Archive for December, 2009

China’s love affair with luxury

Wednesday, December 30th, 2009

Jane Shi strides into Beijing’s Lane Crawford Seasons Place shopping mall, dashes to one of the up-market shops, snatches a bag, glances at the price tag and drags out her wallet, as if she was in the supermarket.

However, the purchase today is a Balenciaga motorcycle bag going for more than 2,000 U.S. dollars.

The owner of one Balenciaga, two Fendi, a Louis Vuitton, a Gucci, and two Vivian Westwood bags, Shi, 32, simply says, “I need them.”

“It’s not all about the vintage crafted lambskin, the platinum-plated metal, but the feelings and image the luxury bags give me. I feel pampered, and different from common people,” says Shi, a manager in a multinational advertising company, earning an annual income of more than 150,000 U.S. dollars.

Shi is one of a growing army of luxury shoppers in China. The China Brand Association estimates consumers of top-tier brands account for 13 percent of the total population, or 170 million people.

Whether it is yachts, limousines, haute couture fashion or hand-crafted watches, China’s appetite for luxury goods has surged against the global economic downturn.

A report by consulting firm Bain & Company in November showed consumption of luxury goods in China is expected to grow 12 percent in 2009 to reach 9.6 billion U.S. dollars at yearend, compared with a 16-percent slump on the U.S. market, a drop of 10 percent in Japan and 8 percent in Europe.

Earlier this year, China’s consumption reached 8.6 billion U.S. dollars, accounting for 25 percent of the world total, surpassing the United States to become the second largest market for luxury goods, according to the World Luxury Association report.

Goldman Sachs has predicted that China will continue the spending spree and consume about 29 percent of the world’s total luxury goods in 2015, leapfrogging Japan as the world’s biggest luxury buyer.

“China’s consumption has changed from increasing quantity to the upgrading of quality. The consumption of refinement and taste is pursued, which is an important invisible value of luxury goods,” says Prof. Li Fei, director of the Department of Marketing at Tsinghua University.

“Luxury goods are products beyond necessary basic living and development needs. They should have a history of more than 100 years, and be made of rare materials and with delicate craftsmanship.”

More than 300,000 Chinese already have a net worth of more than1 million U.S. dollars. A study by McKinsey in July indicated China will be home to the world’s fourth-largest population of wealthy households by 2015, an estimated 4.4 million.

British carmaker Bentley sells more Mulliner 728 limousines, the world’s most expensive car at 1.2 million U.S. dollars each, in Beijing than in any other city in the world.

A surge in Chinese travelers abroad has facilitated access to Western brands. By 2008, mainland tourists had spent 30.5 billion U.S. dollars for luxury items, thanks to the lower prices and taxes in overseas stores.

The world’s leading luxury brands are expanding their China operations. Some are moving out of smaller stand-alone outlets and hotels to set up megastores to educate consumers about the brand and pump up luxury spending. Many brands are accelerating the opening of new boutiques in China’s second and third tier cities.

Prof. Li suggested that status and self-reward are particularly strong buying motivations for Chinese consumers.

“Luxury in China today is primarily a social statement. The function of luxury counts more for Chinese than the emotional factor,” says Li Fei.

A KPMG survey in 2007 echoes his findings. More than 70 percent of more than 800 respondents saw luxury brands as a way to demonstrate status and success. More than 60 percent bought luxury goods to reward themselves for hard work and success.

Diana Gu, 37, a freelance writer in Shanghai, admits luxury goods have the benefit of recognizability and exclusivity.

“The sparkling diamond ring on your finger sends a message that your husband is rich. Sipping cognac indicates you belong to the elite. The designer watch means you are sophisticated,” says Gu.

Profiling China’s luxury consumers, surveys have shown that the majority are aged between 20 and 40 - considerably younger than those in the U.S and Europe, aged from 40 upwards.

China’s super-wealthy, with incomes of 10 million U.S. dollars or more, are leading the trend to snatch up high-end items.

A JWT (J. Walter Thompson) study in 2007 shows this segment enjoys personalized services and visits luxury shops without concern for prices. To them, luxury buying is a demonstration of power, the reflection of knowledge and an understanding of the finest in all things.

The second group of luxury consumers are the new rich, composed mainly of upper-middle management and white-collar workers making 200,000 to 300,000 U.S. dollars annually.

The JWT study showed they are very often the first generation in their family who can afford luxury products. Their consumption is a reassurance to them that new money does not have to be uncouth.

“Although individually they consume less than the super-rich, they contribute most to the hike in China’s luxury consumption due to the large size of this group,” says Prof. Li.

The JWT report suggested super-wealthy and new rich are most likely to indulge their wives or mistresses, and buy for business gifts. Yet the most brand-savvy consumers are the ‘little emperors’ - the generation of only-children born after 1980.

They have a taste for luxury, and money to spend. They are willing to indulge themselves, supported by six sources of disposable income - parents and grandparents - to meet one child’s every need.

“The design, the delicate patterns, the distinctive hallmarks of a luxury bag give me pleasure. If I cannot become a celebrity overnight, at least I can buy the bag they use”, says 22-year-old Vivian Chen, wearing a pair of Gucci shoes and carrying a Chanel bag.

“I hope I can find a good job after graduation, so I can buy luxury gear with my own money,” says Chen, whose parents sent her to study in London.

Prof. Li Fei is confident that China will become the world largest luxury market, driven by continuing pursuit of a better life and the expansion of the middle class as a result of the booming economy.

“It is important to learn how to savor luxury instead of only showing off. Otherwise, consuming luxury is a waste”, he says.

In a letter to subscribers this month, Access Asia, a UK-based independent market research company, said the “secretive market, where hard numbers are problematic and boosterish hoopla PR is the driving force,” made forecasting trends difficult.

However, the increasing sophistication of Chinese consumers augured poorly for the “more showy brands such as, notably, Louis Vuitton.”

The brand would start to lose sales when consumers mature, Access Asia predicted.

“LV follows boom economies and the new rich. A generation on, a bit of sophistication, and LV becomes a brand people move on from,” said the Access Asia newsletter.

Jane Shi spent more than 600 U.S. dollars buying a Louis Vuitton wallet, because she “adores its craftsmanship and durability”. But in public, she feels a little embarrassed. “I am afraid others might think it a fake,” she says.

Meanwhile, China’s own luxury brands are still a long way off, says Prof. Li. “Although China enjoys a long history and rich culture with world famous craftsmanship such as embroidery and scented-wood furniture, creative and fashionable brand design, marketing and brand management skills still lag behind.”

AT&T resumes online iPhone sales in NY

Tuesday, December 29th, 2009

AT&T has resumed selling iPhones through its Web site to New York customers, with no indication as to what prompted the halt, according to media reports Tuesday.

Over the holiday weekend, New Yorkers with Manhattan postal ZIP codes and New York ZIP codes who attempted to purchase an Apple Inc phone through AT&T’s Web site were told that the product was unavailable. But sales could once again be processed for New York ZIP codes through AT&T’s site on Monday afternoon.

A representative of AT&T said the company periodically modifies its promotions and distribution channels beyond a statement issued in an email earlier Sunday.

Making matters worse, the explanations ranged from network congestion problems to online fraud to this fine example of AT&T.

Sales representatives at Apple retail stores in Manhattan said the iPhone was available.

Apple’s iPhone, a cell phone with computer-like capabilities such as Web browsing and video games, has become one of the most popular smartphones on the market. When reports of the lack of iPhones emerged, AT&T may have been trying to ease congestion on its network.

ICT week exhibition opens in Myanmar northern city

Saturday, December 26th, 2009

An information and communication technology (ICT) week exhibition, aimed at promoting the development of the advanced technology and empowering people with IT knowledge, was inaugurated at the Yadanabon cyber city near Pyin Oo Lwin in northern part of the country Saturday.

The 8th Myanmar ICT week exhibition - 2009 will run until next Wednesday.

Information technology and modern IT products of IT companies from Yangon and Mandalay as well as six international companies are on display at the exhibition.

Miss Yadanapon contest, national-level game competition, dota game contest, ICT Gadget show and ICT stage show are attached with the exhibition.

Last month, similar exhibition was held in Yangon.

In that exhibition, a total of 70 companies showcased their up-date computer products and accessories including 3D-monitor, security-related solution, digital video recorder, IP camera, wireless-G internet camera, communication accessories, computer- related electronic devices, software and documents related to computer technology.

Disney’s earnings down

Thursday, December 24th, 2009

Net income at Walt Disney Co. in Burbank near Los Angeles fell 25 percent in fiscal 2009 from a year earlier, the company said.

The company saw significant declines at its movie studio and sagging earnings at the company’s theme parks because of aggressive discounting, said a company statement published by the Los Angeles Times on Thursday.

As a result of the declines, Disney’s chief executive Bob Iger’s bonus of 9.3 million dollars was down 33 percent from a year earlier, reflecting the company’s weaker financial performance, according to the statement filed Wednesday with the Securities and Exchange Commission.

Iger received a total compensation package worth 29 million dollars in 2009, slightly less than the 30.6 million he made last year.

Iger’s base salary of two million dollars remained effectively unchanged, although he collected an extra week’s salary in 2009 and received stock valued at 6.3 million and options worth an additional 8.3 million, according to the paper.

Among the perquisites Iger received was 589,102 dollars to cover the cost of security equipment and services, and his personal air travel cost 132,374 dollars.

Other expenses, including reimbursement for a health club membership or equipment and a vehicle, totaled 14,400 dollars.

The board’s executive compensation committee acknowledged the company’s slumping revenues and earnings in explaining the pay packages awarded to Iger and other top executives.

But it noted that this performance must be measured against “one of the worst national and global economic downturns in the postwar era” as well as changes made to position the company for future growth.

Tibet institutes disaster relief system

Tuesday, December 22nd, 2009

Tibet, a region prone to natural disasters, has introduced a disaster relief system, according to a director of the Tibet Autonomous Regional Civil Affairs Department.

After years of rescue efforts, the Tibet Autonomous Region has gradually perfected its disaster relief system and improved the management of its rescue and relief donations, the director said.

Located on the Qinghai-Tibet Plateau, Tibet features unpredictable weather and a harsh geographic environment. Disasters, such as blizzards, hurricanes, mud flows, earthquakes, occure from time to time to pose great threats to the region’s disaster relief system.

Xu Qiaofei, chief of the Disaster Relief Division of the Regional Civil Affairs Department, said that a disaster consultative mechanism, a disaster information platform and a relief supply system have been established in all seven prefectures and cities in Tibet.

Relief materials can reach the hands of the victims in less than five hours after a natural disaster occures, according to the department.

U.S. says hundreds of visas for officials, contractors delayed by Pakistan

Sunday, December 20th, 2009

The U.S. Department of State said on Thursday that Pakistan has been delaying hundreds of visas for U.S. officials and contractors, and the United States has raised the issue with the Pakistani side at “very senior levels.”

State Department spokesman Robert Wood said on Thursday the situation has been going on for months, and both diplomats and contractors are affected. He put the number of visa applications and renewals held up by the Pakistani government at “several hundred.”

Wood said the situation could “have an impact on our ability to do what we’re trying to do,” which included “fighting terrorism,” economic cooperation and others.

He said the issue has been raised with the Pakistani side “at very senior levels,” but wouldn’t confirm if this goes up to Secretary of State Hillary Clinton.

Wood said the issue is of “big concern,” but wouldn’t give a reason as to why the situation came about in the first place.

The United States has been using missile firing unmanned drones to target militant suspects in Pakistan and Afghanistan, causing civilian casualties. The measure has caused tension between Islamabad and Washington.

Digital Robin Hoods?

Friday, December 18th, 2009

“Who’s hurt most by online movie piracy?” I was asked this question while touring southern China early this year. Intuitively, it would seem to be the legal owners of the movies pirated, but it’s more complex than that. As I was dithering, the guy who put me in the quandary laughed: “The correct answer is, the offline movie pirates - the disc makers.”

Ever since the Internet revolution entered phase two, counterfeiters have been feeling the pinch. People uploaded movies and television shows online in a feel-good spirit of sharing. They didn’t care about making money, they just wanted to spread the joy. Profits be damned, as well as copyright issues.

It wasn’t that they were not aware they were doing something illegal. It was just that they possessed this sense of moral superiority. Chinese kids have long been taught that the ultimate goal of humanity is to achieve absolute equality and this means a free lunch for everyone.

The West does not have this interpretation of communism, but when it comes to the sharing of copyrighted materials many seem to regard the law as an inconvenience that hinders technological and human progress. When the United States cracked down on the practice by issuing summonses on heavy-duty downloaders, the press did not hide its sympathy. It portrayed the entertainment businesses as a big bad wolf and the individual violators as simple people who meant no harm. For instance, there was the 85-year-old lady who downloaded without knowing what she was doing.

Here in China many netizens have approached the practice with a similar mindset. The description used most often in the popular press is “illegal but reasonable”. The recent shutdown of hundreds of BT websites has pitched the faction that deems it “illegal” against the “reasonable” camp.

The cat-and-mouse chase ends up in a meal for the cat - no surprise there. Sites like BTChina used to defend itself by saying it was just an index of links. If a search engine is not responsible for illegal materials, why should it be held accountable for the pirated content it links to?

The government’s countermeasure is equally adroit: We did not crack down because you offer illegal video content, but because you are not licensed as a video site in the first place. BTChina did not say a word but close down. Its owner, Huang Xiwei, sounded so scared it is doubtful he will go near the business again.

Well, it was not exactly a business, more like a non-profit club. People have been supportive of the sites partly because they did not seem to have a profit motive. Who can blame them for stealing from the rich and giving it to the huddling masses?

But the digital Robin Hoods have been wreaking havoc on businesses whose core products can be digitized. The value of print publications has been dropping; the music business has suffered a mortal blow (in China disc distribution is almost non-existent and digital albums are mostly used as promotional tools for concerts and product endorsement deals); and now the movie and TV industries are putting up a good fight.

When I read views about this subject from the US, I’m often reminded of the Chinese revolution. “Progressive” types laugh at copyright owners who hold on to their property for dear life and refuse to give them away “for the good of humanity”. They are portrayed as unimaginative, reactionary and diehard.

In China the pressure is not rhetorical but comes from the actions of a new bunch of “heroes”. One of these groups is the translators who band together and render foreign-language dialogue into Chinese. They create subtitles of, say, the latest edition of Prison Break in just a couple of hours. The quality of their work is more reliable than the hack job provided by disc counterfeiters. Their selections accurately reflect the demand of these shows in the China market, most of which are not aired on Chinese TV.

In the end it is not just a moral vs legal fight. It has turned into a lifestyle issue. Browse Chinese Internet forums and the most common reaction toward the sudden wipeout is: “What can I do now? Do I have to go back to the dark ages of disc watching?” Even the few who support government action do not cite legal justification.

“BT downloading is hogging all the bandwidth,” some complained. Even BT’s competitors, such as legally operating video-sharing sites, are not gloating, or at least not openly. The atmosphere since the beginning of this month has been downright mournful - except for the unbelievably high approval ratings for the measure in official reports.

Pirating copyrighted content seems to be a clear-cut issue: It is illegal and should be banned. But in reality it is not that simple. For example, Hollywood is a victim of piracy. But some in China, especially industry insiders, hold the conspiracy theory that Hollywood is a perpetrator rather than a victim. They believe Hollywood has been deliberately supplying Chinese pirates with hard-to-obtain source materials.

Hard to believe? Their reasoning goes, Hollywood can only export a dozen movies to China, which has an import quota. So, the majority of its products do not have a China market in the first place. But it expects someday the quota system will be lifted. To warm up this future market, it needs to provide “samples” so that paying audiences of the future will become addicted. Pirates essentially save them the marketing costs.

I once asked a senior US official to comment on this and his eyes almost popped out. He had never heard of the argument. “But how can you explain the ready availability of all the new Hollywood blockbusters - some even before their debuts on the US screen? It has got to be an inside job,” I continued to argue.

Actually, I can argue from either side, or several sides: I could take the populist approach and go with the majority. It would make me look like a columnist in touch with the people and new trends. I could support the government and sympathize with the entertainment industry by emphasizing the rule of law.

The clearout of BT sites will likely revitalize the offline piracy business, which, if you look around, employs tens of thousands of street vendors, a group trying to earn a meager living out of a sprinkling of stardust. Arguably it is much harder for the government to sweep them off the street - and the overpasses and underpasses in crowded shopping districts.

I used to stock thousands of discs, but one day I realized it was not feasible. It was a colossal waste of shelf space. So I turned to video-sharing sites, those with licenses and ample capital. I don’t mind paying - as long as the fee is reasonable. For those accustomed to a free lunch, it could take a mindset change, but it’s not unthinkable.

Until that day, we’ll have to get used to the Kafkaesque sight of disc hawkers blocking the path to the movie theater, or online party-crashers clogging the information superhighway.

Video catches suicide attempt in custody

Wednesday, December 16th, 2009

Video footage provided by local police yesterday showed a burglary suspect had attempted to commit suicide before he was found dead at a detention center.

The evidence is meant to dismiss claims by the man’s family that he had been tortured to death by police while being held at a security bureau in Kunming, capital of Yunnan province, last Saturday.

The death of Xing Kun occurred as detention centers and prisons are coming under public scrutiny across China for incidents of beatings and even deaths suffered by suspects.

Officials yesterday afternoon displayed footage from the video surveillance system at a joint press briefing held by the procuratorate department and the police.

In the footage, Xing is seen unlocking the handcuffs with a banknote as he was alone in an investigation room, then trying but failing to hang himself with a bootlace.

The video surveillance system did not record the moment when Xing died because that area of the room was uncovered by the system, police had said earlier.

Xing died from hanging and was not tortured to death by police, said officials from the People’s Procuratorate of Kunming, citing an autopsy report.

The autopsy was conducted on Tuesday by the city’s procuratorate department in the presence of Xing’s family members, including his father, Xing Caifang.

Xing Caifang wondered how his son had managed to bring a bootlace with him into the interrogation room, citing common practices by the police that suspects should be searched for anything that can be used to commit suicide or self-harm.

“The evidence along with the autopsy results are still not solid enough to convince me,” said Xing Caifang on the phone. “One day the truth will finally come out.”

Addressing his questions about the wounds on Xing’s body, the procuratorate department said the injuries were bruises caused when the burglary suspect was captured last Friday.

The family does not know what to do next, he added. They cannot afford the fees to file a lawsuit against the authorities, although one lawyer reportedly has expressed willingness to help.

Xing also complained that the authorities did not inform him of the press briefing.

“It was not until I read a local newspaper that I knew there would be a press briefing,” he said.

Italy politics: sex, thighs and ‘Videocracy’

Monday, December 14th, 2009

Take a sex scandal dogging Silvio Berlusconi, add plenty of scantily clad young women on Italian TV and throw in some of the first serious scrutiny of a national culture where television lies at the nexus of power and politics.

The result is sex, thighs and “Videocracy” — a documentary that takes a harsh look at a system perfected through Berlusconi’s TV empire, in which sexy women become a symbol and instrument of power.

The undress-for-success formula is rarely challenged in Italy, where flaunting sex appeal is a way of life. But a rebellion of sorts has begun to challenge this Berlusconi-championed mix of sex, political influence and TV.

Cleavage and barely clad behinds are the signature feature of the lowbrow entertainment that is the mainstay of the Mediaset TV empire that made Berlusconi one of the world’s wealthiest men and launched him into politics in the early 1990s.

For some women seeking to catch Berlusconi’s eye, critics say, a lot of exposed skin has even been a way to break into politics; his minister for equal opportunity is a former beauty queen and host on Mediaset and state TV, and women whose most obvious attribute is sexiness have been recruited as candidates under the Berlusconi party banner.

Now comes an Italian businessman claiming to investigators that he procured some 30 women, many of them TV starlets or wannabes, as well as a high-end prostitute, to spice up the evenings dinners and parties at Berlusconi’s Sardinian villa and Rome palazzo.

The businessman has since been arrested in a cocaine probe. Berlusconi, who denies ever paying for sex, isn’t being investigated.

One politician who is decidedly not aiming for a shot on Berlusconi’s TV shows is Rosy Bindi, an opposition centrist who, as vice president of the Chamber of Deputies is one of Italy’s highest ranking female political figures.

She was on a state TV network in October, rebuking Berlusconi for the sex scandal when the 73-year-old premier phoned in and zinged her on the air, saying: “You are always more beautiful than intelligent.”

The graying, primly dressed 58-year-old shot back with: “I’m not one of the women at your disposal,” and a backlash was born.

La Repubblica, the left-leaning Rome newspaper that Berlusconi detests, invited women to express their anger, and some 100,000 responded in less than a month.

Besides posting irate comments on the paper’s Web site, many sent in photos of themselves, fully clothed and in such poses as stirring pots on the stove, working in office cubicles or holding babies. Many scrawled across their photos: “Mr. Premier, I’m not at your disposal.”

Then there is also “Il Corpo delle Donne” (The Body of Women), a pass-the-word cult YouTube video seen by nearly 1 million people.

A Milan businesswoman, Lorella Zanardo, spliced together snippets of some of the saucier scenes of sexy women known as “veline” (veh-LEE-neh) lifted from Berlusconi-owned and state TV networks.

When Zanardo takes the 25-minute video around to schools, she asks girls what they want to be someday. “The most popular calling for girls 16 or 17 years old is to be a ‘velina,’” said Zanardo.

In “Videocracy,” cameras roll at a shopping mall where crowds of eager parents and grandparents egg on skittish young women at annual “veline” tryouts.

Bindi blames the premier in large part. “Berlusconi has become the interpreter, the facilitator, the shaper of this culture,” she says.

Berlusconi has been unapologetic about his fondness for attractive women and the marital troubles they have caused him. His wife, Veronica Lario, herself a former starlet, is divorcing him, and her publicly expressed indignation that he tapped starlets to run for European Parliament seats forced all but one of them to drop out.

“Shameless trash in the name of power,” said Lario.

She also berated him for attending the 18th birthday party of a model from Naples last spring.

Italy’s unusual blend of sex and politics didn’t begin with Berlusconi. Twenty years ago it catapulted Ilona Staller, the former porn-star known as Cicciolina, into Parliament. But Berlusconi and his media empire have taken this mix to a more systematic, mass-cultural level.

Still, Berlusconi remains highly popular, and so do the onscreen veline.

They are fixtures of the most popular prime time slot, a parody of a newscast in which two young women, one blonde, one brunette and both in hot pants and shirts open almost to the navel, plop themselves on the desk of the show’s anchors — two men in suits. They are mostly silent, except when it comes time to hawk products.

Bindi notes that Italy’s relatively low rate of female women in jobs, and its generous early retirement system, give people ample time to watch TV.

Says Zanardo: “I don’t think Berlusconi had a strategy to sedate” women, but “TV does drug women who watch it five, six hours a day.”

“All the people who watch a lot of TV vote for him, especially women in the 50-to-70 age range,” Zanardo told The Associated Press in an interview.

As for Noemi Letizia, whose birthday party Berlusconi attended, she is said to harbor hopes of getting into politics.

‘”Daddy’ Silvio will take care of that,” she was quoted as telling a newspaper.

Hamas supporters rally in Gaza ahead of anniversary

Saturday, December 12th, 2009

Supporters of the Palestinian Islamic Hamas movement, which controls the Gaza Strip, rallied in several parts of the Israeli-blockaded coastal strip Friday in preparation for the movement’s 22nd anniversary.

Hundreds of militants mingled among thousands of Hamas supporters who toured the cities in cars and on motorbikes three days before the anniversary.

“Hamas became a regional movement in the region,” said Abdel Rahman al-Jamal, a Hamas lawmaker, during a rally in central Gaza Strip where the demonstrators burnt two coffins wrapped with Israeli and U.S. flags.

During a rally in al-Nusseirat refugee camp, masked militants waved green flags with Islamic phrases reading “no god but Allah, “the motto Hamas adopts. Other militants held posters of Hamas’ political and militant commanders killed in Israeli attacks over the current decade.

In another show, groups of people passed through the crowds wearing white robes in reference to suicide bombers who carried out a series of deadly attacks in Israel, mostly between 1995 and 2006.

In another message indicating that the Islamic movement may heavily resume rocket-fire on Israeli communities near Gaza, painters drew a graffito showing a home-made rocket directed at Tel Aviv, the key Israeli city that Hamas rockets had never reached.

Hamas reduced the rocket attacks when it seized control of Gazain June 2007 after it routed security forces loyal to moderate President Mahmoud Abbas. But after Israel ended a major three-week offensive in Gaza last January, the Islamic movement has completely halted rocket attacks.

Last month, Israeli intelligence officers said Hamas was testing longer-range rockets that could hit deeper inside Israel.

The Palestinian National Authority (PNA) has been confined to the West Bank since 2007, accusing Hamas of working to set up an Islamic emirate in the impoverished enclave where 1.5 million people live.

During the rallies, Hamas leaders urged their supporters to join the festival that would be staged on Monday to mark the movement’s anniversary, promising them of a “surprise” during the event.

Observers believe Hamas’ surprise is related to a possible prisoner exchange deal between the Islamic movement and Israel to free a captive soldier for hundreds of Arab and Palestinian inmates.

Vagueness covers the indirect talks that Germany and Egypt mediate to swap the prisoners. In October, Hamas released a video tape as the first evidence about the Israeli soldier Gilad Shalit’s condition since his capture in 2006.

Hamas bets to gather as many people as possible in its anniversary festival to challenge accusations that its popularity had decreased in the wake of the Israeli military operation that killed more than 1,300 Palestinians last winter.

Hamas has also played down calls to postpone the festival as influenza A/H1N1 reached Gaza Sunday and has killed seven so far.