09/18/14 ~ CROSS RIVER UNIVERSITY OF TECHNOLOGY

Thursday, 18 September 2014

TECHNOLOGY NEWS: Monitise shares tumble as Visa explores options for stake

(Reuters) - Shares of Monitise Plc fell by nearly a third after Visa Inc said it was exploring options for its 5.5 percent stake in the British mobile banking technology company.

Visa, the world's largest credit and debit card company, said it had hired J.P. Morgan Securities Plc to help consider its options for the investment.

Monitise was the biggest percentage loser on the London Stock Exchange on Thursday morning, with nearly 250 million pounds ($408 million) wiped off the company's market value. More than 51 million shares had changed hands by 1008 GMT (6:08 a.m. EDT)

Visa Inc is the fourth-biggest shareholder in Monitise. Visa Europe separately holds a stake in the company.

Monitise hired former Visa executive Elizabeth Buse in June to co-run the company as it pursues a sevenfold increase in the number of customers using its mobile banking and payment systems.

Visa first invested in Monitise in 2009, when the company's revenue was about 3 million pounds, to provide capital support as the company grew its mobile payments business. It has reduced its original 14.4 percent stake in the company over time.

Visa said the reduction of its stake followed its practice of supplying seed capital to emerging companies and reducing its influence as the company grows.

Monitise, which listed on London's Alternate Investment Market in mid-2007, reported revenue of 95.1 million pounds in the year ended June 30.

Visa said Monitise would provide it with mobile platform development services through 2016.

Monitise said in a separate statement that it would continue its alliance with Visa Inc and reiterated its guidance for the current financial year.

Shares of Monitise were trading down 23.5 percent at 32.50 pence at 1008 GMT (6:08 a.m. EDT).

(1 US dollar = 0.6133 British pound)

(Reporting by Noor Zainab Hussain and Roshni Menon in Bangalore; Editing by Gopakumar Warrier and Robin Paxton)

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TECHNOLOGY NEWS: Toshiba says to cut 900 jobs in PC restructuring

12:52 No comments

TOKYO (Reuters) - Japan's Toshiba Corp (6502.T) said it would cut 900 jobs in a restructuring of its PC business that will include an exit from business-to-consumer operations in some regions.

The Japanese electronics conglomerate expects the PC restructuring to cut operating profit by 45 billion yen ($414 million) but did not change its earnings forecast for the current year to March, as better-than-expected earnings in electricity and other operations offset the impact.

Toshiba said the job cuts, to be carried out during the current financial year, were expected to cut fixed costs by more than 20 billion yen compared with 2013/14.

(Reporting By Teppei Kasai; Editing by Edmund Klamann)

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TECHNOLOGY Apple hiring manager to handle China government data requests

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BEIJING (Reuters) - Apple Inc is hiring a head of law enforcement in Beijing to deal with user data requests from China's government, according to a public job listing, after it last month began storing private data on Chinese soil for the first time.

According to the job listing, posted on professional networking site LinkedIn, the position will handle the "increasing number of third-party requests for access to Apple controlled data within China."

The hiring of a head of law enforcement demonstrates the trade-off that comes with placing data storage within China, a move some technology companies avoid. Having a server in the country can provide faster service to domestic customers, but it also means China's government can demand those servers' data, as is the case in other countries.

"The role will be directly responsible for the management, handling and issuance of appropriate responses to requests from law enforcement authorities, public prosecutors, and Courts etc. throughout China," said the posting on LinkedIn.

Apple declined to comment, but referred Reuters to the company's new privacy policy including a section on government data requests.

According to the Apple posting, the candidate would need to "educate requesters as to the data that can and cannot be supplied in particular circumstances while maintaining good working relations with requesters."

The job was initially posted in early August and was re-posted last week. The new position advertisement has received 11 applicants.

Technology companies including Google Inc, Yahoo Inc and Facebook Inc routinely employ staff on their legal teams to determine how to respond to government requests for data.

In the case of Google, for instance, the search giant said this week that government requests have risen 150 percent in the past five years excluding those made by the U.S. government under the Foreign Intelligence Surveillance Act. Google complied with 65 percent of the 31,698 requests made during the first half of 2014, it said.

Google publicly abandoned China in 2010 and moved its services, including its search engine, to Hong Kong-based servers after refusing to comply with Chinese government censorship.

Yahoo came under fire and U.S. Congressional scrutiny after it in 2005 handed to Chinese authorities emails that led to the imprisonment of Shi Tao, a journalist who obtained and leaked an internal censorship order the government had sent Chinese media.

(Editing by Ryan Woo)

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TECHNOLOGY Banks spend more on IT, hoping the cloud is silver-lined

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GENEVA (Reuters) - Two-thirds of banks are planning to spend more on information technology this year, the highest proportion since before the start of the financial crisis, according to an annual survey published on Wednesday.

The survey of 198 senior bankers by banking software firm Temenos also found only 11 percent anticipated spending less on IT this year, the lowest since 2008.

"Historically, and even more in Switzerland, IT was considered as a necessary evil, something that needed to exist because it existed in the engine room," said Pietro Di Gregorio, head of business intelligence at Swiss private bank EFG Bank.

"But as of now, IT has to change its behavior," he said.

Survey respondents considered customer loyalty their biggest challenge, cited by 30 percent. This worried Asian banks more than their European counterparts and they were also keener to invest in IT-related innovations to help them retain clients.

Private banks were second only to retail banks in worrying about customer loyalty - and with good reason, said the survey's author, Temenos' chief strategy officer Ben Robinson.

Younger tech-savvy clients "have zero interest in banking the way their parents did", he said. But banks must spend wisely to avoid their IT infrastructure turning into a spaghetti-like mess.

"They need to clean that whole thing up if they are going to be successful in the digital age. But instead what they tend to do is they say 'Customers want access to the bank through their mobile phone', so they build specific applications for those without dealing with the underlying mess."

CLOUD COMPUTING

The top competitive threat, cited by 23 percent of respondents, was seen to be non-bank newcomers such as Google and Pay pal, part of EBay Inc.

"The new entrants are coming into an area that's not highly regulated but highly profitable, things like remittances, foreign exchange, unsecured lending, micro finance. But these are also the parts of the banking value chain that subsidize the rest of what banks do," said Robinson.

"So right now they're in danger of being pushed down into the heavily regulated, unsexy, unprofitable parts of banking. So really it is a choice between do they fight back or live with that reality."

In the search for a strategy, banks are increasingly turning to cloud computing to save money. Most now use some cloud-based email or collaboration tools, and 86 percent now run at least one application in the cloud, compared to 57 percent in 2009.

But they are also getting more worried about the safety of doing so . Some39 percent said data security was the biggest barrier to more cloud computing, a jump from 29 percent a year ago.

"I think it's a blip, it's an Edward Snowden related blip," said Robinson. "And I don't see any alternative for banks to adopt the cloud long term."

Only 1 percent of banks' core processing is cloud-based, since they are reluctant to entrust the most sensitive data to what Robinson described as "shared infrastructure".

But Temenos expects the situation to change quickly. The cloud could even present a selling point for Swiss banks that are struggling to reinvent themselves after the loss of Swiss banking secrecy, Robinson said.

"Switzerland could have an unbelievably successful business in cloud. The data regulations are more evolved that in most European countries, certainly more evolved than in the U.S., and secondly for all the reasons that multinationals come here - it's politically stable, it's got lots of renewable energy."

(Reporting by Tom Miles; Editing by Tom Heneghan)

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TECHNOLOGY NEWS: Bug delays Apple's HealthKit availability on iOS 8

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(Reuters) - Apple Inc said a bug in its HealthKit health and fitness application platform prevented its release along with the launch of its iOS 8 operating system for iPhones and iPads.

HealthKit gathers data such as blood pressure and weight from various health apps on Apple devices, and can be viewed by doctors at one place.

Regulated medical devices, such as glucose monitors with accompanying iPhone apps, can send information to HealthKit.

"We're working quickly to have the bug fixed in a software update and have HealthKit apps available by the end of the month," a company spokesperson said in an email on Wednesday.

Apple has also pulled some healthcare apps from its app store that connect with HealthKit such as MyFitnessPal and Carrot Fit.

"The MyFitnessPal app, which supports integration with Apple's HealthKit, was temporarily removed from the Apple Store this morning to address some minor issues," MyFitnessPal said in a statement emailed to Reuters.

"We are working with Apple on a solution and will have an updated version of the app, without the HealthKit piece (for the time being), back on the app store shortly," the company said.

Health information service provider WebMD Health Corp said the new version of its app, which connected to HealthKit, was removed from the app store after being launched earlier on Wednesday.

"We have been in contact with Apple about this issue, and expect to see the previous version of our app (v 5.2) back in the store on a temporary basis," WebMD spokesman Adam Grossberg said in an email to Reuters.

While HealthKit promises to enhance the process of data-sharing between physicians and those under their care, observers have noted the potential for sensitive data to be abused.

Others are leery of having all their private information stored at one location, susceptible to hackers.

Apple on Wednesday released iOS 8 with new features and updates, just two days ahead of the release of two new iPhone versions showcased last week.

(Additional reporting by Supantha Mukherjee in Bangalore; Editing by Joyjeet Das)

TECHNOLOGY NEWS: Apple tries to assuage privacy fears, puts focus on security

10:42 No comments

(Reuters) - Apple Inc is making strong efforts to assuage users' fears after taking the heat in the celebrity photo leak scandal that emerged over the Labor Day weekend.

Apple CEO Tim Cook provided details of how the company handles users' personal information and reassured customers about Apple's commitment toward their privacy, in a letter published on its website. (http://www.apple.com/privacy/)

"We don't build a profile based on your email content or web browsing habits to sell to advertisers. We don't "monetize" the information you store on your iPhone or in iCloud. And we don't read your email or your messages to get information to market to you," Cook wrote in the letter.

Apple has never worked with any government agency to give access to its products, services and servers and would never do that in the future, Cook added.

After the leak of racy celebrity photos, cybersecurity experts and mobile developers called out inadequacies in Apple's and, more generally, cloud-services security.

Some security experts faulted Apple for failing to make its devices and software easier to secure through two-factor authentication, which requires a separate verification code after users log in initially.

Cook, in his letter, encouraged customers to use the two-step verification process and said it now protects all the data stored in iCloud along with protecting Apple ID account information.

Cook said users would get updates on privacy at the company at least once a year and about any significant change to its policies.

Last week, Apple unveiled a watch, two larger iPhones and a mobile payments service in an effort to revive the technology company's reputation as a wellspring of innovation.

(Reporting by Arnab Sen in Bangalore; Editing by Gopakumar Warrier)

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TECHNOLOGY NEWS: Amazon expands Kindle lineup, boosts price of basic e-reader

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NEW YORK (Reuters) - Amazon.com Inc ramped up its push into hardware on Wednesday with the debut of six new or upgraded devices, including a high-end $199 e-reader called the Kindle Voyage and its cheapest-ever touch-screen tablet.

The No. 1 U.S. online retailer also revamped its basic Kindle e-reader to include a touch screen. It will cost $79, about 15 percent more than the current basic model.

Other new devices unveiled on Wednesday are a $99 Kindle Fire HD tablet, which includes a smaller, six-inch screen as well as a tablet designed for kids that starts at $149. Amazon also upgraded its 7-inch and 8.9 inch Fire tablets.

All the upgraded and new devices start shipping in October.

The expanding Kindle lineup underscores Chief Executive Jeff Bezos' commitment to developing devices as a way to retain users and bolster its core business of retail and shopping.

This year alone, Amazon has launched a set-top box, a grocery ordering wand and a Fire smart phone, which debuted in July to lackluster reviews.

Amazon, which entered the hardware sector with the 2007 launch of the Kindle, has adopted a strategy of selling the devices at cost, and it profits when users buy content or goods.

It has been investing heavily in content, inking a deal this year to stream some HBO shows including "The Sopranos" and "The Wire" to members of its Prime subscription program.

"The vast majority of people are still using the tablets," David Limp, vice president of devices for Amazon, said during a briefing with reporters in New York.

Executives touted the Kindle Voyage as the thinnest device Amazon has ever made. The company hopes heavy readers might adopt the device, which more closely mimic a paper book.

The $79 Kindle is crucial to attract new users, particularly in markets like China, Japan and Germany, where e-readers are starting to gain traction, executives said.

(Writing by Deepa Seetharaman; Editing by Ken Wills)

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TECHNOLOGY Yelp, TinyCo fined by U.S. for improperly collecting kids' data

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WASHINGTON (Reuters) - The popular online review site Yelp and the maker of children's mobile device apps including Tiny Pets and Tiny Monsters have separately agreed to settle charges that they improperly collected kids' information online, the U.S. Federal Trade Commission said on Wednesday.

A U.S. law called the Children's Online Privacy Protection Act, or COPPA, requires that companies collecting information online about children under age 13 follow a number of steps to ensure that the children's information is protected.

Under the terms of the settlements, Yelp will pay a $450,000 civil penalty while privately held app developer TinyCo will pay a $300,000 civil penalty.

The FTC alleged that Yelp, between 2009 and 2013, collected personal information from children through the Yelp app without first notifying parents and obtaining their consent.

Several thousand registrants provided a date of birth showing they were under 13 years of age, and Yelp nonetheless collected information from them including name, e-mail address and location, as well as any information that they posted on the site, the agency said.

Yelp also agreed to delete information it collected from consumers who stated they were 13 years of age or younger at the time they registered for the service.

"When this problem was brought to our attention, we fixed it immediately and closed the affected users' accounts," Vince Sollitto, Yelp's vice president for communications, said in a blog post. Yelp "doesn't promote itself as a place for children," he added.

Attorney John Feldman at Reed Smith, who was not involved in the case but specializes in advertising issues, said the deciding factor for the FTC was not whether Yelp intended its registration process to act as an age filter.

"The lesson for companies is that where they ask for and get information within the registration process to know whether a user is under-age, the FTC will deem them to have 'actual knowledge' that kids are providing personal information," Feldman said.

Yelp shares were up 0.3 percent in afternoon trading at $76.79.

The FTC's complaint against TinyCo alleged that the company targeted young children with many of its apps featuring brightly colored animated characters, which made it subject to the COPPA rule.

Many of those apps, which have been downloaded more than 34 million tonnes, included an optional feature that collected e-mail addresses from users, including children younger than age 13.

(Reporting by Ros Krasny; Editing by Susan Heavey, Will Dunham and Cynthia Osterman)

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TECHNOLOGY News Corp's Robert Thomson asks European regulators to reconsider Google settlement

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(Reuters) - News Corp Chief Executive Robert Thomson has urged European regulators to reconsider their settlement with Google Inc over its search practices, calling the Internet company an "egregious" aggregator and a "platform of piracy."

In a letter last week to European Commissioner for Competition Joaquín Almunia, Thomson said Google was "willing to exploit its dominant market position to stifle competition" and that the vision of Google's founders had been replaced by a "cynical management". News Corp issued a statement on Tuesday regarding the letter.

Google has been the target of a European Commission investigation since November 2010, when more than a dozen complainants, including Microsoft Corp, accused the company of promoting its own services at their expense.

The settlement, which would allow Google to avoid a fine of up to $5 billion, would require the world's top Internet search engine to display rivals' links more prominently. Google reached this deal with the antitrust chief in February, but might have to come up with additional concessions to rivals.

"Your decision to reconsider Google's settlement offer comes at a crucial moment in the history of the free flow of information and of a healthy media in Europe and beyond," Thomson wrote.

Google was not immediately available for comment.

Rupert Murdoch's News Corp has interests in Europe, including The Times, The Sun and The Wall Street Journal Europe, a network of local language business newswires, and the HarperCollins book publishing business.

Thomson said News Corp used Google products and partnered with the company on various of its projects, "but our cherished content is vulnerable to exploitation."

Almunia, the outgoing antitrust chief, said in May he wanted to close the case against the world's most popular Internet search engine before the end of his five-year term, but he announced last week that he would not be able to do so before he stands down next month.

Almunia's successor, former Danish economy minister Margrethe Vestager, who takes up her post in November, will now have to decide whether to continue settlement talks with Google, charge the company or drop the case.

(Reporting by Shailaja Sharma in Bangalore)

TOP NEWS India to hold talks with China on civil nuclear cooperation

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NEW DELHI (Reuters) - India will open talks on civil nuclear energy cooperation with China, Prime Minister Narendra Modi said on Thursday after summit talks with Chinese President Xi Jinping in New Delhi.

The announcement, part of the new government's push to broaden its nuclear energy sector, comes on the heels of a deal India struck this month to buy uranium from Australia to increase its fuel supplies.

"We will begin the process of discussions on civil nuclear energy cooperation that will bolster our broader cooperation on energy security," Modi said in a statement, with Xi beside him, at a news conference.

Ahead of Xi's visit, Chinese Assistant Foreign Minister Liu Jianchao told reporters that China had a "positive attitude" towards nuclear cooperation with India, but offered no details.

Behind the scenes, China has been pressing India hard to begin talks on civil nuclear cooperation, said W.P.S. Sidhu, a senior fellow at Brookings India.

Any deal for India to buy civil nuclear reactors from China may take years, but both countries benefit by starting the conversation, said Sidhu.

"It's a way for India to explore other options," he said.

Washington signed a civil nuclear agreement with New Delhi in 2008 allowing India to import U.S. nuclear fuel and technology without giving up its military nuclear program, but progress on bringing U.S. companies into India has been halting.

(Reporting by Krista Mahr; Additional reporting by Ben Blanchard in BEIJING; Editing by John Chalmers and Nick Macfie)

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TOP NEWS China's Xi pledges greater market access for Indian business

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NEW DELHI (Reuters) - Chinese President Xi Jinping pledged on Thursday to give Indian companies and products - especially including those made by the pharmaceutical, farming and fuel industries - greater access to Chinese markets.

Jinping made the pledge at a joint press conference with Indian Prime Minister Narendra Modi held in New Delhi.

(Reporting by Rajesh Kumar Singh; editing by Malini Menon)

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TOP NEWS Tennis star Andy Murray backs Scottish independence

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LONDON (Reuters) - British tennis star Andy Murray came out in support of Scottish independence on Thursday, just hours before millions of his fellow Scots voted in a referendum on whether to end the 307-year union with England.

Murray, who has no vote himself as he lives near London, had previously refused to be drawn one way or the other on whether he backed secession, but his previous remarks on the issue had suggested he supported the union.

"Huge day for Scotland today! no campaign negativity last few days totally swayed my view on it. excited to see the outcome. lets do this!" he wrote on his Twitter feed.

In June Murray said he disliked a stunt by nationalist leader Alex Salmond who waved the Scottish flag after his Wimbledon victory last year.

Salmond held up Scotland's blue and white flag, the Saltire, behind British Prime Minister David Cameron's head as the crowd celebrated Murray's historic Wimbledon victory in July 2013.

"I started competing for Great Britain when I was 11. A lot of people forget that," said Murray.

Murray has tried not to air any political views after being slated before the 2006 World Cup when he said he'd support anyone but England, a remark he has said many times since was not serious.

(Reporting by Michael Holden; Editing by Guy Faulconbridge and Will Waterman)

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TOP NEWS India, China sign five-year trade and economic co-operation pact

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NEW DELHI (Reuters) - India and China have signed a 5-year trade and economic co-operation pact, an Indian government official said on Thursday during a visit by the Chinese President Xi Jinping to meet Indian Prime Minister Narendra Modi in New Delhi.

The two nations also signed a railway co-operation pact, the official said.

(Reporting by Tommy Wilkes; Editing by Douglas Busvine)

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TOP NEWS India's Modi: Border peace needed to realise China ties

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NEW DELHI (Reuters) - Indian Prime Minister Narendra Modi said on Thursday that peace on the border with China was vital to developing relations, as a standoff between troops on their disputed border overshadowed a visit by President Xi Jinping.

"There should be peace in our relations and in the borders. If this happense we can realise the true potential of our relations," Modi told a joint news conference with Xi, shortly after reports that soldiers on both sides had pulled back.

(Reporting by Douglas Busvine; Editing by Frank Jack Daniel)

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TOP NEWS Support for Scotland staying in United Kingdom at 53 percent: Ipsos

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LONDON (Reuters) - Supporters of keeping Scotland within the United Kingdom held a 6 percentage-point lead in a final independence opinion poll which was published as voters were taking part in the referendum on whether Scotland should break the 307-year-old union.

The Ipsos Mori poll for the London Evening Standard newspaper put support for staying within the UK at 53 percent, with support for independence at 47 percent. It said four percent of Scots who were certain to vote were still undecided.

Scots were voting in the referendum on Thursday, with the result expected to come early Friday morning.

(Reporting by Kate Holton; editing by William Schomberg)

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TOP NEWS China's Xi says determined to settle India border issue

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NEW DELHI (Reuters) - China is determined to bridge differences over its shared border with India, President Xi Jinping said on Thursday, adding that both sides were capable of dealing with fallout from security incidents on the disputed frontier.

"China has the determination to work with India through friendly consultation to settle the boundary question at an early date," Xi said after summit talks with Indian Prime Minister Narendra Modi in New Delhi.

"We also have the sincerity to work with India to maintain peace and tranquility in the border areas before we are finally able to settle the boundary question."

Xi also said China would support India becoming a full member of the Shanghai Cooperation Organization (SCO) - a regional security body whose largest members are China and Russia.

China's Foreign Ministry said in a statement released in Beijing that China welcomed both India and its great regional rival, Pakistan, joining the SCO.

"We welcome and support India and Pakistan to formally become new members of the SCO as early as possible," the ministry said.

Their admission would boost the group's ability to maintain regional security, it added, without saying when they might join.

Pakistan is China's most important ally in South Asia, though Xi had to cancel a trip on his current swing through the region due to ongoing unrest there.

China, Russia and four Central Asian nations - Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan - formed the SCO in 2001 as a regional security bloc to fight threats posed by radical Islam and drug trafficking from neighboring Afghanistan.

(Reporting by Aditya Kalra; Additional reporting by Ben Blanchard in Beijing; Writing by Douglas Busvine; Editing by Frank Jack Daniel and Nick Macfie)

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TOP NEWS China house prices fall for fourth straight month as downtrend deepens

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BEIJING (Reuters) - China's new home prices fell in August for a fourth straight month and declines spread to a record number of cities, underlining a deepening downtrend in the property market that is increasingly weighing on the broader economy.

News of the fall in prices coincided with reports that China's central bank had injected 500 billion yuan ($81 billion) into big state-owned banks to keep cash flowing in the system and bring down borrowing costs, adding to speculation over whether Beijing was stepping up its efforts to stimulate activity as the economy loses momentum.

Average new home prices across China fell 1.1 percent last month, a faster decline than the 0.9 percent drop seen in July, according to the Reuters weighted home price index, which was calculated from data issued by the National Bureau of Statistics on Thursday.

The string of monthly price declines is now close to wiping out gains seen over the last year, which could further weaken buying interest and dampen consumer confidence. Compared to a year ago, new home prices were up just 0.5 percent in August, easing from the previous month's 2.5 percent gain and the slowest annual growth in 20 months.

The worst performance was in the eastern city of Hangzhou, where prices sagged 2 percent in August from July and dropped 5.4 percent from a year ago.

"Home prices are likely to drop further in coming months as developers need to offer deeper price cuts to attract home buyers to enter the market," said Lin Bo, vice-head of research at China Real Estate Information Corp, a property data provider, in Shanghai.

"Compared to a year ago, we expect prices to go negative by the end of this year or earlier next year."

In the last downturn in early 2012, China started to see year-on-year house price falls after five consecutive monthly drops. Some economists believe the current slump could last much longer given far higher inventories of unsold homes.

Developers will face intensive competition in September and October with more new developments launched in the traditional peak season, analysts said.

Moody's Investors Service said on Wednesday that developers' profit margins are expected to continue to be weak, as China's property prices are likely to remain under pressure for the rest of the year with strong supply from new projects in second-half 2014.

Real estate, which directly impacts around 40 other business sectors in China, was seen as a heavy brake on economic activity in official data out last weekend showing factory output growing at its slackest pace in six years in August.

The slowdown in the housing market coincides with other August data which show China's economic growth appearing to hit a soft patch after a bounce in June.

PRICES DROP IN MOST CITIES

The NBS data showed new home prices fell in 68 of the 70 major cites it monitors, up from 64 cities in July.

"Home prices dropped on a monthly basis in most cities in August, but some of them saw easing price falls," said Liu Jianwei, a senior statistician at the National Bureau of Statistics (NBS), said in a statement accompanying the data.

Prices slipped 0.9 percent from July in Beijing, easing from a month-on-month drop of 1.0 percent in July, while Shanghai prices fell 1.1 percent from July, the fourth month-on-month fall in a row - though not as fast as a decline of 1.2 percent in July.

Price declines deepened on a monthly basis in smaller cities, including the eastern city of Jinhua, where home prices fell 1.7 percent, accelerating from a drop of 0.8 percent in July.

Official transaction data showed sale numbers picking up slightly in August from July. Industry observers believe the downturn could persist in coming months because of high inventories and pessimistic market sentiment.

NBS data last weekend showed the floor area of property sold rose 5 percent in August from July, though the floor area sold was still 12.4 percent down from a year ago.

After a strong performance in 2013, China's real estate market softened as sales slowed and banks have become increasingly cautious about lending to developers and home-buyers.

In the face of sluggish sales, China Vanke (000002.SZ)2022.HK, the country's largest residential developer, has teamed up with Taobao, the Alibaba-owned online shopping site, to offer discounts of as much as 2 million yuan ($325,000) to customers who buy property on the eBay-like site.

More than 30 local governments, which earn a large part of their revenues from selling state land, have acted to support the troubled property sector by easing restrictions on home purchases in recent months.

Sources told Reuters earlier this month that authorities are relaxing financing rules, allowing approved listed property firms to sell medium-term notes in the interbank market.

(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Eric Meijer)

TOP NEWS Newspapers mark Scotland's historic day with Burns and banners

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EDINBURGH (Reuters) - With special front pages featuring flags and quotes from poet Robert Burns, Scottish and English newspapers caught the drama and sense of history surrounding Scotland's independence referendum on Thursday.

Most had cleared all other news from the front page.

The Daily Telegraph had a full-page photograph showing two men holding the blue and white Scottish Saltire and the red, white and blue Union Jack. Its only words were a quote from Burns: "Be Britain still to Britain true, amang ourselves united".

The Times featured a wrap around cover of the Union Jack. It said simply "D-Day for the Union" on the front and lines from Burns' "Auld Lang Syne" - "should auld acquaintance be forgot?" – were printed on the back.

The Financial Times headline read: "Beauty and terror leave Scots on the rack – and the brink of history". Its photograph showed the Scottish flag flying against a background of gray clouds.

Both the Scotsman and the Guardian chose "Day of Destiny" as their banner headline. The Guardian front page was taken up by a satellite map of Scotland, while the Edinburgh newspaper had a photograph of the entrance of the central counting center in the Scottish capital.

The Dundee newspaper, the Courier, also featured a map of the country filled with selfie photographs. "Make your Mark," it urged Scots.

The Scottish Sun said "Yes or no - Scotland starts with blank page" and showed a montage of six hands holding pens over a white sheet of paper. The masthead had the union flag on one side and the Saltire on the other.

The Daily Record said "Choose Well Scotland" and also quoted Burns – "that man for man the world o'er shall brothers be for a' that". On one side was a photo of a boy holding a "Yes" sign, on the other a girl holding a "No" sign.

The Independent showed a photograph of a hand holding the two flags. Its headline read "The 307-year-old itch".

The Herald said "Scotland's Day of Reckoning". It featured a panoramic view of mist-covered hills and a loch, with a lone figure overlooking them.

(Reporting by Angus MacSwan, editing by Anna Willard)

TOP NEWS As Xi visits India, Dalai Lama raises China border woes

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NEW DELHI/MUMBAI (Reuters) - Tibet's exiled spiritual leader said on Thursday that an unsettled border with China encompassing large parts of the Tibetan plateau was a problem for India and called for talks to resolve the dispute as Chinese President Xi Jinping toured India.

The Dalai Lama's remarks in Mumbai came as Indian and Chinese troops were locked in a standoff in a barren western stretch of the Himalayas, souring the goodwill around Xi's trip, which China later said had been brought under control.

The Indian army said on Thursday it was an "ongoing situation" and refused give details after 334 such incidents recorded from the beginning of the year until August along both the eastern and western parts of the 3,500-km (2,200-mile) border.

"Actually the Tibetan problem (is) also (a) problem of India. Before 1950, you see the whole northern border, really peaceful, no single soldier. So India's problem," the Dalai Lama, who lives in exile in northern India, told reporters.

"So sooner or later you have to solve these problems, not by force but by understanding and talk. Understanding comes through talk, only through personal contact."

China, which regards the Dalai Lama as a "splittist", or separatist, has ruled Tibet with an iron fist since Communist troops marched in in 1950 and regularly applies diplomatic pressure on countries to crack down on the activities of Tibetans.

But the Tibetan leader says he only seeks greater autonomy for his homeland which he fled after a failed uprising in 1959 and on Thursday urged Xi to learn from India's democratic experience.

"I think the Chinese president should learn some of India's experience. Look, east India, south India, west India, north India, different language, different script. But no danger of separation. Isn't it? Democratic rule, rule of law and free media..." he said.

Groups of Tibetan activists held noisy protests outside the hotel where Xi was staying in New Delhi and at the stately Hyderabad House where he sat down for formal talks with Indian Prime Minister Narendra Modi.

About 20 women shouting anti-China slogans ran past the police lines outside the building while an activist carrying the Tibetan flag climbed a flagpole in another part of Delhi. Police dragged several activists away.

India and China fought a brief border war in 1962. Since the late 1980s they have held several rounds of talks to settle their border but are no closer to a solution.

(Editing by John Chalmers and Nick Macfie)

TOP NEWS Nuclear deal elusive as Iran, six powers resume talks in New York

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UNITED NATIONS (Reuters) - A diplomatic breakthrough is unlikely on a nuclear deal to end sanctions against Iran when talks resume in New York this week between Tehran and six world powers deadlocked after a year of negotiations.

The talks between Iran and the United States, Britain, France, Germany, Russia and China are re-starting after a two-month hiatus and amid Washington and Tehran ruling out cooperation on fighting Islamic State militants who have taken over swaths of Iraq and Syria.

Iranian Foreign Minister Mohammad Javad Zarif and European Union foreign policy chief Catherine Ashton will discuss the negotiations on a long-term nuclear deal over lunch on Thursday, diplomats said. The EU has been a kind of interlocutor for the six powers.

Diplomats from the six countries will begin meeting among themselves on Thursday before they all sit down with the Iranian delegation on Friday. The negotiations are expected to run until at least Sept. 26 on the sidelines of next week's annual gathering of world leaders at the United Nations General Assembly.

Ahead of the formal negotiations, U.S. Deputy Secretary of State William J. Burns and Under Secretary of State for Political Affairs Wendy Sherman - the number 2 and 3 diplomats at the State Department - will hold bilateral talks with Iranian officials on Thursday and Friday, the State Department said.

"The talks are going to be on the nuclear issue. At times other topics have come up on the sidelines, but that's not the purpose or the intent, as is always the case," a U.S. official said on condition of anonymity about the bilateral talks.

U.S. and Iranian officials discussed the crisis in Iraq on the sidelines of the Vienna nuclear talks in June, though they have ruled out cooperating with each other on dealing with the threat posed by Islamic State in the region.

Sherman, who heads the U.S. delegation, said in a speech at Georgetown University on Tuesday that more movement from Iran will be needed to secure a long-term agreement.

"We can say on the positive side that our talks have been serious and that we have identified potential answers to some key questions," Sherman said. She also said "we remain far apart on other core issues, including the size and scope of Iran's uranium enrichment capacity."

Iran denies Western allegations that it is refining uranium to develop the capability to assemble nuclear weapons, saying it is doing it to help generate electricity.

The United States and its allies have in recent years imposed ever tighter financial and others sanctions on Iran, a major oil producer, to make it scale back its nuclear program.

CENTRIFUGE CAPACITY

Western governments want Iran to have a centrifuge capacity in the low, single-digit thousands so that it would take Tehran a long time to use the machines to purify enough uranium to fuel an atomic weapon. Tehran has rejected demands to significantly reduce the number below the more than 19,000 it has now installed, of which roughly half are operating.

Zarif, speaking at the Council on Foreign Relations in New York, complained about what he described as unreasonable demands by Western powers in the nuclear talks but added that Tehran was committed to resolving the decade-long nuclear stand.

"We are committed to resolving this issue, we want to resolve this issue," he said, though he said later that Iran is "totally distrustful of the United States".

Iran, diplomats close to the talks said, appears unwilling to reduce the number of its centrifuges to below 10,000.

But that would be an unacceptable for the six powers, who diplomats say are aiming to have a deal in place that leaves Iran in a position where it would need at least one year to produce enough high enriched uranium for a single bomb - the so-called "breakout" capacity.

"On the question of enrichment we have practically made no progress," a senior Western diplomat said. "The six want that in case the agreement is broken and the nuclear activities restart towards a military objective, that we have a breakout capacity of a year."

Diplomats said a breakthrough in the New York negotiations was unlikely.

"Things remain blocked," the senior Western diplomat said. "New York will be vital to see if we can break the impasse."

Depending on how the negotiations among senior foreign ministry officials go in the coming days, another Western diplomat said foreign ministers might join the talks late next week "if good progress is being made or if there's a blockage."

Talks between Iran and the six were formally started during last year's General Assembly, when Zarif and U.S. Secretary of State John Kerry sat side-by-side during a special side meeting. Last November in Geneva, Iran and the six reached an interim agreement under which Tehran won some easing of sanctions in return for halting its most sensitive nuclear work.

But they failed to meet a July 20 target for a comprehensive agreement under which Iran would further curb its atomic activities in exchange for a gradual lifting of sanctions, and they set a new deadline of Nov. 24.

(Additional reporting by Michelle Nichols at the United Nations, Lesley Wroughton and Arshad Mohammed in Washington, Luke Baker in Jerusalem and John Irish in Paris; Editing by Grant McCool and Andrew Hay)

TECHNOLOGY Silicon Valley provocateur Thiel takes on 'many-sided mediocrity'

05:23 No comments

SAN FRANCISCO (Reuters) - Forget striving for a well-rounded resume.

According to a new book from Peter Thiel, the investor and PayPal co-founder, well-roundedness amounts to "many-sided mediocrity." Instead, his "Zero to One" urges entrepreneurs to "focus relentlessly on one thing you're good at doing."

And yet this very readable and provocative book by Thiel, a Stanford graduate with a degree in philosophy, draws on sources from Shakespeare to Roman history to Lady Gaga and amounts to a testament to the value of generalization.

Given his success founding a payments company, launching three well-known investment firms, and now writing a bestselling book, the same could be said for Thiel.

And it turns out his views on well-roundedness are more nuanced than they may first appear.

"I come out against doing a scattered set of disconnected activities, which is what kids are encouraged to do to get into top universities," said Thiel in an interview on Wednesday. He funds a fellowship that gives $100,000 grants to youngsters, from high school age to 23, who forgo school or drop out to pursue a project.

"Good entrepreneurs have a fairly broad understanding of markets and fields," he said, arguing that is not at odds with his book's position that a good entrepreneur determines the one best thing to do and then does it.

"Zero to One" is an example of how the most respected start-up investors, often little known outside Silicon Valley, wield influence that is based as much in their creative thinking as in the big checks they write.

While others in the group, such as venture capitalists Marc Andreessen and Bill Gurley, regularly share their wisdom over blogs and Twitter, Thiel has until now held back.

His first tweet, a link to the Amazon listing for the new book, went out earlier this month.

"Zero to one tweets," he joked when asked about his Twitter background.

"I'm always uncomfortable throwing ideas out there that are half baked," he added.

But that doesn't mean he's uncomfortable throwing out ideas about Twitter. On his book tour, he told CNBC that the service was mismanaged and its executives probably smoked a lot of pot.

In a subsequent interview with Reuters, he said he meant Twitter executives have not developed the product as well as they should.

"One always has the sense there's potential being missed," he said.

Twitter Chief Executive Dick Costolo came up with his own tongue-in-cheek retort.

"Working my way through a giant bag of Doritos," he tweeted in an exchange with Jason Goldman, an early employee at Twitter. "I'll catch up with you later."

In his book, Thiel takes on capitalism's obsession with competition—he prefers monopolies, defined as finding an untapped market.

"Zero to one" refers to starting something from scratch, going from nothing to something, which he says is more challenging and much more important than refining an existing idea.

He also disparages Silicon Valley's obsession with disruption, which he writes has become "a self-congratulatory buzzword for anything trendy." More disturbingly, he argues, it encourages entrepreneurs to define themselves against existing companies, rather than thinking in big, fresh ways.

Thiel plays down the role that chance and background play in individual success, urging readers to take control of their destiny. "You are not a lottery ticket," he writes.

But many of the examples he throws out of entrepreneurs who have done the best job of harnessing success, including Jeff Bezos, Bill Gates, and Warren Buffett, belie that point of view. They typically hail from comfortable backgrounds that provided strong educations and easy connections with those who helped them make their marks.

"It's true that already successful people have an easier time doing new things," he allows in the book.

(Reporting by Sarah McBride, editing by Peter Henderson)

TOP NEWS Netherlands may contribute F-16 fighter planes to counter IS: report

05:23 No comments

AMSTERDAM (Reuters) - The Netherlands will consider contributing F-16 fighter jets to help counter the Islamic State group, a Dutch daily said on Thursday, but the government said any decision on action must await planning consultations with the United States.

The Trouw newspaper, citing government sources, said the Netherlands would contribute an unspecified number of F-16 fighter jets to air strikes against insurgent targets in Iraq and possibly Syria.

"We don't rule out anything, but there's no question of taking a decision yet," defense minister Jeanine Hennis-Plasschaert told reporters. "The military planning is under way and that takes time."

Defense Ministry spokesman Jos van der Leij said the Netherlands had contributed personnel to planning at U.S. Central Command in Tampa, Florida.

The Islamic State group has seized swathes of territory in Syria and Iraq and is accused by international organizations of carrying out massacres of civilians. The United States has launched air strikes against some IS targets and is attempting to forge an international coalition to counter the group.

The Netherlands was not among the nations approached by U.S. President Barack Obama at a NATO meeting in Wales earlier this month, when he was seeking to build a coalition of allies against the hardline Islamic offshoot of al Qaeda.

The Dutch contribution, to be discussed at a weekly Cabinet meeting of Prime Minister Mark Rutte's government on Friday, must also be approved by a majority in the 150-seat parliament.

Trouw reported that the parties needed to win enough votes in the legislature were behind the mission.

Dutch official said in August the Netherlands would consider providing arms, but gave no additional details.

(Reporting by Thomas Escritt and Anthony Deutsch; Editing by Catherine Evans)

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TOP NEWS China's house prices fall further, economic gloom deepens

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BEIJING/SHANGHAI (Reuters) - Worries that China's economy may be slowing further intensified on Thursday as data showed home prices fell for the fourth straight month, adding to expectations that Beijing will need to do more to stimulate activity.

For now, policy easing is likely to come in the form of help to the most vulnerable sectors, rather than more aggressive steps such as cutting interest rates, but authorities are ready to step in with bolder measures if unemployment rises, policy insiders told Reuters.

China's central bank reportedly stepped in this week to avert any further shocks to the world's second-largest economy.

The People's Bank of China offered to lend $81 billion to big banks to reduce the risk of a credit crunch and a jump in interest rates heading into the long "Golden Week" holidays in early October, when demand for cash typically soars.

Despite the move, short-term lending rates dipped only briefly on Thursday, and traders said borrowing costs will start to rise again soon unless the PBOC continues to pump money into the system, highlighting growing nervousness in the market.

"Chinese authorities will likely introduce more supportive policies, including favorable tax and mortgage policies, before the end of this year to ease the downward pressures on the property market," ANZ economists Liu Li-Gang and Zhou Hao said.

"We thus expect more monetary policy easing in the remainder of this year, if the upcoming data continue to remain lukewarm. We cannot discount the possibility of an outright 50 basis point RRR cut (in bank reserve levels) for the whole banking system, or even a policy rate cut."

Analysts at Barclays were even more certain that policymakers will have to administer stronger medicine soon.

"Interest rate cuts are inevitable," they said in a note to clients, adding that the central bank's decision to lower the yield for its 14-day repos by 20 basis points on Thursday was a sign of the times.

"Today's move sends a clear and strong signal, in our view, that the People's Bank of China is more convinced that it needs to make more effort to guide interest rates lower," Barclays said. It predicted two interest rate cuts of 25 basis points each between October and March 2015.

Lower rates could arrest the cooldown in China's once red-hot property market, where fizzling growth is increasingly dragging on the broader economy, sapping demand for housing-related products from appliances and furniture to cement and steel.

Average new home prices across China fell 1.1 percent in August from July, accelerating from last month's 0.9 percent drop, according to a Reuters weighted home price index calculated from official figures.

Price falls spread to a record number of cities, and further declines are expected as cash-hungry developers cut asking prices and offer bigger discounts to attract buyers. Some economists think the slide will persist well into next year, citing huge inventories of unsold homes.

Four consecutive months of declines in home prices has left China's housing market close to wiping out its gains over the last year, a trend that could further hurt consumer confidence.

The property market accounts for roughly 15 percent of the economy.

"The softness in real estate investment will remain one of the major drags on economic growth," said Zhu Haibin, an economist at JPMorgan.

China's economy has had a bumpy ride this year. A bounce in growth in the second quarter was cut short in July, and data suggest the cooldown may have deepened since.

Stimulus measures announced earlier in the year already appear to be losing their punch.

Growth in factory output slid to a six-year low in August and import demand fell unexpectedly for the second month.

"SO MUCH MONEY"

In addition to government moves to accelerate spending, the PBOC has taken several steps this year to ensure ample liquidity and encourage increasingly risk-averse banks to continue lending at reasonable rates. Many banks still prefer to lend to state-owned firms, starving private companies of capital.

The central bank has declined to comment on the move to inject liquidity into the country's top five banks, via a policy tool known as the Standing Lending Facility, or SLF.

As the SLF is only valid for three months and requires commercial banks to pay for its use, analysts are divided about its impact on the real economy, while acknowledging it gave at least a short-term psychological boost to money markets, where banks lend to each other.

"Our bank is busy this morning lending with so much money in the market now," said one trader at a Chinese commercial bank in Shanghai, following reports that the central bank was offering to inject more money into the system.

Some argue that the extra funds were intended to help banks meet higher demand for cash at the end of each quarter, especially ahead of the long holiday. A flurry of stock market initial public offerings (IPOs) in coming weeks had been expected to amplify those seasonal stresses this year.

Short-term rates stabilized on Thursday, with the seven-day repurchase agreement rate little changed on the day. For the year, the rate has dropped 155 basis points since Dec. 30, though many economists are doubtful that longer-term borrowers are seeing any relief.

Publicly, central bank officials and advisers said China is not poised to unveil any dramatic stimulus to boost its economy.

"The central bank is erring on the side of caution by offering more than it usually would," said the analysts at Capital Economics, in reference to the latest liquidity move.

"Many have been forecasting a turn to broad stimulus in China for some time. The central bank's injection of liquidity has not changed our view that this remains wishful thinking," they said.

The government's bottom line is stable employment and no widespread debt defaults. Under that scenario, growth of 7.3-7.4 percent this year is seen as acceptable, sources said. Beijing's official target is around 7.5 percent.

(Reporting by Shao Xiaoyi in BEIJING and Lu Jianxin in SHANGHAI; Writing by Koh Gui Qing in BEIJING)

TOP NEWS House votes to arm Syrian rebels

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WASHINGTON (Reuters) - The U.S. House of Representatives approved President Barack Obama's plan on Wednesday to train and arm moderate Syrian rebels, but questions remain over whether it will give them the advanced weapons they say they need to defeat Islamic State militants.

The House voted 273-to-156 to authorize the plan, a test of support for Obama's stepped-up campaign to "degrade and destroy" Islamic State fighters who have seized a third of both Iraq and Syria, declared war on the West and seek to establish a caliphate in the heart of the Middle East.

Written as an amendment to a stopgap spending bill, the measure does not include any money to pay for the arms and training. It passed with support from Democrats and Republicans, but also significant opposition from members of both parties.

Voting for the amendment were 159 Republicans and 114 Democrats, while 71 Republicans and 85 Democrats voted against.

The spending bill - including the training plan - will only go to Obama to be signed into law after it passes the Senate, expected to come as early as Thursday.

Facing resistance from war-weary lawmakers in Obama's own Democratic party, the administration reached across the aisle to Republicans for support, a rare bipartisan moment in an otherwise polarized Congress.

At an annual picnic for congressional members he hosted on Wednesday night, Obama thanked House members from both parties "who came together today to pass an important component of our strategy for dealing with this terrible terrorist organization."

A Reuters/Ipsos poll showed that while Americans support Obama's campaign of air strikes against Islamic State militants, they largely oppose a long military campaign against the group.

The authorization backed by the House lasts only until Dec. 11, the day the spending bill expires. The bill allows the Pentagon to later submit requests to shift funds within the budget if it decides it needs funds to pay for the program.

The amendment does not provide details about the training plan, prompting lawmakers to fear that a "yes" vote could mean authorizing shipments of military equipment that might end up in the wrong hands and possibly even kill Americans.

'UNANSWERED QUESTIONS'

"There are too many unanswered questions for me to support this amendment," said Representative Barbara Lee, a California Democrat. "How will we ensure that the United States weapons we are providing to Syrian rebels will not get into the wrong hands, as they did with the rebels we supported in Libya?"

The amendment does not include $500 million the White House says it needs to arm and train the rebels, who have been waging a three-year battle against Syrian President Bashar al-Assad. It was written to quickly provide the authority Obama wanted while avoiding a debate on the money.

Oubai Shahbandar, a senior adviser to the Syrian National Coalition, a Western-backed political opposition body, called the House vote "an important step forward" in establishing a partnership between Washington and the Syrian opposition.

"We worked hard to make the case that the Free Syrian Army is the sole solution to degrading and defeating ISIS. We have a long road ahead, but the overwhelming support in Congress for our cause is encouraging," he told Reuters in Istanbul.

Obama said in a nationally televised speech last week that he wanted to train and equip Free Syrian Army rebels to "strengthen the opposition as the best counterweight to the extremists" and to prevent U.S. troops from "being dragged into another ground war."

Fears of a deeper U.S. troop involvement were fanned on Tuesday by General Martin Dempsey, chairman of the U.S. military's Joint Chiefs of Staff, who raised the possibility that American troops might need to take on a larger role in Iraq's ground war.

Defense officials have said they expect to recruit and train about 5,000 of the moderate rebel fighters.

U.S. military officials say there is support within the Pentagon for supplying the rebels with weapons beyond small arms and ammunition, including battlefield artillery, anti-tank rockets and mortars.

Republican Representative Tom Cole of Oklahoma, a member of the House Defense appropriations subcommittee, said the program could start with small arms and then possibly graduate to heavier weapons, such as "armored personnel carriers, artillery, real air defense capability" but declined to say whether such plans had been discussed in classified briefings.

(Additional reporting by David Lawder and Krista Hughes in Washington and Dasha Afanasieva in Istanbul; Editing by Jason Szep and Howard Goller)

TOP NEWS U.S. advisers may take forward positions in Iraq fighting

04:20 No comments

MACDILL AIR FORCE BASE Fla. (Reuters) - Some U.S. military advisers could end up in front-line positions in the fight against Islamic State militants, the White House said on Wednesday, although President Barack Obama vowed that America would not fight another ground war in Iraq.

The House of Representatives gave a green light to a key plank of Obama's strategy against Islamic State, approving authorization for the Pentagon to train and arm moderate Syrian rebels to fight the radical Islamist militants. The legislation now goes to the Senate.

Obama, who has spent much of his presidency distancing himself from the Iraq War, stressed that air strikes would be the central U.S. contribution to the fight against Islamic State in Iraq and Syria, along with coordinating a coalition that he said now includes more than 40 countries.

"I want to be clear. The American forces that have been deployed to Iraq do not and will not have a combat mission," Obama said in a speech at MacDill Air Force Base in Tampa.

His spokesman Josh Earnest said some U.S. military advisers could be deployed to forward positions to help direct Iraqi security forces and call in air strikes, but said they would "not be personally or directly engaging the enemy."

The possibility of U.S. soldiers operating in forward positions with local forces raised concerns that Washington, which withdrew its forces from Baghdad in 2011 after eight years of conflict, could once again be drawn into a bigger engagement.

On Tuesday General Martin Dempsey, chairman of the U.S. military's Joint Chiefs of Staff, had raised the possibility of such eventual forward deployments during a committee hearing.

NO U.S. GROUND WAR

"If General Dempsey determined that it may be necessary to forward deploy some of the American advisers, then he will bring that option to the president, and the president said that he would consider it on a case by case basis," Earnest told reporters traveling with Obama on Air Force One.

The House of Representatives approved the measure authorizing the Syrian rebel training plan despite some resistance from Republicans and Democrats, some of whom expressed concern about being sucked back into war in Iraq.

The Senate is expected to also pass the authorization by the end of the week. It will last until Dec. 11.

Lawmakers of both parties voiced skepticism about the White House strategy when they questioned one of its key architects, Secretary of State John Kerry. Members of the Foreign Relations Committee raised doubts about the ability of local Iraqi and Syrian forces to fight Islamic State and questioned whether Obama had the legal authority to carry out a lengthy operation.

The United States has launched more than 160 air strikes against Islamic State targets in Iraq and Obama has authorized similar attacks against the group's strongholds in Syria.

More than 1,600 American advisers have been dispatched to help Iraqi forces but Obama does not want them to get involved in ground combat to avoid a repeat of the Iraq war begun by his Republican predecessor, George W. Bush.

In testimony to a Senate committee, Dempsey had outlined scenarios in which he might recommend having U.S. troops do more, potentially accompanying Iraqis during complicated offensives, such as a battle to retake the northern city of Mosul from Islamic State fighters.

LIMITS OF AIR POWER

Former Defense Secretary Robert Gates told CBS's "This Morning" that Dempsey's remark made sense because air power alone has its limitations. "The reality is they're not going be able to be successful against ISIS strictly from the air," he said, using an acronym for Islamic State.

Obama was to meet his top national security advisers at the White House later on Wednesday to discuss a meeting of leaders at the U.N. General Assembly next week on how to get control of foreign fighters who have sworn allegiance to Islamic State and could return to their home countries to attack civilians.

The FBI director and the heads of the Department of Homeland Security and the National Counter terrorism Center said that people radicalized by online propaganda from Islamic State and other groups posed the main terrorist threat to America.

They told a congressional committee that while there was no evidence that Islamic State planned an attack on American soil, its vigorous propaganda and sophisticated online recruitment efforts created a clear potential threat.

(Additional reporting by Roberta Rampton, Patricia Zengerle and David Lawder; Writing by Steve Holland; Editing by David Storey and Howard Goller)

TOP NEWS As growth stalls, G20 seeks closure on regulations

04:20 No comments

SYDNEY (Reuters) - G20 host Australia is leading a push to draw a line under the global financial crisis, urging the group of top economies to swiftly finalize regulations aimed at preventing a repeat of the crash and focus on measures to revive sputtering global growth.

But the efforts of the Group of 20 finance ministers and central bankers, meeting this weekend in the tropical tourist town of Cairns, risk being drowned out by growing alarm over geopolitical tensions and increased market volatility.

"They will do so against a backdrop of downgraded OECD growth forecasts and a deteriorating global political climate," said London-based Lena Komileva, chief economist at G+ Economics.

Indeed, headlines from the G20 will vie with any fallout from Scotland's independence vote on Thursday and ongoing U.S. interest rate speculation that has driven the dollar to six-year highs against the yen.

At home, a sweeping counter-terrorism operation across several major Australian cities on Thursday has knocked everything else from the front page.

Yet Treasurer Joe Hockey this week said he and his G20 colleagues are focused on delivering jobs and growth more than ever before.

"The changes in the economy over the last few months have made the job harder but it has not diminished our collective resolve," he said.

He acknowledged the challenges in attaining the target of bettering the global growth trajectory by 2 percent by 2018, a goal set earlier this year at a similar meeting in Sydney.

"Whether we reach the 2 percent or not – the G20 is committed to promoting further growth and to creating more jobs," said Hockey, perhaps suggesting he had already conceded the target was too ambitious.

Complicating the growth agenda, Western nations recently slapped sanctions on some of Russia's biggest firms as punishment over Moscow's role in the Ukraine crisis.

Slowing growth in China is also fueling anxiety.

CORE MISSION

Justin O'Brien, a professor at the University of New South Wales' Centre for Law, Markets and Regulation, said the G20 was losing sight of its core mission of ensuring there was no repeat of the financial crisis.

While there was no shortage of consultation, regulatory initiatives or rhetoric on the progress being made, the reality was that much divergence remained between members.

"All battles in regulation happen at the implementation stage and in terms of implementation, there is basically trench warfare taking place," O'Brien said.

Much of the leg work on financial regulation is nearing completion after years of tortuous negotiations. Officials have expressed confidence in concluding agreements on issues such as shadow banking, derivatives and global tax rules by the time of the G20 Leaders Summit in Brisbane in November.

Last week, a draft plan on how much the world's largest banks will have to set aside as safety buffers was circulated and will be discussed at the Cairns meeting.

"It is clear that decisive reforms are needed across G20 economies to boost potential output and help ensure that growth is more balanced," Hockey said.

"This is why the importance of our efforts this year cannot be understated. Come the Brisbane Summit, every G20 member will present a comprehensive listing of their new policy actions to lift growth and create jobs."

(Editing by Kim Coghill)

TOP NEWS Islamic State campaign tests Obama's commitment to Mideast allies

04:20 No comments

WASHINGTON (Reuters) - After about 15 hours of flying and five hours of meetings, sleep finally caught up with U.S. Secretary of State John Kerry in Baghdad. It was 6:04 p.m.

After sinking into his seat at the center of the cavernous interior of a C-17 military transport plane, he cradled his head in his palm, put his feet on a desk and shut his eyes.

Visibly tired, too, were his retinue of aides as they took their seats, some clutching briefing papers with notes scribbled in the margin from meetings with Iraqi Prime Minister Haider al-Abadi and the government he had formed a day earlier on Sept. 9.

Kerry's exhaustion was understandable after nearly 24 hours of non-stop travel and meetings.

America's fatigue in the Middle East could be a different story: the Iraqis who met Kerry may wonder if his boss, President Barack Obama, has the energy or stomach for what lies ahead in a country he has spent most of his nearly six years in office trying to leave behind.

The challenge is highlighted by a Reuters/Ipsos poll on Friday showing that while Americans support Obama's campaign of airstrikes against Islamic State militants, they have a low appetite for a long campaign against the group.

Several important tests loom for the U.S. administration's nascent coalition to "degrade and defeat" the ultra-hardline Islamic State whose militants have seized a third of both Iraq and Syria, declared war on the West and beheaded two American journalists and one British aid worker.

The complexity of eliminating Islamic State, which requires stabilizing Iraq, building up its armed forces and creating a western-backed rebel force in Syria, could take years, testing Obama's commitment and that of whoever succeeds him in 2017.

"There's a real general distrust among our regional allies about our commitment to this because we've been missing in action for the last three years," said David Schenker, a specialist on Syria at the Washington Institute for Near East Policy and a former Pentagon adviser on Syria during President George W. Bush's administration.

In Baghdad, Amman, Jeddah, Ankara, Cairo and Paris in the last week, Kerry laid plans for a U.S.-led coalition of regional and outside powers. It would hammer the black-clad fighters of Islamic State militarily, dry up its funding, eliminate its safe havens in Syria, block its ability to recruit fighters and try to extinguish its extremist ideology.

Kerry, who will report on his trip to Obama and Congress this week, insists this is different from past U.S. operations in the region.

"This is not the Gulf War of 1991," he told reporters in Paris on Monday.

"And it's not the Iraq War of 2003 ... We're not building a military coalition for an invasion. We're building a military coalition together with all the other pieces for a transformation, as well as for the elimination of ISIL itself," he said, invoking an acronym for the Islamic State group.

QUESTION OF COMMITMENT

World powers meeting in Paris on Monday gave a symbolic boost to that effort, publicly backing military action to fight Islamic State militants in Iraq.

France sent jets on a reconnaissance mission to Iraq, a step towards becoming the first ally to join the U.S.-led air campaign there and a senior U.S. official said some Arab countries had promised to take part.

On Friday, Kerry will chair a meeting of the U.N. Security Council in New York, which will provide countries which quietly backed the U.S. coalition an opportunity to do so publicly.

But questions remain over how far each will commit to a fight that U.S. Defense Secretary Chuck Hagel said on Tuesday "will not be an easy or brief effort."

A 45-page State Department document detailed offers of assistance from about 40 countries, but these are mostly humanitarian. Military commitments are rare and small. Albania, for instance, plans to provide 22 million rounds of AK-47 bullets, 15,000 hand grenades and 32,000 artillery shells to Kurdish forces in Iraq.

U.S. fighter jets have conducted over 160 airstrikes on Islamic State positions in Iraq, resuming military action Obama and many Americans hoped were part of history when U.S. combat forces pulled out of the country in 2011.

The most senior U.S. military officer, General Martin Dempsey, raised the possibility on Tuesday that American troops might need to take on a larger role in Iraq's ground war, though Obama also ruled out a combat mission.

U.S. officials play down the prospect of imminent air attacks on the Islamist group's heartland in Syria and it remains unclear who, if anyone, would join them.

The United States will present a legal case before going into Syria, U.S. officials say, justifying strikes largely on the basis of defending Iraq from militants who threaten its sovereignty and have taken shelter in neighboring Syria during its three-year-old civil war.

"OVERALL COORDINATOR"

Entering Syrian airspace would deepen a conflict that already cuts across sectarian lines. Islamic State is made up of Sunni militants fighting a Shi'ite-led government in Iraq and a government in Syria led by members of a Shi'ite offshoot sect.

Briefing U.S. reporters in Paris, Kerry said there were "several discussions with foreign ministers" on how to defeat Islamic State inside Syria. He did not go into specifics, but he emphasized that it was not just about the airstrikes.

Kerry and his advisers often describe the anti-Islamic State campaign as "holistic". The approach was set out in a six-paragraph communique issued on Sept. 11 and signed by 10 Arab countries - Egypt, Iraq, Jordan, Lebanon and six Gulf states including rich rivals Saudi Arabia and Qatar.

The Arab states agreed to eight main tasks: stopping the flow of foreign fighters, countering Islamic State financing, repudiating their ideology, ending impunity, providing humanitarian relief, reconstruction of Islamic State-hit areas, supporting states that face "acute" Islamic State threats, and, "as appropriate, joining in the many aspects of a coordinated military campaign."

The United States specifically wanted the words "as appropriate," one senior State Department official said.

"We wanted to be an overall coordinator of this effort," the official said. "So, 'as appropriate' means as part of an overall campaign plan, and as this continues to move forward."

(This story adds dropped word "State" in 25th paragraph)

(Reporting by Jason Szep; Editing by David Storey and Howard Goller)

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Thursday, 18 September 2014

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