Crackdowns Make Fleeing North Korea Harder


Woohae Cho for the International Herald Tribune


The Rev. Kim Seung-eun at his church in Cheonan, a center for activists who help smuggle refugees from North Korea.







CHEONAN, South Korea — The Rev. Kim Seung-eun said he could measure the increasing difficulty of smuggling people out of North Korea by the higher cost of bribing North Korean soldiers on the Chinese border to look the other way.




“They demand not only more cash, but also all kinds of things for themselves and their superiors,” said Mr. Kim, a South Korean human rights activist who helps North Koreans flee their totalitarian homeland and resettle in the South. “They’ve developed a taste for South Korean goods, too.”


Under North Korea’s new leader, Kim Jong-un, human rights activists and South Korean officials say, it has become increasingly difficult to smuggle refugees out of the country, contributing to a sharp drop in the number of North Koreans reaching South Korea in the past year.


The number of refugees has never been particularly large, since most North Koreans are so impoverished they find it all but impossible to raise the money to attempt an escape. But the tightening of controls at the Chinese border led to a fall of about 44 percent from the previous year in the number of refugees reaching South Korea in 2012. The total was 1,509, according to South Korean government data.


Despite the relatively small number, the flow of North Koreans defecting to South Korea to escape poverty and oppression has long been a major embarrassment for the North. Lately, the Chinese also appear to have tightened their control at the river border to help protect their client government. “The crackdowns in China and North Korea came in tandem,” said Mr. Kim, who manages a network of activists and smugglers from his Caleb Mission church in Cheonan, a city about 60 miles south of Seoul. “It’s become more difficult for my people to operate in North Korea and China.”


A devastating famine in the 1990s caused many North Koreans to flee, and the number of refugees peaked at 2,917 in 2009. Today, about 24,000 people who escaped from North Korea live in South Korea.


In the last years of his rule, Kim Jong-il, the previous dictator and the current ruler’s father, added more checkpoints on the roads to the Chinese border, according to South Korean activists and researchers. North Korea built more barriers along the border and rotated patrols more frequently to discourage corruption.


Under Kim Jong-un, who took over a year ago after his father’s death, border controls have tightened further, officials and activists say. The government began to jam the Chinese cellphone signals that activists relied on to coordinate their smuggling operations with collaborators in the North. North Korea also deployed equipment to trace cellphone signals.


“That significantly narrowed the window for cross-border cellphone conversations,” said Kim Hee-tae, a leader of the International Network of North Korea Human Rights Activists. His group raises money from churches; until last year it typically arranged for 180 to 190 North Korean refugees annually to escape to the South. But this past year, he said, his organization managed to bring in only about 100 people.


“Even after the bribes are paid, there is no guarantee of success,” said Do Hee-youn, head of the Citizens’ Coalition for the Human Rights of North Korean Refugees, based in Seoul. “We have recently seen cases where border guards were not punished for having taken bribes when they turned over the refugees.” Adding to the difficulty, some of the missionaries and brokers involved in the smuggling were rounded up by the Chinese police.


“It just became impossible to use public transportation in China because these days you cannot buy a train or bus ticket without a proper ID, which the North Koreans don’t have,” said the Rev. Chun Ki-won, another veteran human rights activist, who runs the Durihana Mission, a Christian group based in Seoul.


But for all the tighter controls imposed by the North Koreans and Chinese, there are still ways of slipping through the cracks.


Landing a border assignment is seen by many North Korean soldiers as a chance to make a fortune by collecting bribes from smugglers. The police in North Korea sometimes protect families with relatives in the South so they can take a cut from cash remittances from the South.


North Koreans have also developed an appetite for outside news and entertainment. “If early defectors fled North Korea for sheer ‘survival,’ an increasing number of North Koreans reaching South Korea flee for ‘a better life’ than they had in the North,” Kim Soo-am, an expert on North Korean refugees at the Korea Institute for National Unification in Seoul, recently wrote.


A group of 15 North Koreans that the Caleb Mission team in Cheonan had smuggled out in early December included a striking example of one such defector: a 29-year-old woman who yearned to become a television celebrity. “She had watched so many South Korean soap operas that she developed an illusion about life in South Korea,” Mr. Kim said, pointing out a particularly well-dressed woman in a photograph of the 15 North Koreans. “When we smuggled her out of North Korea, she was already wearing nothing but South Korean-made clothes.”


This article has been revised to reflect the following correction:

Correction: January 5, 2013

Because of an editing error, an earlier version of this article gave the incorrect time period for a devastating famine in North Korea. The famine happened in the 1990s, not in 2009.



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New Jersey man accused of trying to hire “cannibal cop” to kidnap woman






NEW YORK (Reuters) – A New Jersey man offered to pay $ 5,000 to the so-called “cannibal cop” to kidnap a woman and deliver her to be raped, U.S. officials alleged on Friday.


Federal authorities arrested Michael Vanhise, 23, and charged him with conspiracy to commit kidnapping with Gilberto Valle III, a New York police officer who was arrested in October and charged with conspiring to kidnap, torture, cook and eat women.






In a series of emails last year, Vanhise tried to bargain down the kidnapping fee and urged the police officer to “just make sure she doesn’t die before I get her,” according to a criminal complaint unsealed Friday.


“No need to worry,” Valle replied in an email, prosecutors allege. “She will be alive. It’s a short drive to you.”


Vanhise admitted to investigators he sent the emails, prosecutors said.


Valle, nicknamed the “cannibal cop” by New York media, was accused of targeting women whose names were discovered in a file on his computer.


In November, Valle pleaded not guilty and said he was merely engaged in online fantasy role play.


Vanhise was charged with one count of conspiracy to commit kidnapping. He was expected to appear in court Friday afternoon. His attorney, Alice Fontier, did not immediately return a call for comment.


The emails between the two men “read like a script from a bad horror film,” Manhattan federal prosecutor Preet Bharara said Friday in a statement.


Vanhise was also accused of emailing photos and the home address of a girl from his Hamilton, New Jersey neighborhood to two unnamed people, according to a criminal complaint, which said Vanhise solicited the girl’s kidnapping.


Prosecutors said Vanhise tried to bargain down the price for the kidnapping to $ 4,000.


“Could we do 4?” Vanhise asked Valle in an email last February, according to the complaint.


“I am putting my neck on the line here … $ 5,000 and you need to make sure that she is not found,” Valle responded. “She will definitely make news.”


Valle’s estranged wife tipped off authorities after she discovered a disturbing file on his computer, a law enforcement official said at the time.


The file, called “Abducting and Cooking: A Blueprint,” contained the names and pictures of at least 100 women, and the addresses and physical descriptions of some of them, according to court documents.


Authorities charged last fall that Valle had undertaken surveillance of some of the women at their places of employment and their homes.


Valle was denied bail by a judge who called the charges “profoundly disturbing.”


Both men face a maximum sentence of life in prison if convicted. The case has disturbed even veteran criminal investigators.


“No effort to characterize the defendant’s actions is necessary,” said FBI Assistant Director-in-Charge George Venizelos in a statement. “The factual allegations more than suffice to convey the depravity of the offense.”


(Reporting by Chris Francescani; Editing by Daniel Trotta and Alden Bentley)


Internet News Headlines – Yahoo! News




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George Lucas Engaged to Mellody Hobson















01/03/2013 at 07:35 PM EST







George Lucas and Mellody Hobson


Mike Coppola/Getty


George Lucas is following the Force – right down the aisle.

The Star Wars director, 68, is engaged to DreamWorks animation chairman Mellody Hobson, a rep for Lucasfilm confirmed to The Hollywood Reporter on Thursday.

Hobson, 43, has been dating Lucas since 2006. This will be her first marriage and Lucas's second; he previously was married to film editor Marcia Lou Griffin. The exes adopted a daughter Amanda before their 1983 divorce. Lucas went on to adopt two more children.

Lucas's fiancée is also a contributor to Good Morning America's financial segments and has received many honors, including a 2002 listing as one of Esquire's "Best and Brightest" in America.

Lucas has made headlines of his own, recently donating to an education foundation much of the $4 billion from his sale of Lucasfilm to Disney.

According to THR, Lucas said at the time, "As I start a new chapter in my life, it is gratifying that I have the opportunity to devote more time and resources to philanthropy."

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CDC: 1 in 24 admit nodding off while driving


NEW YORK (AP) — This could give you nightmares: 1 in 24 U.S. adults say they recently fell asleep while driving.


And health officials behind the study think the number is probably higher. That's because some people don't realize it when they nod off for a second or two behind the wheel.


"If I'm on the road, I'd be a little worried about the other drivers," said the study's lead author, Anne Wheaton of the Centers for Disease Control and Prevention.


In the CDC study released Thursday, about 4 percent of U.S. adults said they nodded off or fell asleep at least once while driving in the previous month. Some earlier studies reached a similar conclusion, but the CDC telephone survey of 147,000 adults was far larger. It was conducted in 19 states and the District of Columbia in 2009 and 2010.


CDC researchers found drowsy driving was more common in men, people ages 25 to 34, those who averaged less than six hours of sleep each night, and — for some unexplained reason — Texans.


Wheaton said it's possible the Texas survey sample included larger numbers of sleep-deprived young adults or apnea-suffering overweight people.


Most of the CDC findings are not surprising to those who study this problem.


"A lot of people are getting insufficient sleep," said Dr. Gregory Belenky, director of Washington State University's Sleep and Performance Research Center in Spokane.


The government estimates that about 3 percent of fatal traffic crashes involve drowsy drivers, but other estimates have put that number as high as 33 percent.


Warning signs of drowsy driving: Feeling very tired, not remembering the last mile or two, or drifting onto rumble strips on the side of the road. That signals a driver should get off the road and rest, Wheaton said.


Even a brief moment nodding off can be extremely dangerous, she noted. At 60 mph, a single second translates to speeding along for 88 feet — the length of two school buses.


To prevent drowsy driving, health officials recommend getting 7 to 9 hours of sleep each night, treating any sleep disorders and not drinking alcohol before getting behind the wheel.


__


Online:


CDC report: http://www.cdc.gov/mmwr


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Asian shares drop on Fed minutes, dollar extends gain

TOKYO (Reuters) - Asian shares fell on Friday, tracking overnight weakness in global equities after senior Federal Reserve officials expressed concerns about continuing to expand stimulative bond buying, but the dollar extended gains as U.S. debt yields rose.


Minutes from the Fed's December policy meeting released on Thursday showed some voting members of the Federal Open Market Committee were increasingly concerned about the potential risks of the Fed's asset purchases on financial markets, even if it looked set to continue an open-ended stimulus program for now.


The Fed's asset-buying policy has been pivotal in underpinning investor risk appetite and supporting global equities, so the more hawkish Fed minutes unnerved financial markets on Thursday, driving benchmark U.S. Treasury yields up to a near eight-month high and weighing on equities and oil, while lifting the dollar.


The dollar was also bolstered by data showing U.S. private-sector hiring improved in December, raising hopes for a strong monthly payrolls report due later in the day, a key gauge to the U.S. economy and the Fed's future policy course.


The rise in the dollar hit precious metals and oil on Friday as a firmer dollar makes dollar-based assets more expensive for non-dollar holders.


The Fed's minutes prompted investors to book profits from rallies immediately after U.S. lawmakers earlier this week narrowly avoided falling off the "fiscal cliff" of automatic taxes increases and spending cuts, which risked derailing the economy.


"Market moves largely reflect positioning after the recent rallies and before the nonfarm payrolls, which could tip the markets either way," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.


MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> slid 0.8 percent, after scaling its highest since August 2011 on Thursday.


Australian shares <.axjo> slipped 0.4 percent, retreating from a two-day rally which took shares to their highest in more than 19 months on Thursday. Hong Kong shares <.hsi> tumbled 0.8 percent but Shanghai shares <.ssec> inched up 0.2 percent.


The dollar hit its highest since July 2010 against the yen at 87.78 while the euro fell to a three-week low of $1.3019 on Friday. The U.S. dollar <.dxy> also touched a near four-week high against a basket of major currencies.


"Dollar-positive momentum is solid as the fiscal cliff was averted, the overnight data was good and yields were rising. I won't be surprised to see the dollar rise to 90 yen soon," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo.


"Despite repeated Japanese intervention, the dollar had refused to strengthen in the past, but now, it's advancing without any action, suggesting the direction has completely changed to support continued dollar buying," Maeba said.


The yen's tumble pushed Japan's benchmark Nikkei stock average <.n225> up 2.6 percent to its highest since March 2011, outshining the Asian regional bourses. Japanese markets were closed from December 31 to January 3 for the new year's holidays. <.t/>


Japanese government bonds skidded on their first trading day of 2013, with benchmark yields hitting a 3 1/2-month high in line with surging Japanese equities and a drop in U.S. Treasuries prices.


FISCAL CLIFF VS DATA


U.S. President Barack Obama and congressional Republicans face tough talks on spending cuts and an increase in the nation's debt limit as the hard-fought deal to avert the fiscal cliff covered only taxes and delayed decisions on expenditures until March 1.


But investor sentiment was supported by recent data showing activity in China's services sector and at U.S. factories expanded in December, which brightened the outlook for global growth.


"The minutes have added a fresh degree of uncertainty into the investment climate, which is likely to mean a steeper yield curve. But equity investors should take heart from the fact that the Fed's perception is qualified on an improving economy," Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York, said in a note to clients.


China's services sector saw its slowest rate of expansion in nearly a year and a half in December, a private sector survey showed on Friday, but underlying growth revival remained intact, even if it were modest.


The U.S. economy likely added 150,000 jobs in December, according to a Reuters survey, up from 146,000 in November. The unemployment rate is expected to hold steady at 7.7 percent.


Resolution of the U.S. fiscal cliff crisis could spell trouble for some Asian assets as investors could start to shift some money out of overpriced Asian investments in favor of the U.S. on brightening prospects for American stocks.


U.S. crude fell 0.8 percent to $92.17 a barrel while Brent shed 0.7 percent to $111.38.


U.S. gold futures for February dropped more than 1 percent to around $1,645 an ounce on Friday while spot gold also fell 1 percent to around $1,645, dragging silver down more than 2 percent to $29.48.


Despite the decline in equities markets, sentiment in Asian credit markets remained upbeat, with the spread on the iTraxx Asia ex-Japan investment-grade index narrowing by two basis points.


(Editing by Eric Meijer)



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In Chile, Abortion Hot Line Is in Legal Gray Area


Roberto Candia for The New York Times


Volunteers for the Safe Abortion Hot Line in Chile routinely wear masks when showing support in public for the organization in a country where abortion is illegal under any circumstances.







SANTIAGO, Chile — Every time the phone rings, Angela Erpel feels her nerves swell. Sometimes it is a scared teenager on the other end, or a desperate mother of three. There are the angry ones, too, with callers playing the sounds of crying babies or sending text messages with pictures of aborted fetuses.




Then Ms. Erpel, 38, a sociologist who volunteers at Chile’s Safe Abortion Hot Line, gathers herself and settles into a familiar dialogue on the use of misoprostol, a drug that will induce a medical abortion.


“We don’t give them a moral guide or advice; we only provide information,” she said.


Since the hot line began in 2009, volunteers spread across this long, thin country have taken turns answering tense calls from women seeking information about abortion every evening from 7 p.m. to 11 p.m. There have been more than 12,000 calls so far, and they continue rolling in at a steady clip.


In a country where abortion is entirely illegal, even in cases of rape or when a woman’s life is in danger, the hot line is a risky endeavor. Operating in a legal gray area, volunteers face a daunting prison sentence if a conversation veers too far from a lawyer-approved script. The hot line already has had three lawsuits brought against it, though all were eventually dropped.


According to the law, having an abortion carries a penalty of 5 to 10 years in prison, depending on the circumstances, while doctors and others who perform an abortion or assist with one could face up to 15 years, prosecutors say. In practice, however, fewer than 500 cases have been prosecuted over the last several years.


“I think there is a certain sensitivity to the social conditions behind these abortions, such as poverty or rape or teenage pregnancy,” explained Paula Vial, a lawyer and former public defender in Santiago.


Beyond the legal consequences, the 30 hot line volunteers are keenly aware of the social ramifications of taking an active role in such a polarizing issue. They wear masks when promoting the hot line at public gatherings, and are often vague about the details of their volunteer work in their daily lives. Many fear losing their jobs or driving a wedge into personal and family relationships. Indeed, Ms. Erpel was the only volunteer willing to go on the record about her work with the hot line, and even she is usually circumspect about it.


“It’s complicated,” she explained. “I’m open about being in an organization, but not necessarily that I work directly with abortion.”


Abortion was not always a clandestine affair in Chile. The current law that strictly bans it was one of the final acts of the dictatorship. In 1989, shortly before relinquishing power, Gen. Augusto Pinochet ended a tradition of legal abortion dating to 1931, in which a pregnancy that threatened a woman’s life, or a fetus that was not viable outside the womb, could be terminated. Chile’s law now is one of the strictest in the world.


By contrast, Uruguay legalized abortions in the first trimester for any reason last October, joining Guyana and Cuba as Latin American countries with broadly legalized procedures. Abortion is also legal in Mexico City. But Chile has remained a socially conservative country, after 20 years of economic growth and the election in 2006 of a woman as president.


“The hierarchy of the Catholic Church has had a very strong influence in public policy,” said Claudia Dides, a spokeswoman for the Movement for the Legal Interruption of Pregnancy.


In a pivotal case in 2008, Karen Espíndola, then 22, learned in her 12th week of pregnancy that her fetus had holoprosencephaly. Fetuses with the condition have a single-lobed brain, and most die before they are born. It is a common reason for terminating a pregnancy.


Ms. Espíndola sought an abortion, appealing to the president and setting off a national conversation over abortion. In February 2009, Ms. Espíndola gave birth to Osvaldo, who died in 2011.


“In reality he was never conscious he was alive,” she lamented. “He fought to breathe; he was fed through a tube. We all suffered a lot. Nobody here is a winner.”


Chile has witnessed a swell of liberal social movements in recent years, with gay men and lesbians pressing for the country’s first hate-crime legislation, environmentalists stalling dam-building projects in Patagonia, and students pushing for an overhaul of the education system.


Advocates contend that abortion rights sentiment bubbles near the surface as well, but the government has pushed back.


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Brain image study: Fructose may spur overeating


This is your brain on sugar — for real. Scientists have used imaging tests to show for the first time that fructose, a sugar that saturates the American diet, can trigger brain changes that may lead to overeating.


After drinking a fructose beverage, the brain doesn't register the feeling of being full as it does when simple glucose is consumed, researchers found.


It's a small study and does not prove that fructose or its relative, high-fructose corn syrup, can cause obesity, but experts say it adds evidence they may play a role. These sugars often are added to processed foods and beverages, and consumption has risen dramatically since the 1970s along with obesity. A third of U.S. children and teens and more than two-thirds of adults are obese or overweight.


All sugars are not equal — even though they contain the same amount of calories — because they are metabolized differently in the body. Table sugar is sucrose, which is half fructose, half glucose. High-fructose corn syrup is 55 percent fructose and 45 percent glucose. Some nutrition experts say this sweetener may pose special risks, but others and the industry reject that claim. And doctors say we eat too much sugar in all forms.


For the study, scientists used magnetic resonance imaging, or MRI, scans to track blood flow in the brain in 20 young, normal-weight people before and after they had drinks containing glucose or fructose in two sessions several weeks apart.


Scans showed that drinking glucose "turns off or suppresses the activity of areas of the brain that are critical for reward and desire for food," said one study leader, Yale University endocrinologist Dr. Robert Sherwin. With fructose, "we don't see those changes," he said. "As a result, the desire to eat continues — it isn't turned off."


What's convincing, said Dr. Jonathan Purnell, an endocrinologist at Oregon Health & Science University, is that the imaging results mirrored how hungry the people said they felt, as well as what earlier studies found in animals.


"It implies that fructose, at least with regards to promoting food intake and weight gain, is a bad actor compared to glucose," said Purnell. He wrote a commentary that appears with the federally funded study in Wednesday's Journal of the American Medical Association.


Researchers now are testing obese people to see if they react the same way to fructose and glucose as the normal-weight people in this study did.


What to do? Cook more at home and limit processed foods containing fructose and high-fructose corn syrup, Purnell suggested. "Try to avoid the sugar-sweetened beverages. It doesn't mean you can't ever have them," but control their size and how often they are consumed, he said.


A second study in the journal suggests that only severe obesity carries a high death risk — and that a few extra pounds might even provide a survival advantage. However, independent experts say the methods are too flawed to make those claims.


The study comes from a federal researcher who drew controversy in 2005 with a report that found thin and normal-weight people had a slightly higher risk of death than those who were overweight. Many experts criticized that work, saying the researcher — Katherine Flegal of the Centers for Disease Control and Prevention — painted a misleading picture by including smokers and people with health problems ranging from cancer to heart disease. Those people tend to weigh less and therefore make pudgy people look healthy by comparison.


Flegal's new analysis bolsters her original one, by assessing nearly 100 other studies covering almost 2.9 million people around the world. She again concludes that very obese people had the highest risk of death but that overweight people had a 6 percent lower mortality rate than thinner people. She also concludes that mildly obese people had a death risk similar to that of normal-weight people.


Critics again have focused on her methods. This time, she included people too thin to fit what some consider to be normal weight, which could have taken in people emaciated by cancer or other diseases, as well as smokers with elevated risks of heart disease and cancer.


"Some portion of those thin people are actually sick, and sick people tend to die sooner," said Donald Berry, a biostatistician at the University of Texas MD Anderson Cancer Center in Houston.


The problems created by the study's inclusion of smokers and people with pre-existing illness "cannot be ignored," said Susan Gapstur, vice president of epidemiology for the American Cancer Society.


A third critic, Dr. Walter Willett of the Harvard School of Public Health, was blunter: "This is an even greater pile of rubbish" than the 2005 study, he said. Willett and others have done research since the 2005 study that found higher death risks from being overweight or obese.


Flegal defended her work. She noted that she used standard categories for weight classes. She said statistical adjustments were made for smokers, who were included to give a more real-world sample. She also said study participants were not in hospitals or hospices, making it unlikely that large numbers of sick people skewed the results.


"We still have to learn about obesity, including how best to measure it," Flegal's boss, CDC Director Dr. Thomas Frieden, said in a written statement. "However, it's clear that being obese is not healthy - it increases the risk of diabetes, heart disease, cancer, and many other health problems. Small, sustainable increases in physical activity and improvements in nutrition can lead to significant health improvements."


___


Online:


Obesity info: http://www.cdc.gov/obesity/data/trends.html


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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP


Mike Stobbe can be followed at http://twitter.com/MikeStobbe


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Asia stocks eke out gains on China hopes, oil eases

HONG KONG (Reuters) - Most Asian stock markets edged higher on Thursday on hopes of a steady economic revival in China although oil gave back some of the previous session's strong gains as investors took some money off the table and braced for more U.S. budget battles.


The MSCI Asia Pacific ex-Japan index of stocks <.miapj0000pus> was up 0.3 percent following Wednesday's 2 percent jump on relief that U.S. politicians had averted the "fiscal cliff". Japan's Nikkei 225 <.n225> rose 0.7 percent.


Data from China showing the services sectors expanded in December continued to underpin expectations of an economic recovery that has helped spur a strong rally in Hong Kong-listed Chinese shares <.hsce> over the past month.


The China Enterprises index <.hsce> rose 0.4 percent while Hong Kong's Hang Seng index <.hsce> was up 0.2 percent and hovered near its highest since June 2011.


"China looks like its improving at the margin and the market has momentum that could last for at least a few months," said Christian Keilland, head of trading at BTIG in Hong Kong.


"Investors seem to have accepted that reforms are underway but they're going to happen at a slower pace," said Keilland.


Onshore Chinese markets will resume trading in the new year on Friday.


Australian stocks <.axjo> rose for a second straight day and were up 0.6 percent at a 19-month high, with mining giants Rio Tinto up 2 percent and BHP Billiton up 0.5 percent, among the top boosts on the benchmark index.


But South Korea's Kospi <.ks11> underperformed the region, falling 0.4 percent as automakers and exporters slumped on a stronger Korean won, which hit a 16-month high against the dollar overnight.


In other currency markets, the Japanese yen bounced after hitting a 29-month low versus the dollar earlier in the day but analysts warned that any strength is likely to be short-lived.


"Technically dollar/yen looks somewhat overbought here. It's gone a long way in a very short time," said Callum Henderson, global head of FX research for Standard Chartered Bank in Singapore, adding that the dollar could see some consolidation in the near term before heading higher.


The euro which in overnight trading was close to a 8-1/2 month high against the dollar, slipped 0.1 percent.


The U.S. dollar rose 0.3 percent <.dxy> against a basket of major currencies.


President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after the hard-fought deal halted a round of automatic fiscal tightening that threatened to push the world's largest economy into recession.


Strength in the dollar and profit-taking pushed oil prices lower with Brent crude slipping below $112 a barrel and U.S. crude futures down 57 cents to $92.55.


"After the initial excitement, reality sets in," said Victor Shum, oil consultant at IHS Purvin & Gertz. "There will be other negotiations and the deal is a compromise."


(Reporting by Vikram Subhedar; Editing by Kim Coghill)



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IHT Rendezvous: Seen From China: Fiscal Cliff Shows Democracy's Weakness

With warnings – and mixed metaphors – about tripping over cans kicked down roads and bungee jumping into abysses, reactions from China to the just-struck United States’ “fiscal cliff” budget deal have been colorful – and critical.

Get it together, is the message: American democracy isn’t working if politicians can’t pass national budgets on time. And the mess reduces the attractiveness of the American Model to the world.

One story by Xinhua, the state news agency, compared U.S. politicians to bungee jumpers, pointing out that the term “fiscal cliff” wasn’t actually right since the country did fall off a cliff, as 2012 turned into 2013 without a deal, but bounced back when agreement came on Wednesday, Asia time.

Such a fall should have been deadly, Xinhua said. “So describing this finance crisis as ‘bungee jumping’ may be more appropriate.”

“Still, to other countries, the United States’s increasingly serious decision-making problems reduces the attractiveness of the American Model and trust in the American economy,” Xinhua said.

China’s views matter for all sorts of reasons, including geo-politics, but also because it one of the biggest creditors of the U.S. government via its huge U.S. treasury purchases. This makes China vulnerable – and concerned.

America is in decline, implied Xinhua in a commentary.

“The American people were once better known for their ability to make tough choices on difficult issues,” ran a separate Xinhua story – this one a commentary – by a person named Ming Jinwei. (Such commentaries are not official statements by the government but are believed to reflect high-level government opinion.)

“The Americans may be proud of their mature Democracy, but the political gridlock in Washington really looks ugly from an outsider’s view,” the commentary ran.

Americans may regard the cliff-hanger deal as their own private business, but, “As the world’ s sole superpower, U.S. domestic failures to reach deals on critical issues have implications for the whole world,” it ran.

“For the Americans, their government has been in the red for too long. Since 2002, Uncle Sam has not tasted any government surplus in over a decade as it borrows heavily to support costly wars in the Middle East and to stimulate the economy out of a recession in the wake of the global financial crisis,” ran the commentary.

The theme continued in another Xinhua story: “In a democracy like the United States, tax increases and spending cuts, the exact dose of medicine needed to cure its chronic debt disease, have long proved hugely unpopular among voters. So the politicians have chosen to kick the can down the road again and again,” it said, reflecting a widespread horror in China at the size of the United States’ $16 trillion debt – which will continue to grow even with this week’s deal.

“But as we all know, the can will never disappear. Sometime and somewhere, you might trip over it and fall hard on the ground, or in the U.S. case, into an abyss you can never come out of,” Xinhua warned.

Still, China has its own challenges, as this Bloomberg story today makes clear, chiefly the threat of its own domestic debt and “cotton candy” growth.

Some of the factors that plunged the U.S. into economic crisis in 2008, adding to debt and shrinking the space within which to solve fiscal problems, are shared by China, warned David Loevinger, a former senior coordinator for China affairs at the U.S. Treasury Department.

“The U.S. got into trouble because institutions like Fannie Mae and Freddie Mac were too big to fail and had a toxic mix of private shareholders and implicit government guarantees. China’s financial system is full of Freddies and Fannies,” said Mr. Loevinger, now an Asia analyst in Los Angeles at TCW Group.

China’s risk is mostly domestic, carried by the Ministry of Finance and the state banks it runs, unlike the U.S.’s debt, which is held by parties around the world.

But China’s new leader, Xi Jinping, has inherited an economy with much more debt than the one President Hu Jintao took over in 2003, Bloomberg wrote, with government, corporate and consumer debt at an estimated 206 percent of gross domestic product, it said, citing a report by Standard Chartered Bank. In March 2003, when Mr. Hu became president, it stood at 150 percent, Bloomberg reported.

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