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OPINION:
Royal engagement fashion Printing yen
is futile, Japan
LIFE & STYLE Page 9 discovers–again
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VO L . X X X V N O. 70 * * Tuesday, December 7, 2010
ASIA
(India facsimile Vol. 2 No. 131)
asia.WSJ.com
Obama, Hu
Sarkozy furthers Areva’s nuclear-power ambitions in India
MICA (P) NO. 164/10/2010
aim to calm
SK. MENPEN R.I. NO: 01/SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998
Korea crisis
BY JEREMY PAGE China.
AND EVAN RAMSTAD U.S. Secretary of State Hil-
lary Clinton also hosted a
U.S. President Barack meeting with the Foreign
Obama and China’s President, Ministers of South Korea and
Hu Jintao spoke for the first Japan in Washington Monday
time about the continuing cri- after rejecting a Chinese pro-
sis on the Korean peninsula, posal for broader talks, in-
with the Chinese leader call- cluding China, Russia and
ing for calm and his U.S. North Korea, in Beijing.
counterpart urging Beijing to By scheduling the conver-
rein in its neighbor and ally. sation between Messrs.
Messrs. Obama and Hu Obama and Hu for the day be-
spoke by telephone Sunday fore Monday’s talks, both
night in their first direct com- sides appeared to be trying to
munication since North Korea prevent the crisis from esca-
revealed significant progress lating further into a standoff
in its uranium-enrichment between China and North Ko-
program and then shelled a rea on one side, and the U.S.
South Korean island, killing and its Asian allies on the
four people, on Nov. 23. other.
Associated Press
The U.S. responded to the It gave President Obama a
artillery raid by sending an chance to be seen putting
aircraft carrier to take part in pressure on China, while also
joint military exercises with reassuring Beijing that it re-
French President Nicolas Sarkozy, left, and Indian Prime Minister Manmohan Singh said they signed a ‘framework agreement’ that South Korea in the Yellow Sea mains a dialogue partner for
paves the way for France’s Areva to sell billions of dollars of nuclear reactors in India’s Maharashtra state. The countries also signed last week, prompting protests the U.S. in the crisis.
pacts on space research and film production. Page 3 from both North Korea and Please turn to page 18
China clones and sells Russian fighter jets Boss Talk
BY JEREMY PAGE Su-27 fighter jet—with im- they are fitting it with the last city of Zhuhai. Russia used to The star guests were the
ported Russian parts. piece in the technological puz- be the star of this show, wow- “Sherdils,” a Pakistani aero-
ZHUHAI, China—A year af- Today, Russia’s military zle, a Chinese jet engine. ing visitors with its “Russian batic team flying fighter jets
ter the collapse of the Soviet bonanza is over, and China’s is In the past two years, Bei- Knights” aerobatic team, that are Russian in origin but
Union, a cash-strapped Krem- just beginning. jing hasn’t placed a major or- showing off fighters, helicop- are now being produced by
lin began selling China a After decades of importing der from Moscow. ters and cargo planes, and Pakistan and China.
chunk of its vast military ar- and reverse-engineering Rus- Now, China is starting to sealing multibillion dollar “We used to be the senior
senal, including the pride of sian arms, China has reached export much of this weaponry, deals on the sidelines. partner in this relation-
the Russian air force, the Suk- a tipping point: It now can undercutting Russia in the de- This year, it didn’t bring a ship—now we’re the junior
hoi-27 fighter jet. produce many of its own ad- veloping world, and poten- single real aircraft—only a one,” said Ruslan Pukhov, of
For the next 15 years, Rus- vanced weapons—including tially altering the military bal- handful of plastic miniatures, the Russian Defense Minis-
Nippon Steel Chairman Akio
sia was China’s biggest arms high-tech fighter jets like the ance in several of the world’s tended by a few dozen bored try’s Public Advisory Council,
Mimura battles the strong
supplier, providing $20 billion Su-27—and is on the verge of flash points. sales staff. China, by contrast, a civilian advisory body to the
yen and increased
to $30 billion of fighters, de- building an aircraft carrier. This epochal turnaround laid on its biggest commercial military.
competition while working to
stroyers, submarines, tanks Not only have Chinese en- was palpable in the Russian display of military technol- Russia’s predicament mir-
capitalize on rising demand
and missiles. It even sold Bei- gineers cloned the prized pavilion at November’s Air- ogy—almost all based on Rus- rors that of many foreign
in China. Page 20
jing a license to make the Su-27’s avionics and radar, but show China in the southern sian know-how. Please turn to page 16
Computing. It’s not only
for computers anymore.
Beyond the PC: Intel® processors are bringing intelligence
and connectivity to billions of devices — in places you’d
never expect. Learn more at intel.com/inside.
Copyright 2010, Intel Corporation. Intel, the Intel logo, Intel Sponsors of Tomorrow™ and Intel Sponsors of Tomorrow logos are trademarks of Intel Corporation in the U.S. and other countries.
©

2. 2 * * THE WALL STREET JOURNAL. Tuesday, December 7, 2010
PAGE TWO
What’s News— Inside
i i i
Business & Finance
n French President Sarkozy said
he signed agreements advancing
his government’s plans to sell nu-
clear reactors worth billions of
dollars to India. The two countries
signed seven pacts, including
agreements on space research and
film production. 3
n Changsha Zoomlion, a machin-
ery maker, plans to raise as much
as $2.13 billion in a Hong Kong
stock offering as signs of caution
Asia Deal Journal:
emerge among investors. 27 Australian taxes don’t
n Japanese food and drug maker
deter private equity. 19
Otsuka set a premarket price for
an IPO that could raise as much as
$2.4 billion. 27
n Google is launching Google
eBooks, its long-anticipated digital
bookselling enterprise. 21
n Euro-zone leaders will consider
boosting their emergency lending
facility for struggling member
countries this week, even though
Germany remains staunchly op-
posed to the idea. 5
n Shinhan Financial’s president, Business & Finance:
Shin Sang-hoon, stepped down as
Rio Tinto pursues
Reuters
the firm looks to regroup after a
period of management turmoil. 22 Riversdale Mining. 19
Iran and six world powers held their first talks in more than a year Monday, which officials said focused mostly on
n Ericsson said its chairman Tehran’s need to defuse fears about its nuclear programs. Delegates from Iran, the EU, U.S., Russia, Britain, France and
plans to resign within the next Germany met in Geneva. Above, Iran’s chief negotiator Saeed Jalili, center, arrives at the conference center. Page 6
two years. The Swedish telecom-
equipment vendor also was cho- pledged his confidence he could n Pfizer’s chief retired unexpect- civilians join public service, a top
sen to supply gear to Sprint. 22 prevent runaway inflation. 12 edly after 4½ years of leading the coalition commander said. 6
drug maker, citing fatigue from
n Australia’s Fairfax Media will n New doubts arose about the the job’s demands. 22 n The Afghan government eased
conduct a search for a new chief sale of a controlling stake in restrictions on private-security
executive after the surprise depar- Hyundai Engineering when sellers i i i firms, stepping back from a com-
ture of Brian McCarthy. 23 said documentation submitted by World-Wide plete ban announced in August.
Hyundai Group on a loan for fi-
n Prime Minister Kan reiterated nancing the bid is inadequate. 21 n A leaked diplomatic cable n Two suicide bombers disguised
his policy plan for Japan, vowing shows Chinese Vice Premier Li as policemen killed 50 people in
to deliver a spending cap and n Samsung lowered its flat-panel Keqiang as saying in 2007, while an attack targeting a tribal meet-
form a coalition as opposition factory utilization rate due to in a different post, that much of ing in northwest Pakistan.
mounts to his leadership. 4 weak demand and to help ease a China’s provincial economic data Media Business: Ad
global supply glut. 24 are unreliable. 4 n Youths clashed with police in
n The DJIA wobbled as investors Athens, leaving one bystander in-
recovery is forecast to
parsed comments from Bernanke n U.S. officials charged over 500 n The prosecutor of the Interna- jured as thousands marched to continue in 2011. 25
that the U.S. recovery may not be people in what they termed the tional Criminal Court said he commemorate the killing of a 16-
self-sustaining, while gold looked largest-ever crackdown on scams opened a preliminary probe into year-old by police two years ago.
set to settle at a record. Most ranging from Ponzi schemes to possible war crimes by North Ko-
Asian markets ended higher. 29 pump-and-dump operations. 33 rea resulting from its recent n A French court found Conti-
clashes with South Korea. WSJ.com nental Airlines and one of its me-
n Fed chief Bernanke again de- n The euro fell as worry contin- chanics guilty of criminal wrong-
fended the U.S. central bank’s ued about the outlook for fiscally n The measure of success in the doing in the crash of a Concorde
bond-buying program and weaker euro-zone members. 29 Afghan war will be whether more jet outside Paris a decade ago.
ONLINE TODAY
Most read in Asia Scene Asia
blogs.wsj.com/scene
In 2009, China ‘Wish Dream,’ a Heard on the Street:
became the world’s painting by Arpita
Honda revises its
strategy in India. 34
largest importer of Singh, is set to sell
Brazilian goods and is 1. China’s Web Takes on Luxury
for about $2 million THE WALL STREET JOURNAL ASIA
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3. Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 3
WORLD NEWS
France and India sign nuclear pacts
BY AMOL SHARMA “France has made a strategic tors is estimated at €7 billion ($9.4 practice in most countries with nu-
Powering India choice to believe in India—to believe billion). The agreements announced clear energy.
NEW DELHI—French President in India’s future,” Mr. Sarkozy said Monday set contractual conditions India has said it may be able to
India wants to increase its nuclear
Nicolas Sarkozy said he signed at a joint news conference Monday and break down roles and responsi- assuage U.S. concerns through regu-
electricity generation 14-fold by
agreements Monday advancing his with Indian Prime Minister Manmo- bilities of the parties, Areva said in lations, but has said changing the li-
2032.
government’s plans to sell billions of han Singh. The official meetings be- a statement. Next steps include ability law will be too difficult. Rus-
dollars of nuclear reactors to India, Current electricity sources: tween the leaders followed weekend studies to enable excavation at the sia already is building nuclear
moves that come as the U.S. is Other Nuclear
sightseeing by the French president Maharashtra site and approvals plants in southern India.
struggling to make progress in en- renewables 2.9% Oil and his wife, singer Carla Bruni, in- from India’s nuclear-safety author-
tering India’s lucrative nuclear-en- 7.7% 0.9% cluding a visit to the Taj Mahal in ity, the company said.
ergy market. Gas Agra. Mr. Singh said the French proj- France and India said they
France and India said they 11% Mr. Sarkozy, who will travel to ect, which will ultimately produce
signed a “framework agreement” Total: the financial capital of Mumbai on 10,000 megawatts of power, will signed a ‘framework
that paves the way for French state- 167 Tuesday to wrap up his visit, said “greatly increase the share of non-
owned nuclear company Areva SA
gigawatts
that the nuclear agreements are polluting nuclear energy in electric-
agreement’ that paves the
to sell two reactors for a project in Hydro Coal “very favorable to French nuclear ity supply to our country.” way for French state-owned
India’s western state of Maharash- 25% 53% industry” and that he expects “no In contrast to Mr. Sarkozy, Mr.
tra, along with nuclear fuel for 25 hidden surprises” as final negotia- Obama wasn’t able to make any an-
nuclear company Areva SA to
years. Pricing has yet to be final- Note: Does not equal 100% due to rounding
Source: Ministry of Power, India
tions move forward. nouncements of progress with India sell two reactors .
ized, and the countries still have to France intends to supply a total on nuclear-energy deals during his
sort through various technical is- of six nuclear reactors to India in visit. While the U.S. led the interna-
sues before completing the deal. Mr. Sarkozy’s four-day visit to coming years. India wants to de- tional effort to dismantle restric- Mr. Sarkozy reiterated his sup-
The nuclear agreements were India, which follows a trip by U.S. velop nuclear electricity as a cleaner tions on nuclear trade with India port for India’s bid for a permanent
among seven pacts France and India President Barack Obama last month alternative to coal-fired power to beginning in 2005, American nu- seat on the U.N. Security Council,
signed, including those on space re- and comes ahead of an expected help meet the energy-hungry coun- clear concerns are wary of selling saying that today India is “not in its
search and film production. Mr. visit by Chinese premier Wen Jia- try’s needs. India has about 4,560 technology to India because of an rightful place in world governance”
Sarkozy also lobbied for France to bao, was meant to strengthen stra- megawatts of nuclear power now, Indian law that exposes plant sup- and that a stronger Indian voice in
win a contract for an estimated $11 tegic ties between the nations while but wants to expand that roughly pliers to liability. global affairs is important for the
billion of fighter jets, a deal for making a case for French companies 14-fold by 2032. The U.S. companies want India to “equilibrium of the whole world.”
which companies from the U.S. and in one of the world’s fastest-grow- Local media reported that the change the law and channel all lia- —Geraldine Amiel in Paris
other countries are also vying. ing economies. value of the first two French reac- bility to plant operators, a standard contributed to this article.
ENJOY RESPONSIBLY
T h e u lt i m at e c o g n a c d e s t i n at i o n
Richard Hennessy is the achievement of a unique blending of exceptional eaux-de-vie,
the oldest of these are extremely rare and date back to the early 19th century.
Each carafe is numbered and made of pure hand-blown crystal.

4. 4 THE WALL STREET JOURNAL. Tuesday, December 7, 2010
WORLD NEWS: ASIA
California pollution:
made in China?
Scientists have long known “It not only marks a milestone
that pollution and dust from in the construction of the Beijing-
China travels over the Pacific to Shanghai high-speed railway, but
the Western United States. also is a major achievement of
In a paper published in the China’s technology innovation,”
latest issue of the scholarly Wang Yongping, spokesman of the
journal Environmental Science and Ministry of Railways, was quoted
Technology and picked up by by Xinhua as saying.
Chemical & Engineering News, a Foreign high-speed train
team of geochemists announced producers who taught China how
that they have developed a to make bullet trains disagree.
method for tracing fine airborne Many executives at those
particulate pollution (also known companies shy away from
as PM2.5 because the particles are commenting on China’s high-
less than 2.5 microns wide) with speed technology out of fear of
origins in East Asia by testing for offending the country’s
a specific lead isotope, 208Pb, government, but a few who are
Imaginechina/Zuma Press
found in greater concentrations in willing to talk say the
A construction site in Liaoning province, where Vice Premier Li Keqiang was Communist Party secretary in 2007. the region’s coal and metal ores. fundamental technology behind
Chinese data ‘man-made’
Led by University of California, those trains remains more or less
Berkeley, identical to the
postdoctoral technology
researcher foreign
Stephanie Ewing, companies
the research provided
Leaked cable shows now-vice premier calling local data unreliable team tested its
filtering method
originally half a
decade ago.
on samples from “What China
BY ANDREW BATSON dinner in Beijing with then-U.S. Am- reers often depend on how well the the San has is the same
bassador Clark Randt on March 12, economy in their jurisdiction is per- Francisco Bay trains with
BEIJING—A senior Chinese offi- 2007. His remarks focused on the forming, there is an incentive for Area, curious to see how much of beefed-up propulsion and other
cial said in 2007 that much of the challenges of administering the them to report positive figures. Northern California’s pollution tweaked systems” to achieve
country’s local economic data are province of Liaoning, which because Many private-sector analysts came from East Asia. faster speeds, an official from one
unreliable, according to a leaked of its legacy of failed state-owned also closely track the indicators re- From December 2007 through foreign high-speed rail company
diplomatic cable published by the enterprises was burdened with a portedly favored by Mr. Li, which May 2008, the Chemical & says. —Norihiko Shirouzu
WikiLeaks website. large number of unemployed work- are thought to reflect real activity Engineering News says, Ms. Ewing
The official, Vice Premier Li Ke- ers. and be less subject to political influ- and team collected samples, then Ex-U.S. trade representative
qiang, was at the time Communist “When evaluating Liaoning’s ence. used mass spectrometry to filter not so diplomatic about China
Party secretary of the northeastern economy, he focuses on three fig- The nationwide gross domestic out the particulate pollution and Now that Susan Schwab, who
province of Liaoning. Since landing ures: 1) electricity consumption, product figures published by the Na- measure the amounts of different was U.S. trade representative
his current position, he has over- which was up 10% in Liaoning last tional Bureau of Statistics aren’t di- lead isotopes. After analyzing under President George W. Bush,
seen many of the central govern- year; 2) volume of rail cargo, which rectly based on the provincial GDP data, the researchers found the has left public life, she is free to
ment’s efforts to improve the qual- is fairly accurate because fees are figures and attempt to correct for median proportion of Asian lead talk freely about the state of trade
ity of its economic statistics, which charged for each unit of weight; and some of their biases. Indeed, almost in the samples was 29%. relations with China.
continue to face many questions 3) amount of loans disbursed, which all of China’s provinces consistently The question now is how much “Foreign firms are in fact
over their accuracy and consistency. also tends to be accurate given the report GDP growth rates above the of that can be attributed to San discriminated against in this
Mr. Li is considered the top con- interest fees charged,” the cable national average. Francisco’s penchant for China- market,” Ms. Schwab, now a
tender to take over as premier, the says. The NBS, while defending the na- made iPhones and iPads? professor at the University of
top economic policy-making posi- “By looking at these three fig- tionwide figures it produces as fun- —Josh Chin Maryland, said at a panel
tion, when the current head of gov- ures, Li said he can measure with damentally accurate, has sought discussion in Beijing.
ernment, Wen Jiabao, steps down in relative accuracy the speed of eco- more influence over the numbers Chinese train breaks Ms. Schwab referred to her
early 2013. The reported comments nomic growth. All other figures, es- compiled by local authorities. speed record, again own experience negotiating deals
provide intriguing context for his pecially GDP statistics, are ‘for ref- In his public comments about A Chinese high-speed train set in China for Motorola in the early
current role, which among other erence only,’ he said smiling,” the economic statistics, Mr. Li also has another world speed record 1990s. She did note that China’s
tasks include overseeing the ongo- cable reads. “GDP figures are ‘man- repeatedly stressed the importance during a test run Friday, breaking government recently launched a
ing nationwide population census. made’ and therefore unreliable,” the of gathering accurate information. its own record set just two new drive to address one of
China’s Foreign Ministry has said cable paraphrases Mr. Li as saying. “Data live and die by its quality,” months ago. The Chinese Ministry foreign companies’ main problems
it will not comment on the content Analysts have long questioned he said at a government meeting in of Railways calls the feat a “major in China: violation of intellectual-
of the diplomatic cables published the reliability of economic figures early 2009, urging accuracy in a achievement of China’s technology property rights in the form of
by WikiLeaks. The leaked cable re- produced by local governments in count of the nation’s businesses and innovation,” but doubts linger things like pirated software and
ports comments Mr. Li made in a China. Because local officials’ ca- their economic activities. over just how much of China’s knockoff handbags. But she
bullet-train technology can be pointed out similar government
described as its own. campaigns in past years haven’t
Japan’s Kan sticks by his plan
This record was accomplished resolved the problem.
during the test run for a train The disenchantment of big
called the CRH380A. According to corporations with China could
a report by state-run Xinhua news have consequences for how the
agency, the train hit a top speed political debate over trade evolves
BY TAKASHI MOCHIZUKI make a promised cut in Japan’s 40% censure motions on the two offi- of 486.1 kilometers per hour in the U.S., Ms. Schwab said.
corporate tax rate without breach- cials. The moves have no practical between Zaozhuang City of —Andrew Batson
TOKYO—Japanese Prime Minis- ing the debt limit. effect, but the actions represent the Shandong Province and Bengbu
ter Naoto Kan signaled Monday that The government hopes to finish strongest message yet of disap- City in eastern Anhui Province, Keep up on China minute by
he won’t give in to pressure from compiling the budget by the end of proval over the government. part of a new high-speed rail line minute with The Wall Street
his political opponents to change his December, and plans to propose it At a press conference Monday, that will eventually link Beijing Journal’s China Real Time Report
policies or members of his cabinet. when the Diet reconvenes in Janu- Mr. Kan said: “It’s not a matter of and Shanghai. at blogs.wsj.com/chinarealtime
Mr. Kan also vowed to deliver on ary. But lacking a majority in the cabinet reshuffling” and Mr. “Sen-
the government’s promise to cap upper house of parliament, Mr. Kan goku does not need to resign” be-
main spending at 71 trillion yen needs support from an increasingly cause of the no-confidence motion.
($858 billion) and new borrowing at hostile opposition to get the budget Instead, he said he will push to
44.3 trillion yen in the budget for passed. With public support now build a “firm structure” that enables
the next fiscal year starting April. around 20%, that outlook is dim. the government to carry out its pol-
Mr. Kan’s remarks indicate his Instead it has launched a strong icies. To achieve that goal, Mr. Kan
determination not to follow the path attack against top officials in the is hoping to strengthen its ties with
of the previous four premiers, none government. The main opposition smaller parties, including the ex-co-
of whom lasted more than a year as parties are demanding that Mr. Kan alition Social Democratic Party.
their public support fell. fire Chief Cabinet Secretary Yoshito But such a move carries its own
However, opposition parties, in- Sengoku and Land Minister Sumio potential problems. The Social Dem-
cluding the former-coalition Social Mabuchi over their handling of for- ocrats are staunchly opposed to the
Democratic Party, are demanding eign-affairs issues, including Sep- U.S. military presence in Okinawa
tough policy changes in return for tember’s collision between a Japa- and are demanding that a major
cooperation, such as removing a U.S. nese patrol ship and a Chinese base be moved out of Okinawa and
Xinhua/Zumapress
Marine base in Okinawa. At the fishing boat in disputed waters. preferably out of Japan entirely.
same time, some economic issues Only last month, the opposition- —Takashi Nakamichi contributed The railway ministry is expected to limit the speed of these trains to 380 kph.
remain unsolved, including how to controlled upper chamber slapped to this article.