pasok Leader Evangelos Venizelos said that “what happened in Spain has great impact on Greece....It shows that a safety net for the euro zone is being prepared.” BY NEKTARIA STAMOULI weibo.com/pdfmagsweibo.com/pdfmags 4 | Monday, June 11, 2012 THEWALL STREET JOURNAL. WORLD NEWS: ASIA Noda Aims to Restart Reactors Fukui Prefecture Governor Shows Support; Safety Measures Largely Satisfy Advisory Panel TOKYO—With a clear statement saying that Japan needs nuclear power, Japanese Prime Minister Yoshihiko Nod