US Business

Biden, Xi cool Cold War rhetoric in landmark summit

Presidents Joe Biden and Xi Jinping tried to take some heat out of their simmering superpower rivalry Monday, during a three-hour summit that found common ground on Ukraine but left little doubt that stark differences remain.

Biden emerged from the meeting proclaiming there need not be a new Cold War, as both leaders spoke of the desire to prevent high tensions from spilling over into conflict.

Xi told Biden that the two countries “share more, not less, common interests”, according to a Chinese account of the meeting, sounding more conciliatory than the last three pandemic-filled years without face-to-face presidential meetings would suggest.

“The world expects that China and the United States will properly handle the relationship,” Xi told him.

Trying to scotch the notion that China is bent on usurping the United States and remaking the world in its own authoritarian image, Xi reportedly said Beijing does not seek to challenge the United States or “change the existing international order”.

On the pressing issue of Russia’s war in Ukraine and President Vladimir Putin’s veiled threats to use nuclear weapons, the pair agreed that nuclear war should not be fought and cannot be won, according to the White House.

They “underscored their opposition to the use or threat of use of nuclear weapons in Ukraine,” the US added.

That common cause is likely to give Putin pause as he weighs how to turn the tide of a war that his regime’s survival could hinge on.

But Biden and Xi’s meeting was no kumbaya summit. 

The two leaders notably clashed on the question of Taiwan’s future.  

Tensions have risen sharply over Taiwan, with China in August conducting major military exercises after a visit to the self-governing democracy, which it claims, by US House Speaker Nancy Pelosi.

Xi told Biden that Taiwan is the “first red line that must not be crossed in China-US relations,” according to the Chinese foreign ministry statement.

Biden told Xi he opposed any changes on Taiwan — after the US leader repeatedly indicated that Washington was ready to defend the island militarily.

And he raised US “objections” to China’s “coercive and increasingly aggressive actions toward Taiwan, which undermine peace and stability across the Taiwan Strait and in the broader region, and jeopardise global prosperity,” the White House said.

Biden also nudged China to rein in ally North Korea after a record-breaking spate of missile tests has raised fears that Pyongyang will soon carry out its seventh nuclear test, and said he was “confident China’s not looking for North Korea to engage in further escalation”.

In a sign of thawing ties, Biden announced that US Secretary of State Antony Blinken will visit China “to follow up on their discussions”.

A senior State Department official, speaking on condition of anonymity, told AFP the two countries were working “to schedule a visit tentatively planned for early next year”.

Xi’s last in-person meeting with a US president was in 2019 with Donald Trump, who along with Biden identified China as a top international concern and the only potential challenger to US primacy on the world stage. 

Although the meeting was the first time Xi and Biden have met as presidents, the pair have an unusually long history together. 

By Biden’s estimation, he spent 67 hours as vice president in person with Xi including on a 2011 trip to China aimed at better understanding China’s then-leader-in-waiting, and a 2017 meeting in the final days of Barack Obama’s administration.

On Tuesday, Xi will hold the first formal sitdown with an Australian leader since 2017, Prime Minister Anthony Albanese announced, following a concerted pressure campaign by Beijing against the close US ally. 

He will also meet French President Emmanuel Macron, and Britain’s new Prime Minister Rishi Sunak has said he also hopes to speak with the Chinese leader.

– Absent Putin –

Though he is engaging Xi, Biden has refused since the invasion of Ukraine to deal directly with Putin, who is conspicuously absent from the Bali summit.

The Kremlin cited scheduling issues and has instead sent longtime foreign minister, Sergei Lavrov, who arrived Sunday evening and underwent two health checks at a Bali hospital, according to an Indonesian health ministry official.

Lavrov, 72, denied reports that he was receiving treatment at a Bali hospital, telling Tass news agency that he was in his hotel preparing for the summit.

Lavrov’s presence has thrown into question a customary G20 group photo and joint statement, with Russia sure to reject any explicit calls to end its invasion of Ukraine.

Brazil's Embraer announces 3rd quarter loss

Brazilian plane-maker Embraer announced on Monday a third quarter loss of 160.4 million reais ($30.2 million) due to falling revenue in its defense and security sectors.

Compared to the third quarter in 2021, when Embraer lost 234 million reais, defense and security revenues fell by 42 percent.

That was partially offset, however, by increases of five percent in commercial aviation, six percent in executive business and seven percent in support and services.

Embraer, the world’s third-biggest plane-maker after Airbus and Boeing, had made a 372.6 million reais net profit in the second quarter, having lost 170.7 million reais in the first three months of the year.

In a statement, Embraer said it had delivered 10 commercial airplanes and 23 executive jets during the last quarter.

It has delivered 79 aircraft in the year to date.

The company said continued disruption to the supply chain affecting the airline industry accounted for the third quarter losses.

Embraer’s overall debt stood at $1.3 billion at the end of the third quarter, down from the $1.8 billion figure a year earlier.

Wall Street rally reverses as dollar rises

Wall Street stocks slipped Monday following last week’s global surge as the dollar advanced against major rivals. 

The dollar crept higher as traders urged caution over expectations that the Federal Reserve would pull back from massive US interest hikes as inflation cools in the world’s biggest economy.

US stocks had bounded higher last week on the prospect the Fed might be able to let up on its aggressive interest rate hikes, with the tech-heavy Nasdaq jumping 8.1 percent and the blue-chip Dow rising 4.1 percent.

But Wall Street opened lower, with the Dow shedding 0.3 percent.

“This morning … there is a little bit of questioning as to whether the market overreacted last week,” said Briefing.com analyst Patrick O’Hare.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said “the burst of euphoria which erupted… at the end of last week is ebbing away after fresh warnings that the fight against inflation is still a hard slog yet to be won.”

Investors will get a look this week whether that cooling has spread to consumers, with US retail sales data due out on Wednesday. Earnings figures from major retailers Walmart and Target will also provide a window into how inflation is impacting consumer spending, a major driver of the US economy.

European stocks were higher in afternoon trading, where data helped improved sentiment.

“There was good news from the eurozone as industrial production came in better than expected this morning,” said market analyst Fawad Razaqzada at City Index and FOREX.com.

While the eurozone is widely seen as heading for a recession, the data showed a month-on-month gain of 0.9 percent in September, while analysts had expected practically no gain. 

Sentiment also won a lift from China, which is relaxing some of its strict Covid-19 restrictions that have hammered growth in the world’s second largest economy.

Authorities have also reportedly unveiled a 16-point plan to support the beleaguered property sector, a major component of the country’s economic engine.

The industry has come under immense pressure since China imposed a number of restrictions in 2020 aimed at reeling in debt as major developers teetered on the brink of collapse.

The latest moves indicate that China’s leadership is beginning to focus on supporting the economy, a crucial driver of global growth, according to analysts.

Nomura’s Lu Ting warned, however, that the “measures may have little direct impact on stimulating home purchases”.

Hong Kong’s stock exchange ended more than one percent higher Monday — having soared over seven percent Friday.

Property firms were the best performers with Country Garden leading the way with a massive 40-percent jump.

– Key figures around 1330 GMT –

London – FTSE 100: UP 1.0 percent at 7,388.60 points

Frankfurt – DAX: UP 0.6 percent at 14,314.24

Paris – CAC 40: UP 0.5 percent at 6,630.54

EURO STOXX 50: UP 0.6 percent at 3,891.75

New York – Dow: DOWN 0.3 percent at 33,649.45

Tokyo – Nikkei 225: DOWN 1.1 percent at 27,963.47 (close)

Hong Kong – Hang Seng Index: UP 1.7 percent at 17,619.71 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,083.40 (close)

Euro/dollar: DOWN at $1.0308 from $1.0361 on Friday

Pound/dollar: DOWN at $1.1736 from $1.1839 

Dollar/yen: UP at 140.49 yen from 138.70 yen

Euro/pound: UP at 87.84 pence from 87.49 pence

West Texas Intermediate: DOWN 1.5 percent at $87.62 per barrel

Brent North Sea crude: DOWN 1.2 percent at $94.83 per barrel

burs-rl/yad

Net-zero in fashion, but clothing giants struggle to cut emissions

The world’s fashion giants have pledged to trim their carbon footprint but that goal remains elusive at a time “fast fashion” is all the rage — a topic in the spotlight at the UN climate summit.  

With a chance to strut their climate commitments at COP27 talks, clothing brands and manufacturers discussed global warming — but some admitted that their pledge to halve emissions by 2030 and reach net-zero by mid-century may be a stretch. 

“Are we there yet? Of course not. Are we on track? I would say … maybe,” Stefan Seidel, senior head of sustainability at Puma, told a panel at the COP27 in the Egyptian seaside resort of Sharm el-Sheikh.

Greenpeace and other groups have urged the sector — already under fire for often exploitative labour practices — to slow down or end the wasteful trend of mass-producing low-cost clothes that are quickly thrown away.

Fast fashion, they charge, uses up massive amounts of water, produces hazardous chemicals and clogs up landfills in poor countries with textile waste, while also generating greenhouse gases in production, transport and disposal.

The fashion sector was responsible for four percent of global emissions in 2018 — about the same as Britain, France and Germany combined — according to the McKinsey consultancy firm.

Some 30 firms — from retail giants H&M and Zara owner Inditex to sports apparel rivals Adidas and Nike — signed up to the Fashion Industry Charter for Climate Action at the COP24 summit in Poland in 2018.

At the time they pledged to cut emissions by 30 percent by 2030 and to be net-zero emitters by mid-century.

A year ago they set the new, more ambitious goal of slashing their CO2 emissions by half by the end of the decade, with more than 100 companies now signatories to the pledge.

But meeting the target is a major challenge for an industry with long and complex supply chains that span the globe, industry insiders admit.

– ‘Difficult and costly’ –

Industry figures at COP27 barely mentioned the “fast fashion” business model, which critics say is at the heart of the problem, focussing instead on ideas around the use of renewable energy in factories and regulation.

But greening the entire supply chain and introducing climate-friendly standards among suppliers of raw materials and factories is a monumental task.

Leyla Ertur, head of sustainability at H&M, said the Swedish firm has more than 800 suppliers.

And Marie-Claire Daveu, sustainability chief at Kering Group, which owns luxury brands Gucci and Yves Saint Laurent, said: “Even us, we’re not big enough to change all the supplies chains. That’s why collaboration is key.”

Ali Nouira, an Egyptian manufacturer, told another COP27 panel that certification bodies do not even exist in the region.

“When we manufacture, we need to have all the right certifications and the carbon footprints and all that, and for a small brand coming out from Egypt that is extremely difficult and also costly,” Nouira said.

“We also manufacture for other brands, in Europe and other places,” he said. “And we’re pressured to have the certifications and also to go down with our prices, so they can continue to make the profits they make.”

– ‘Leap of faith’ –

Nicholas Mazzei, head of environmental sustainability at online retailer Zalando, said there had been a culture change in developed countries, with banks offering lower interest rates to companies that commit to a net-zero target.

“If you make that transformation, you may end up paying nothing because the loans are so low the costs are basically free,” Mazzei said.

But suppliers face big costs as sewing clothes in factories requires more energy than that used by retail stores at the end of the supply chain.

“We need, at a far bigger scale, more renewable energy than brands do,” said Catherine Chiu, vice president of corporate quality and sustainability at Kong Kong firm Crystal International Group.

“Even if we install solar panels in all of our 20 plants, that would only represent 17 percent of the energy consumption of the group,” she said.

Delman Lee, vice chair for sustainability at TAL Apparel, another Hong Kong garment manufacturer, said it has been decarbonising its operations for a decade.

But with subsidiaries in countries including Vietnam and Ethiopia, it is complicated to navigate the different regulations, Lee said.

Aiming to become a net-zero business “is a leap of faith commitment,” Lee said. “You commit to something you don’t know how to achieve.”

Can't kill Ukraine, Zelensky hails in surprise Kherson visit

President Volodymyr Zelensky on Monday said it was “impossible to kill Ukraine” as he hailed the liberation of city of Kherson in a surprise visit.

NATO secretary general Jens Stoltenberg meanwhile cautioned that Ukraine was facing difficult months ahead and Russia’s military capability should not be underestimated, despite the takeover of Kherson city.

And US President Joe Biden and his Chinese counterpart Xi Jinping — a key ally of Vladimir Putin — agreed in talks Monday that nuclear weapons should never be used, including in Ukraine.

The Ukrainian presidency distributed images of Zelensky singing the national anthem with his hand over his chest as the country’s blue and yellow flag was hoisted next to Kherson’s main administrative building.

“This is what the Russian Federation did in our country, it showed the whole world that it can kill. But all of us, our armed forces, our National Guard and intelligence (services) have shown that it is impossible to kill Ukraine,” Zelensky said.

Russian President Vladimir Putin’s spokesman denied, however, that the Ukrainian leader’s visit had any impact on the status of the Kherson region, which Moscow formally annexed into Russia at a ceremony last month. 

In Kherson, Zelensky said that “the price of this war is high”.

“People are injured. A large number of dead. (Russian forces) have left or escaped — we believe that they have escaped because our army has surrounded the enemy and they were in danger,” Zelensky said.

“There were fierce battles, and the result is — today we are in Kherson region.”

– ‘Fierce battles’ –

Late Sunday, Zelensky said Ukrainian forces found evidence of hundreds of new “war crimes” carried out by Russian occupiers in Kherson.

His subsequent visit came just days after Ukrainian troops entered the city — the Kherson region’s administrative centre — after Russia pulled back its forces on Friday.

The takeover by Ukrainian troops is the latest in a string of setbacks for the Kremlin, which invaded Ukraine on February 24 hoping for a lightning takeover and to topple the government in days.

But Russian troops failed to capture the capital Kyiv and have since been pushed back from large portions of territory in the south and east.

Still, Stoltenberg said that “the coming months will be difficult” and cautioned that: “we should not make the mistake of underestimating Russia”.

“Putin’s aim is to leave Ukraine cold and dark this winter,” he told a press conference in The Hague after meeting the Dutch foreign and defence ministers.

The city of Kherson was the first major urban hub to fall to Russian forces and the only regional capital Moscow’s troops gained control over.

Its recapture opens a gateway for Ukraine to the entire Kherson region, with access to both the Black Sea in the west and the Sea of Azov in the east.

The region was one of four that the Kremlin announced in September were annexed and part of Russia. Russian President Vladimir Putin vowed to use all available means to defend them from Ukrainian forces, hinting at the use of nuclear weapons.

Biden and Xi agreed in talks at the G20 however that nuclear weapons should never be used, including in Ukraine, the White House said.

“President Biden and President Xi reiterated their agreement that a nuclear war should never be fought and can never be won and underscored their opposition to the use or threat of use of nuclear weapons in Ukraine,” it said in a statement.

Kremlin spokesman Dmitry Peskov said Monday he would not comment on Zelensky’s visit to Kherson but added: “this territory is part of the Russian Federation.”

– ‘Very scared’ –

A self-described partisan in Kherson told AFP after the Russian withdrawal that he and his friends had spent months walking the streets observing the Russians’ every move.

“You watch closely and then come home and write it all down. And then you send the information and hide absolutely everything — phones, papers, clothes, everything,” 19-year-old aspiring musician named Volodymyr Timor said.

“We reported everything — where their equipment and ammunition sites were, where they slept and where they went out drinking,” Timor said.

Ukraine’s forces could then use the coordinates to target strikes during a counteroffensive that has seen Russia cede roughly half the land it seized in the first weeks of war.

“I was scared,” the imposing but soft-spoken guitarist said of the prospect of being caught and possibly killed.

Fuelling concerns that Moscow may have a lingering presence in Kherson, Ukrainian intelligence services said they had detained a Russian military serviceman dressed in civilian clothes.

It said his task was “to gather information, adjust fire on the Ukrainain armed forces and carry out sabotage.”

Elsewhere, Ukraine’s forces had retaken 12 towns and villages in the eastern region of Lugansk, the military and local officials said Monday.

The eastern industrial region has been held by Russian-supported separatists since 2014 but Kyiv’s forces have slowly been clawing back territory there.

But Russia’s military also said its forces were making gains in the neighbouring region of Donetsk, capturing the village of Pavlivka, where fighting had caused controversy in Russia.

Last week, soldiers from the Far Eastern 155th Marine Guards Brigade complained about heavy losses in an address to the governor of the Far Eastern region of Primorye, Oleg Kozhemyako. 

Trump poised to launch 2024 comeback bid

Former US president Donald Trump is expected to officially launch another White House bid on Tuesday, refusing calls from within his own Republican party to fade away after his loyalists underperformed in this year’s midterm elections.

The 76-year-old billionaire, whose 2016 win shocked America and the world, has summoned the press to his Florida mansion for a “very big announcement” at 9:00 pm Tuesday (0200 GMT Wednesday).

“President Trump is going to announce on Tuesday that he’s running for president,” said one of his advisors, Jason Miller, who predicts the speech will be “very professional, very buttoned up.”

Known for his unpredictability, Trump could still change his mind at the last minute, but for months he has barely hidden his desire to vie for the presidency again in 2024.

And delaying the announcement now, as some of his advisors have reportedly suggested to him, would be highly awkward considering Trump’s boast that it would “perhaps be the most important speech given in the history of the USA.”

– ‘Red wave’ crashes –

A 2024 White House bid would be Trump’s third presidential campaign and — if he wins his party’s nomination — the fifth national election with him as the Republican Party standard-bearer.

In 2016, Trump and the Republicans swept into power, taking control of the White House and maintaining their majorities in both chambers of Congress.

But Democrats won back the House of Representatives in a 2018 landslide after campaigning largely against Trump’s caustic style.

Trump then lost reelection in 2020 to Democrat Joe Biden — Trump still refuses to accept defeat — while Democrats won control of the 100-seat Senate with a de-facto majority due to Vice President Kamala Harris’s tie-breaking vote in the chamber split 50-50.

After leaving Washington in chaos shortly after his partisans stormed the US Capitol, Trump chose to remain in the political arena, continuing to fundraise and hold rallies around the country.

Leading up to the 2022 midterm vote, in which Biden’s Democrats had been expected to lose handily, Trump made denial of the 2020 election results a key litmus test for candidates to win his influential political endorsement.

But the predicted Republican “red wave” failed to materialize, and Democrats will maintain their control of the Senate. In the still-undecided House, Republicans seem likely to eke out only a razor-thin majority.

The results have emboldened Trump’s Republican detractors and sapped most of his political momentum heading into the Tuesday campaign launch.

– ‘Three strikes’ –

“It’s basically the third election in a row that Donald Trump has cost us the race, and it’s like, three strikes and you’re out,” said Maryland Governor Larry Hogan, a vocal Trump critic, Sunday on CNN.

Trump’s response has been to double down on unfounded claims of ballot rigging in the midterms, posting on his Truth Social platform that the results were a “scam” — and pointing a finger of blame at Senate Republican leader Mitch McConnell.

“It’s Mitch McConnell’s fault,” he posted, saying the Kentuckian had badly allocated campaign funds and pursued a flawed legislative agenda. 

“He blew the Midterms, and everyone despises him,” said Trump, who has long been at loggerheads with McConnell.

Tuesday’s announcement is widely seen as a way to take the wind out of the sails of potential Republican rivals, namely Ron DeSantis, the freshly-reelected Florida governor and rising star who has also won the backing of Rupert Murdoch’s conservative media empire.

The speech is also set for the day that another possible 2024 rival — former vice president Mike Pence — publishes his memoirs recounting the pressure Trump laid on him to overturn the last election. 

Trump’s new White House pursuit will be hampered by the multiple investigations into his conduct before, during and after the presidency — which could result in his disqualification.

Those include allegations of fraud by his family business, his role in last year’s January 6 attack on the US Capitol and his handling of classified documents at his private Florida home, which was raided by the FBI in August.

But the former president is no stranger to scandal and has even survived two impeachments due to his continued Republican support in Congress.

The 2024 election could yet prove to be a repeat of 2020, with Biden reaffirming on Wednesday that he intends to stand for reelection.

But despite the strong midterm results, some in Biden’s own camp would clearly prefer him to sit out, due to his age and unpopularity. Biden, 80, said he will make a final decision next year.

cjc/des/dw/ec

Seven killed as violence strikes two US universities

Seven university students were dead and at least one gunman was on the run Monday following weekend violence that struck two US campuses in the states of Idaho and Virginia, authorities said.

Police were hunting for the student suspect in a shooting that left three people dead and two others wounded at the University of Virginia about 100 miles (160 kilometers) southwest of the nation’s capital Washington.

The campus in Charlottesville, Virginia was locked down early Monday while helicopters and police searched for a man considered to be “armed and dangerous,” the UVA Office of Emergency Management tweeted.

A student at the university identified as Christopher Darnell Jones Jr was suspected to have carried out the shooting on campus Sunday night, UVA president Jim Ryan said in a statement.

“This is a traumatic incident for everyone in our community, and we have cancelled classes for today,” Ryan said.

Counseling and psychological support would be made available to students and faculty, he said.

Virginia Governor Glenn Youngkin said state officers were coordinating with the campus police department and local authorities.

“Please shelter in place while the authorities work to locate the suspect,” he wrote on Twitter.

More than 2,000 miles to the west in the Rocky Mountain state of Idaho, police were investigating a separate incident in which four students were found dead Sunday in a home near the University of Idaho campus, believed to be the “victims of homicide.”

Officers responded to a call in the town of Moscow, near the University of Idaho, about an unconscious individual.

“Upon arrival, officers discovered four individuals who were deceased,” police said in a statement.

“It is with deep sadness that I share with you that the university was notified today of the death of four University of Idaho students living off-campus believed to be victims of homicide,” University of Idaho president Scott Green said in a statement.

Meanwhile near Michigan’s largest city Detroit, police were scouring Oakland University early Monday “to pursue two armed suspects on campus,” the school said in a Twitter statement as they urged students and faculty to stay away.

School shootings are alarmingly common as part of a broader wave of gun violence in the United States, where the proliferation of firearms has skyrocketed in recent years.

In May an 18-year-old gunman in Uvalde, Texas burst into Robb Elementary School and killed 19 students and two teachers, in an attack that shocked the nation and renewed calls for gun reform.

In 2007, Virginia Tech became the scene of the worst school shooting on record in the United States when a 23-year-old student killed 32 students and faculty members before committing suicide.

After Sunday’s UVA shooting, US Senator Tim Kaine of Virginia said he was “heartbroken to hear of another Virginia community devastated by gun violence.”

Stocks mostly rise, dollar up with focus on China, US

Stock markets mostly rose Monday after last week’s global surge, helped by China’s loosening of Covid rules and plans to help its property sector.

The dollar advanced against major rivals as traders urged caution over expectations that the Federal Reserve would pull back from massive US interest hikes as inflation cools in the world’s biggest economy.

Presidents Joe Biden and Xi Jinping meanwhile voiced hope Monday that the United States and China can manage growing differences and avoid conflict as they met for the first time in more than three years.

“The burst of euphoria which erupted… at the end of last week is ebbing away after fresh warnings that the fight against inflation is still a hard slog yet to be won,” noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Sentiment won a lift from China, which is relaxing some of its strict Covid-19 restrictions that have hammered growth in the world’s second largest economy.

Authorities have also reportedly unveiled a 16-point plan to support the beleaguered property sector, a major component of the country’s economic engine.

The industry has come under immense pressure since China imposed a number of restrictions in 2020 aimed at reeling in debt as major developers teetered on the brink of collapse.

The latest moves indicate that China’s leadership is beginning to focus on supporting the economy, a crucial driver of global growth, according to analysts.

Nomura’s Lu Ting warned, however, that the “measures may have little direct impact on stimulating home purchases”.

Hong Kong’s stock exchange ended more than one percent higher Monday — having soared over seven percent Friday.

Property firms were the best performers with Country Garden leading the way with a massive 40-percent jump.

– Key figures around 1200 GMT –

London – FTSE 100: UP 0.3 percent at 7,336.45 points

Frankfurt – DAX: UP 0.4 percent at 14,279.75

Paris – CAC 40: UP 0.3 percent at 6,612.61

EURO STOXX 50: UP 0.3 percent at 3,880.51

Tokyo – Nikkei 225: DOWN 1.1 percent at 27,963.47 (close)

Hong Kong – Hang Seng Index: UP 1.7 percent at 17,619.71 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,083.40 (close)

New York – Dow: UP 0.1 percent at 33,747.86 (close)

Euro/dollar: DOWN at $1.0280 from $1.0361 on Friday

Pound/dollar: DOWN at $1.1779 from $1.1839 

Dollar/yen: UP at 139.52 yen from 138.70 yen

Euro/pound: DOWN at 87.33 pence from 87.49 pence

West Texas Intermediate: DOWN 1.3 percent at $87.82 per barrel

Brent North Sea crude: DOWN 1.0 percent at $94.99 per barrel

Sri Lanka govt takes over $1.7 bn in debt owed to China

Crisis-hit Sri Lanka said Monday it would take responsibility for $1.7 billion owed to China by state enterprises as it seeks to sell them off and restructure its foreign debt to secure an IMF bailout.

The government of President Ranil Wickremesinghe is in talks with the Washington-based lender as it seeks funding to enable the island to recover from its worst-ever financial crisis.

His predecessor Gotabaya Rajapaksa was forced to flee the country and resign after demonstrators overran his house following months of protests over the unprecedented economic hardships faced by the 22 million population.

Sri Lanka defaulted on its foreign debt in April and the IMF has said its borrowings must be “sustainable” to unlock any new external funding.

That will require its creditors to take a haircut on their loans, but China is its biggest lender and Beijing has given no indication it is willing to do so.

Wickremesinghe said $1.7 billion in loans taken from China’s Export-Import Bank by three key loss-making state-owned enterprises (SOE) — the electricity utility, Port Authority, and Airport and Aviation Services — would be considered government debt.

Taking the loans off their books will strengthen their balance sheets, which could make them more attractive to buyers or outside investors.

The IMF has said the country should also restructure its loss-making state enterprises.

Wickremesinghe, who is also the finance minister, signalled the selling-off of five state-owned companies, including the national carrier SriLankan Airlines — which has debts of more than $1 billion — to reduce the strain on the national budget.

Proceeds from the “restructure” of the companies will be used to boost the country’s depleted foreign reserves, he said, without giving estimates.

“A glimmer of hope on emerging from the economic abyss is currently visible,” Wickremesinghe told parliament as he presented his first full budget in the legislature.

“After the era of waiting in queues for days and protesting in various occupied places, our sufferings have been eased to some extent and we have reached an era where our peace of mind is much settled.”

He said bailout talks with the International Monetary Fund were on track and hoped for a deal with lenders.

“We are confident that these discussions will lead to positive outcomes,” he added.

The government revised its external debt figure down from $51 billion to $46 billion. 

Just over $14 billion of that is bilateral debt owed to foreign governments, of which China holds 52 percent.

Wickremesinghe, a six-times prime minister, has sharply raised taxes and increased fuel, water and electricity tariffs and rationed petrol and diesel since coming to power in July.

Vuitton heir's apartment burgled in Paris

The Paris home of an heir of the Louis Vuitton luxury empire was burgled at the weekend, sources close to the case said Monday, with thieves taking high-end watches, jewelry and bags.

Benoit-Louis Vuitton, a sixth generation descendant of the fashion house’s founder, lives in the swanky seventh district of the capital near the Invalides military museum.

The exact value of the pieces taken was still being evaluated, but they are worth at least several hundreds of thousands of euros (dollars), the sources said.

An investigation is underway, the Paris prosecutors’ office said, with the capital’s anti-gang unit handling the case.

The Actu17 website, which first broke the news, put the value of the bounty at several million euros.

The burglary happened overnight Sunday to Monday, when the apartment was empty, it said, adding that some of the bags taken were “hugely valuable prototypes”.

Louis Vuitton, who founded his namesake luxury house in 1854 by making trunks, died aged 70 in 1892.

In 1987, the company merged with champagne maker Moet et Chandon and cognac brand Hennessy to create LVMH, which is now the world’s biggest luxury company, grouping 75 brands and employing 175,000 people.

Louis Vuitton bags, with the famous “LV” monogram, are among the world’s most prestigious fashion items and often copied by counterfeiters.

Last week, fake Louis Vuitton bags were among nearly one million euros’ worth of knock-offs police found in a raid on a clandestine outlet near Paris.

In September, a group of armed robbers stole 300 Louis Vuitton bags from a sub-contractor working for the company, with their retail value estimated at several hundreds of thousands of euros. 

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