Feds: MegaUpload was not entrapped



Kim DotCom (at right) and his company managers shortly after being arrested in January 2012 for alleged copyright violations and fraud.



(Credit:
Screenshot by CNET)


Entrapment is one of MegaUpload's claims in its legal battle against the U.S. government. The feds are now saying this claim is "baseless."

"Megaupload's allegations are baseless, as even a cursory review of Megaupload's pleading and the search warrant materials at issue disproves the allegation that the government misled the court as part of a conspiracy to entrap Megaupload," the government wrote in a Friday filing (PDF).

MegaUpload, which was founded by Kim DotCom, is the highest-profile service to be accused of criminal copyright violations by the U.S. government -- and the case is being watched closely around the globe.


DotCom's saga has played out over the past year after he was arrested on allegations of criminal copyright violation, conspiracy, money laundering, and wire fraud. U.S. federal officials accused DotCom of pocketing millions of dollars in illegal profits from criminal file sharing and downloading that has reportedly cost the film industry more than $600 million in damages.

One of the reasons DotCom claims he was entrapped by the U.S. government is because he complied with a federal search warrant targeting five file-sharing services using MegaUpload's infrastructure in 2010, according to Wired. These file-sharing services, including Movies-Links.tv, Planetmoviez.com, and Ninjavideo.net, were accused of being movie-pirating sites.

MegaUpload reportedly gave the authorities a database of 39 pirated movies, which allowed the feds to raid the sites' operators and seize their assets. Even though DotCom cooperated with the government, the feds then used this same database as evidence in its case against MegaUpload. Apparently, DotCom never deleted the allegedly pirated movies from MegaUpload's servers, which the government said proved he was aware of pirated material on the platform.

In a January 2 court filing (PDF), DotCom's lawyer Ira Rothken wrote that "MegaUpload had every reason to retain those files in good faith because the government had sought and obtained MegaUpload's cooperation in retrieving those files and warned that alerting users to the existence of the warrant and the government's interest in the files could compromise the investigation."

However, the feds filing from Friday said this claim is meritless and that the government never told DotCom to keep the files. The feds also said that more than 2,000 users uploaded the 39 pirated movies because the material wasn't deleted from MegaUpload's servers.

Currently, DotCom and his company managers are free on bail in New Zealand while waiting for an extradition hearing. The hearing will determine whether they will be extradited to the U.S. to stand trial. The earliest the hearing will be scheduled is July 2013.

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North Korea vows to bolster war defenses

PYONGYANG, North Korea North Korea is vowing to strengthen its war defenses amid concerns the country may conduct a third nuclear test.

Citing U.S. hostility, Pyongyang's Foreign Ministry said Monday without elaborating that the country will "continue to strengthen its deterrence against all forms of war."

A ministry memorandum carried by the Korean Central News Agency urged the U.S. to dismantle a U.N. command that oversees an armistice signed at the close of the Korean War in 1953.

North Korea claims the right to build atomic weapons to protect itself against U.S. threats. Monday's memorandum comes amid worries Pyongyang may follow a December rocket launch with a nuclear test.

Pyongyang carried out atomic tests in 2006 and 2009 weeks after being slapped with U.N. Security Council condemnation and sanctions for similar rocket launches.

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Big Winners, Top Moments From the Golden Globes






Let's finally bury this idea that women can't be funny once and for all. Fey and Poehler were undeniably hilarious throughout the Globes, so much so that many fans on Twitter demanded more of them during the ceremony. From their opening bit -- Poehler: "Meryl Streep is not here tonight, she has the flu. And I hear she's amazing in it." -- to their pseudo drunk heckling of best TV comedy actress winner Lena Dunham, they were radiant, energetic, and above all, funny. More please.



Foster made her acceptance of the Cecil B. DeMille lifetime achievement award a coming out, of sorts. She first shocked the audience by leading them to think that she was about to make a huge public statement about her sexuality. Instead, she said she was single, adding "I already did my coming out in the stone age."


"Now, apparently, I'm told that every celebrity is expected to honor the details of their private life with a press conference ... You guys might be surprised, but I'm not Honey Boo Boo child," she said, to a flurry of laughter and applause.


"If you had been a public figure from the time that you were a toddler ... then maybe you too might value privacy above all else," she said. "Privacy."


But Foster did specifically thank her ex-partner Cydney Bernard, with whom she has two kids. Both boys gestured to her from the audience.


She also implied that she was retiring from acting when she said she would not be returning to the Globes stage or any stage. "It's just that from now on, I may be holding a different talking stick," Foster said, bringing many in the audience to tears.


But backstage, Foster clarified to reporters that she was not retiring from acting. "Oh that's so funny," she responded to reporters. "You couldn't drag me away. And I'd like to be directing tomorrow."



It takes a lot to make Hollywood star struck. Bill Clinton did it when he strutted on stage to introduce a clip of "Lincoln," which was up for best drama. He brought the crowd of A-listers to its feet and commended the 16th president. "We're all here tonight because he did it," he said of Lincoln's battle to end slavery.



If there was any doubt that Lena Dunham wasn't Hollywood's next big thing, it was obliterated Sunday night. The star and creator of HBO's "Girls" went home with two awards, best actress in a TV comedy and best TV comedy. Her heartfelt acceptance speech for best actress struck a chord: "This award is for everyone who feels like there wasn't a place for her," she said. "This show made a space for me."



Jessica Chastain won the Globe for best actress in a drama for "Zero Dark Thirty." She offered a moving tribute to director Kathryn Bigelow, the first woman to win a best director Oscar who failed to get a nomination for that award this year, though "ZDT" was up for a slew of other awards, including best picture. "I can't help but compare my character of Maya to you," Chastain said to Bigelow. "When you make a film that allows your character to disobey the conventions of Hollywood, you've done more for women in cinema than you take credit for."



Blame it on nerves, the spirit of spontaneity, or the a-a-a-a-alcohol (apologies to Jamie Foxx), but Jennifer Lawrence's acceptance speech was a tad insulting to a Hollywood icon, if totally hilarious. "Oh what does it say?" she asked, looking at her trophy. "I beat Meryl." She meant Meryl Streep, who was also up for the award.


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France bombs Islamist strongholds in north Mali


BAMAKO/PARIS (Reuters) - French fighter jets pounded Islamist rebel strongholds deep in northern Mali on Sunday as Paris poured more troops into the capital Bamako, awaiting a West African force to dislodge al Qaeda-linked insurgents from the country's north.


The attacks on Islamist positions near the ancient desert trading town of Timbuktu and Gao, the largest city in the north, marked a decisive intensification on the third day of the French mission, striking at the heart of the vast area seized by rebels in April.


France is determined to end Islamist domination of northern Mali, which many fear could act as a base for attacks on the West and for links with al Qaeda in Yemen, Somalia and North Africa.


Defense Minister Jean-Yves Le Drian said France's sudden intervention on Friday had prevented the advancing rebels from seizing Bamako. He vowed that air strikes would continue.


"The president is totally determined that we must eradicate these terrorists who threaten the security of Mali, our own country and Europe," he told French television.


Residents and rebel leaders had reported air raids early on Sunday in the towns of Lere and Douentza in central Mali, forcing Islamists to withdraw. As the day progressed, French jets struck targets further to the north, including near the town of Kidal, the epicenter of the rebellion.


In Gao, a dusty town on the banks of the Niger river where Islamists have imposed an extreme form of sharia law, residents said French jets pounded the airport and rebel positions. A huge cloud of black smoke rose from the militants' camp in the city's north, and trucks ferried dead and wounded to hospital.


"The planes are so fast you can only hear their sound in the sky," resident Soumaila Maiga said by telephone. "We are happy, even though it is frightening. Soon we will be delivered."


Paris said four Rafale jets flew from France to strike rebel training camps, logistics depots and infrastructure around Gao with the aim of weakening the rebels and preventing them from returning southward.


"We blocked the terrorists' advance and from today what we've started to do is to destroy the terrorists' bases behind the front line," French Foreign Minister Laurent Fabius told LCI television.


France has deployed about 550 soldiers to Mali under "Operation Serval" -- named after an African wildcat -- split between Bamako and the town of Mopti, 500 km (300 miles) north.


In Bamako, a Reuters cameraman saw more than 100 French troops disembark on Sunday from a military cargo plane at the international airport, on the outskirts of the capital.


The city's streets were calm, with the sun streaking through the dusty air as the seasonal Harmattan wind blew from the Sahara. Many cars had French flags draped from the windows to celebrate Paris's intervention.


"We thank France for coming to our aid," said resident Mariam Sidibe. "We hope it continues till the north is free."


AFRICAN TROOPS EXPECTED


More than two decades of peaceful elections had earned Mali a reputation as a bulwark of democracy, but that image unraveled in a matter of weeks after a military coup in March which left a power vacuum for the Islamist rebellion.


France convened a U.N. Security Council meeting for Monday to discuss Mali. French President Francois Hollande's intervention has won plaudits from leaders in Europe, Africa and the United States but it is not without risks.


It raised the threat level for eight French hostages held by al Qaeda allies in the Sahara and for the 30,000 French expatriates living in neighboring, mostly Muslim states.


Concerned about reprisals, France has tightened security at public buildings and on public transport. It advised its 6,000 citizens to leave Mali as spokesmen for Ansar Dine and al Qaeda's north Africa wing AQIM promised to exact revenge.


In its first casualty of the campaign, Paris said a French pilot was killed on Friday when rebels shot down his helicopter.


Hours earlier, a French intelligence officer held hostage in Somalia by al Shabaab extremists linked to al Qaeda was killed in a failed commando raid to free him.


Hollande says France's aim is simply to support a mission by West African bloc ECOWAS to retake the north, as mandated by a U.N. Security Council resolution in December.


With Paris pressing West African nations to send their troops quickly, Ivory Coast President Alassane Ouattara, who holds the rotating ECOWAS chairmanship, kick-started the operation to deploy 3,300 African soldiers.


Ouattara, installed in power with French military backing in 2011, convened a summit of the 15-nation bloc for Saturday in Ivory Coast to discuss the mission.


"The troops will start arriving in Bamako today and tomorrow," said Ali Coulibaly, Ivory Coast's African Integration Minister. "They will be convoyed to the front."


The United States is providing transportation and communications support for the push against the Islamist rebels, a U.S. official told Reuters, speaking on condition of anonymity.


The U.S. support also includes intelligence sharing, the official said, without elaborating. Earlier on Sunday, another U.S. official said Washington was considering sending a small number of unarmed surveillance drones.


Britain and Canada have also promised logistical support.


Former French colonies Senegal, Niger and Burkina Faso have all pledged to deploy 500 troops within days. In contrast, regional powerhouse Nigeria, due to lead the ECOWAS force, has suggested it would take time to train and equip the troops.


HOUSE-TO-HOUSE SEARCHES


France, however, appeared to have assumed control of the operation on the ground. Its air strikes allowed Malian troops to drive the Islamists out of the strategic town of Konna, which they had briefly seized this week in their southward advance.


Calm returned to Konna after three nights of combat as the Malian army crushed any remaining rebel fighters. A senior army official said more than 100 rebels had been killed.


"Soldiers are patrolling the streets and have encircled the town," one resident, Madame Coulibaly, told Reuters by phone. "They are searching houses for arms or hidden Islamists."


Analysts expressed doubt, however, that African nations would be able to mount a swift operation to retake north Mali -- a harsh, sparsely populated terrain the size of France -- as neither the equipment nor ground troops were prepared.


"My first impression is that this is an emergency patch in a very dangerous situation," said Gregory Mann, associate professor of history at Columbia University, who specializes in francophone Africa and Mali in particular.


While France and its allies may be able to drive rebel fighters from large towns, they could struggle to prise them from mountain redoubts in the region of Kidal, 300 km (200 miles) northeast of Gao.


Human Rights Watch said at least 11 civilians, including three children, had been killed in the fighting. A spokesman for Doctors Without Borders in neighboring Mauritania said about 200 Malian refugees had fled across the border to a camp at Fassala and more were on their way.


In Bamako, civilians tried to contribute to the war effort.


"We are very proud and relieved that the army was able to drive the jihadists out of Konna. We hope it will not end there, that is why I'm helping in my own way," said civil servant Ibrahima Kalossi, 32, one of over 40 people who queued to donate blood for wounded soldiers.


(Additional reporting by Adama Diarra, Tiemoko Diallo and Rainer Schwenzfeier in Bamako, Pascal Fletcher in Johannesburg, Joe Bavier in Abidjan, Catherine Bremer, Leila Aboud and John Irish in Paris and Phil Stewart in Washington; Writing by Daniel Flynn; Editing by Will Waterman and Roger Atwood)



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S'pore property shares tumble after cooling measures






SINGAPORE: Shares of major property developers in Singapore were battered Monday after the government introduced new measures to cool the real estate market at the weekend.

By midday, shares of top developers listed on the Singapore Exchange had sunk more than four per cent as investors spooked by the measures dumped the stocks.

CapitaLand shed 4.11 per cent to S$3.73, City Developments fell 6.11 per cent to S$11.83 and Keppel Land slumped 6.31 per cent to S$4.01.

"We're seeing a knee-jerk reaction to the cooling measures," said Jason Hughes, head of premium client management for IG Markets Singapore.

The new measures, which came into force Saturday, included sharply higher duties on property purchases by foreigners.

Singaporeans' minimum cash downpayments for second or subsequent homes were raised from 10 to 25 per cent of a property's value.

But Hughes predicted property stocks would be able to ride out the storm thanks to their overseas portfolios.

"We do have to consider that a number of these guys are regionally focused," he said, adding that the effects would have been more severe if they were "purely local developers."

HSBC Global Research said in a report that Singapore may institute more cooling measures because property demand is expected to remain robust.

"Low interest rates and an expected economic recovery this year will support demand. Further steps can, therefore, not be ruled out," the report stated.

The new property measures were imposed after home prices continued to rise even as the city-state suffered an economic slowdown.

Singapore narrowly avoided a technical recession in the last quarter of 2012.

The economy grew just 1.2 per cent in 2012, from 4.9 per cent in 2011, with 2013 expansion forecast at 1.0-3.0 per cent.

- AFP/ck



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Anonymous hacks MIT after Aaron Swartz's suicide





Anonymous' message on an MIT page (click for larger image).



(Credit:
Screenshot by Steven Musil/CNET)



Just hours after the Massachusetts Institute of Technology pledged an investigation into its role in events leading up to the suicide of Aaron Swartz, online hacktivist group Anonymous defaced the school's Web site.


Swartz, a Reddit cofounder who championed open access to documents on the Internet, committed suicide on Friday. The 26-year-old was arrested in July 2011 and accused of stealing 4 million documents from MIT and Jstor, an archive of scientific journals and academic papers. He faced $4 million in fines and more than 50 years in prison if convicted.




After MIT President L. Rafael Reif issued a statement this afternoon promising a "thorough analysis of MIT's involvement from the time that we first perceived unusual activity on our network in fall 2010 up to the present," Anonymous targeted at least two MIT Web sites. Lacking the loose-knit group's usual feisty language, the message posted on the Web site was a call for reform in the memory of the late Internet activist.


After calling the prosecution of Swartz "a grotesque miscarriage of justice" and "a distorted and perverse shadow of the justice that Aaron died fighting for," Anonymous outlined its list of goals under a section reservedly labeled "Our wishes:"

  • We call for this tragedy to be a basis for reform of computer crime laws, and the overzealous prosecutors who use them.

  • We call for this tragedy to be a basis for reform of copyright and intellectual property law, returning it to the proper principles of common good to the many, rather than private gain to the few.

  • We call for this tragedy to be a basis for greater recognition of the oppression and injustices heaped daily by certain persons and institutions of authority upon anyone who dares to stand up and be counted for their beliefs, and for greater solidarity and mutual aid in response.

  • We call for this tragedy to be a basis for a renewed and unwavering commitment to a free and unfettered internet, spared from censorship with equality of access and franchise for all.


CNET has contacted MIT for comment on the apparent hacking and will update this report when we learn more.


Critics of the prosecutors in the case say the feds were unfairly trying to make an example out of Swartz. "Aaron's death is not simply a personal tragedy," Swartz's family said in a statement released yesterday. "It is the product of a criminal justice system rife with intimidation and prosecutorial overreach. Decisions made by officials in the Massachusetts U.S. Attorney's office and at MIT contributed to his death."


CNET has also contacted the U.S. Attorney's office and will update this report when we hear back.


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Kaepernick delivers, 49ers beat Packers 45-31

San Francisco 49ers quarterback Colin Kaepernick (7) runs for a 56-yard touchdown against the Green Bay Packers during the third quarter of an NFC divisional playoff NFL football game in San Francisco, Saturday, Jan. 12, 2013. / AP Photo/Marcio Jose Sanchez

SAN FRANCISCO Colin Kaepernick ran for a quarterback playoff record 181 yards and two touchdowns and threw two scoring passes to Michael Crabtree in leading the San Francisco 49ers back to the NFC championship game with a 45-31 victory against the Green Bay Packers on Saturday night.

Playoff first-timer Kaepernick outshined reigning NFL MVP Aaron Rodgers, who never got in sync for the Packers (12-6) in finishing 26 of 39 for 257 yards with two touchdowns.

Kaepernick ran for scores of 20 and 56 yards on the way to topping the rushing mark of 119 yards held by Michael Vick. Crabtree caught TD passes of 12 and 20 yards in the second quarter and wound up with nine receptions and 119 yards for the Niners (12-4-1) in the NFC divisional matchup.

San Francisco had 579 total yards, 323 on the ground.

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Poisoned Lottery Winner's Kin Were Suspicious













Urooj Khan had just brought home his $425,000 lottery check when he unexpectedly died the following day. Now, certain members of Khan's family are speaking publicly about the mystery -- and his nephew told ABC News they knew something was not right.


"He was a healthy guy, you know?" said the nephew, Minhaj Khan. "He worked so hard. He was always going about his business and, the thing is: After he won the lottery and the next day later he passes away -- it's awkward. It raises some eyebrows."


The medical examiner initially ruled Urooj Khan, 46, an immigrant from India who owned dry-cleaning businesses in Chicago, died July 20, 2012, of natural causes. But after a family member demanded more tests, authorities in November found a lethal amount of cyanide in his blood, turning the case into a homicide investigation.


"When we found out there was cyanide in his blood after the extensive toxicology reports, we had to believe that ... somebody had to kill him," Minhaj Khan said. "It had to happen, because where can you get cyanide?"


In Photos: Biggest Lotto Jackpot Winners


Authorities could be one step closer to learning what happened to Urooj Khan. A judge Friday approved an order to exhume his body at Rosehill Cemetery in Chicago as early as Thursday to perform further tests.








Lottery Winner Murdered: Widow Questioned By Police Watch Video









Moments after the court hearing, Urooj Khan's sister, Meraj Khan, remembered her brother as the kind of person who would've shared his jackpot with anyone. Speaking at the Cook County Courthouse, she hoped the exhumation would help the investigation.


"It's very hard because I wanted my brother to rest in peace, but then we have to have justice served," she said, according to ABC News station WLS in Chicago. "So if that's what it takes for him to bring justice and peace, then that's what needs to be done."


Khan reportedly did not have a will. With the investigation moving forward, his family is waging a legal fight against his widow, Shabana Ansari, 32, over more than $1 million, including Urooj Khan's lottery winnings, as well as his business and real estate holdings.


Khan's brother filed a petition Wednesday to a judge asking Citibank to release information about Khan's assets to "ultimately ensure" that [Khan's] minor daughter from a prior marriage "receives her proper share."


Ansari may have tried to cash the jackpot check after Khan's death, according to court documents, which also showed Urooj Khan's family is questioning if the couple was ever even legally married.


Ansari, Urooj Khan's second wife, who still works at the couple's dry cleaning business, has insisted they were married legally.


She has told reporters the night before her husband died, she cooked a traditional Indian meal for him and their family, including Khan's daughter and Ansari's father. Not feeling well, Khan retired early, Ansari told the Chicago Sun-Times, falling asleep in a chair, waking up in agony, then collapsing in the middle of the night. She said she called 911.


"It has been an incredibly hard time," she told ABC News earlier this week. "We went from being the happiest the day we got the check. It was the best sleep I've had. And then the next day, everything was gone.


"I am cooperating with the investigation," Ansari told ABC News. "I want the truth to come out."


Ansari has not been named a suspect, but her attorney, Steven Kozicki, said investigators did question her for more than four hours.






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Russia rejects Assad exit as precondition for Syria deal


MOSCOW/BEIRUT (Reuters) - Russia voiced support on Saturday for international peace envoy Lakhdar Brahimi but insisted Syrian President Bashar al-Assad's exit cannot be a precondition for a deal to end the country's conflict.


Some 60,000 Syrians have been killed during the 21-month-old revolt and world powers are divided over how to stop the escalating bloodshed. Government aircraft bombed outer districts of Damascus on Saturday after being grounded for a week by stormy weather, opposition activists in the capital said.


A Russian Foreign Ministry statement following talks on Friday in Geneva with the United States and Brahimi reiterated calls for an end to violence in Syria, but there was no sign of a breakthrough.


Brahimi said the issue of Assad, who the United States, European powers and Gulf-led Arab states insist must step down to end the civil war, appeared to be a sticking point.


Russia's Foreign Ministry said: "As before, we firmly uphold the thesis that questions about Syria's future must be decided by the Syrians themselves, without interference from outside or the imposition of prepared recipes for development."


Russia has been Assad's most powerful international backer, joining with China to block three Western- and Arab-backed U.N. Security Council resolutions aimed to pressure him or push him from power. Assad can also rely on regional powerhouse Iran.


Russia called for "a political transition process" based on an agreement by foreign powers last June.


Brahimi, who is trying to build on that agreement, has met three times with senior Russian and U.S. diplomats since early December and met Assad in Damascus.


Russia and the United States disagreed over what the June agreement meant for Assad, with Washington saying it sent a clear signal he must go and Russia contending it did not.


Qatar on Saturday made a fresh call for an Arab force to end bloodshed in Syria if Brahimi's efforts fail, according to the Doha-based al Jazeera television.


"It is not a question of intervention in Syria in favor of one party against the other, but rather a force to preserve security," Qatar's Prime Minister and Foreign Minister, Sheikh Hamad bin Jassim al-Thani, said in an al Jazeera broadcast.


CONFLICT INTENSIFIES


Moscow has been reluctant to endorse the "Arab Spring" popular revolts of the last two years, saying they have increased instability in the Middle East and created a risk of radical Islamists seizing power.


Although Russia sells arms to Syria and rents one of its naval bases, the economic benefit of its support for Assad is minimal. Analysts say President Vladimir Putin wants to prevent the United States from using military force or support from the U.N. Security Council to bring down governments it opposes.


However, as rebels gain ground in the war, Russia has given indications it is preparing for Assad's possible exit, while continuing to insist he must not be forced out by foreign powers.


Opposition activists say a military escalation and the hardship of winter have accelerated the death toll.


Rebel forces have acquired more powerful anti-tank and anti-aircraft weapons during attacks on Assad's military bases.


Assad's forces have employed increasing amounts of military hardware including Scud-type ballistic missiles in the past two months. New York-based Human Rights Watch said they had also used incendiary cluster bombs that are banned by most nations.


STALEMATE IN CITIES


The weeklong respite from aerial strikes has been marred by snow and thunderstorms that affected millions displaced by the conflict, which has now reached every region of Syria.


On Saturday, the skies were clear and jets and helicopters fired missiles and dropped bombs on a line of towns to the east of Damascus, where rebels have pushed out Assad's ground forces, the Syrian Observatory for Human Rights said.


The British-based group, which is linked to the opposition, said it had no immediate information on casualties from the strikes on districts including Maleiha and farmland areas.


Rebels control large swathes of rural land around Syria but are stuck in a stalemate with Assad's forces in cities, where the army has reinforced positions.


State TV said government forces had repelled an attack by terrorists - a term it uses for the armed opposition - on Aleppo's international airport, now used as a helicopter base.


Reuters cannot independently confirm reports due to severe reporting restrictions imposed by the Syrian authorities and security constraints.


On Friday, rebels seized control of one of Syria's largest helicopter bases, Taftanaz in Idlib province, their first capture of a military airfield.


Eight-six people were killed on Friday, including 30 civilians, the Syrian Observatory said.


(Writing by Oliver Holmes; Editing by Tom Pfeiffer and Doina Chiacu)



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China economy to rebound in 2013: survey






BEIJING: China's economy is poised finally to end a long downward trend in 2013, economists polled by AFP say, as the new communist leadership vows to retool the nation's investment-led development model and promote a "happy life" for all.

The world's second-largest economy is not expected to return to double-digit growth, but the economists' predictions are a welcome spot of good news in a financial world assailed by the eurozone debt crisis and lacklustre recovery in the United States.

After seven consecutive quarters of slowing growth, China's gross domestic product (GDP) will rise by 8.0 per cent in 2013, according to the median forecast of 15 economists surveyed by AFP. The poll also projected 7.7 per cent growth for 2012.

The figures would outpace the government's 7.5 per cent growth target for 2012 -- but are well below the 9.3 per cent recorded in 2011 and 10.4 per cent in 2010.

Maintaining growth is all-important for China's communist leaders, who derive much of their claims to legitimacy from the country's reform-led economic rise, which has lifted hundreds of millions of people out of poverty over the past three decades.

The rebound comes as China formally wraps up a once-in-a-decade leadership change in March when Xi Jinping, who was named Communist Party chief in November, takes over as president and Li Keqiang becomes premier in charge of day-to-day administration.

Xi, in his first public appearance after being chosen to lead the party, said China's citizens "want their children to have sound growth, have good jobs and lead a more enjoyable life. To meet their desire for a happy life is our mission."

China's stunning economic transformation has long been fuelled by heavy state investment in railways, airports, bridges and buildings, as well as an emphasis on manufacturing and exports.

But it is now trying to promote demand from its own increasingly well-off consumers as the economy's main driver. And the Communist Party says it recognises the need to encompass the have-nots who have failed to share in the boom as a rich-poor gap opens up.

The National Bureau of Statistics is due to announce GDP figures for the fourth quarter and the whole of 2012 on Friday.

For the final quarter of last year, the median forecast in the AFP survey was 7.8 per cent, up from official third-quarter growth of 7.4 per cent -- which was the lowest figure since early 2009.

"The new leaders themselves would like economic growth to not be slower than 2012... in their first year," Chen Xingdong, a Beijing-based economist with French bank BNP Paribas who is expecting 2013 growth of 8.3 per cent, told AFP.

Stronger monthly data during the fourth quarter, including industrial output and retail sales, has fanned optimism the worst is over, as did new single-month highs for imports and exports in December.

But the economy still faces challenges such as unresolved structural problems including overcapacity and reliance on investment-driven growth, said Yao Wei, Hong Kong-based economist with Societe Generale.

"We can't get over-optimistic over the current recovery," she said.

China's economy averaged GDP growth of 10 per cent in the decade to 2010. A slower rate of 7.0-8.0 per cent is seen by economists as part of China's natural economic evolution as spending on projects such as transport and utility networks is reined in.

But market optimism over China's prospects risks being disappointed if in 2013 "the recovery remains centred on infrastructure and real-estate investment rather than consumption", wrote Mark Williams, chief Asia economist at Capital Economics.

Some also question how serious the government is about reforming the economy, as well as other challenges it has vowed to pursue, including cracking down on corruption.

"The current difficulty we have with the policymakers is that the focus is on changing the perception and hoping that the people believe," said Andy Xie, a Shanghai-based independent economist.

"It shows that real change is very hard to do. So you shift to the propaganda department to see if they can do the job."

- AFP/ck



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