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Video-game market recovery to pick up steam in 2024 on strong console sales – report

(Reuters) – A recovery in the global video-game market is expected to pick up pace this year on the back of strong sales of Microsoft’s Xbox and Sony’s PlayStation 5 consoles, according to research firm NewZoo.

The market is set to grow 2.8% to $189.3 billion in 2024, after it rose around 0.6% last year and ended a post-COVID decline that had led to layoffs at several video-game firms, NewZoo said.

After two years of pandemic-fueled growth, the gaming market fell 4.3% in 2022, according to an earlier NewZoo report, as gamers grappled with high interest rates, stubborn inflation and a lack of big titles.

The recovery in 2023 was driven by the release of several big titles, including Electronic Arts’ “Star Wars Jedi: Survivor” and “FC 24” soccer title, as well as “Hogwarts Legacy” from Warner Bros Discovery.

“Even though this year’s release catalog is expected to be less impressive than 2023’s absolutely packed schedule of much-anticipated hits, live-service games and back catalog sales will drive growth” in console sales in 2024, NewZoo said in a report.

The prediction mirrors the view at Sony, which expects to sell 25 million units of its PlayStation 5 in the 12 months ending March thanks to a new, slimmer version of the device.

Live-service games, such as Epic Games’ “Fortnite”, have become a major driver of gaming revenue in recent years as their free-to-play model and content updates attract a large number of users and keep them engaged.

But there are signs the model was under pressure. NewZoo said user engagement data from 2023 showed people are moving away from live-service games and opting for premium games.

It also noted that growth of gaming subscription services like PlayStation Plus and Xbox Game Pass – where users pay a fee to access to a bevy of titles – was expected to slow this year.

“2024 should not be marked by as many major disruptions and should instead remain in a form of continuity with what has already been observed recently,” Ubisoft Entertainment Market Strategy Manager Romain Bingler said in the report.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Varun H K)

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Henry Kissinger, American diplomat and Nobel winner, dead at 100

By Steve Holland and Arshad Mohammed

WASHINGTON (Reuters) -Henry Kissinger, a diplomatic powerhouse whose roles as a national security adviser and secretary of state under two presidents left an indelible mark on U.S. foreign policy and earned him a controversial Nobel Peace Prize, died on Wednesday at age 100.

Kissinger died at his home in Connecticut, according to a statement from his geopolitical consulting firm, Kissinger Associates Inc. No mention was made of the circumstances.

It said he would be interred at a private family service, to be followed at a later date by a public memorial service in New York City.

Kissinger had been active late in life, attending meetings in the White House, publishing a book on leadership styles, and testifying before a Senate committee about the nuclear threat posed by North Korea. In July 2023 he made a surprise visit to Beijing to meet Chinese President Xi Jinping.

During the 1970s in the midst of the Cold War, he had a hand in many of the epoch-changing global events of the decade while serving as national security adviser and secretary of state under Republican President Richard Nixon.

The German-born Jewish refugee’s efforts led to the U.S. diplomatic opening with China, landmark U.S.-Soviet arms control talks, expanded ties between Israel and its Arab neighbors, and the Paris Peace Accords with North Vietnam.

Kissinger’s reign as the prime architect of U.S. foreign policy waned with Nixon’s resignation in 1974 amid the Watergate scandal. Still, he continued to be a diplomatic force as secretary of state under Nixon’s successor, President Gerald Ford, and to offer strong opinions throughout the rest of his life.

While many hailed Kissinger for his brilliance and broad experience, others branded him a war criminal for his support for anti-communist dictatorships, especially in Latin America. In his latter years, his travels were circumscribed by efforts by other nations to arrest or question him about past U.S. foreign policy.

His 1973 Peace Prize was awarded for ending American involvement in the Vietnam War but it was one of the most controversial ever. Two members of the Nobel committee resigned over the selection as questions arose about the secret U.S. bombing of Cambodia. North Vietnamese diplomat Le Duc Tho was selected to jointly receive the award but declined it.

Ford called Kissinger a “super secretary of state” but also noted his prickliness and self-assurance, which critics were more likely to call paranoia and egotism. Even Ford said, “Henry in his mind never made a mistake.”

“He had the thinnest skin of any public figure I ever knew,” Ford said in an interview shortly before his death in 2006.

With his dour expression and gravelly, German-accented voice, Kissinger possessed an image of both a stuffy academic and a ladies’ man, squiring starlets around Washington and New York in his bachelor days. Power, he said, was the ultimate aphrodisiac.

Voluble on policy, Kissinger was reticent on personal matters, although he once told a journalist he saw himself as a cowboy hero, riding off alone.

HARVARD FACULTY

Heinz Alfred Kissinger was born in Furth, Germany, on May 27, 1923, and moved to the United States with his family in 1938 before the Nazi campaign to exterminate European Jewry.

Anglicizing his name to Henry, Kissinger became a naturalized U.S. citizen in 1943, served in the Army in Europe in World War Two, and attended Harvard University on a scholarship, earning a master’s degree in 1952 and a doctorate in 1954. He was on Harvard’s faculty for the next 17 years.

During much of that time, Kissinger served as a consultant to government agencies, including in 1967 when he acted as an intermediary for the State Department in Vietnam. He used his connections with President Lyndon Johnson’s administration to pass on information about peace negotiations to the Nixon camp.

When Nixon’s pledge to end the Vietnam War helped him win the 1968 presidential election, he brought Kissinger to the White House as national security adviser.

But the process of “Vietnamization” – shifting the burden of the war from the 500,000-troop U.S. forces to the South Vietnamese – was long and bloody, punctuated by massive U.S. bombing of North Vietnam, the mining of the North’s harbors, and the bombing of Cambodia.

Kissinger declared in 1972 that “peace is at hand” in Vietnam but the Paris Peace Accords reached in January 1973 were little more than a prelude to the final Communist takeover of the South two years later.

In 1973, in addition to his role as national security adviser, Kissinger was named secretary of state – giving him unchallenged authority in foreign affairs.

An intensifying Arab-Israeli conflict launched Kissinger on his first so-called “shuttle” mission, a brand of highly personal, high-pressure diplomacy for which he became famous.

Thirty-two days spent shuttling between Jerusalem and Damascus helped Kissinger forge a long-lasting disengagement agreement between Israel and Syria in the Israeli-occupied Golan Heights.

In an effort to diminish Soviet influence, Kissinger reached out to its chief communist rival, China, and made two trips there, including a secret one to meet with Premier Zhou Enlai. The result was Nixon’s historic summit in Beijing with Chairman Mao Zedong and the eventual formalization of relations between the two countries.

Former U.S. ambassador to China Winston Lord, who served as Kissinger’s special assistant, saluted his former boss as a “tireless advocate for peace,” telling Reuters, “America has lost a towering champion for the national interest.”

STRATEGIC ARMS ACCORD

The Watergate scandal that forced Nixon to resign barely grazed Kissinger, who was not connected to the cover-up and continued as secretary of state when Ford took office in the summer of 1974. But Ford did replace him as national security adviser in an effort to hear more voices on foreign policy.

Later that year Kissinger went with Ford to Vladivostok in the Soviet Union, where the president met Soviet leader Leonid Brezhnev and agreed to a basic framework for a strategic arms pact. The agreement capped Kissinger’s pioneering efforts at detente that led to a relaxing of U.S.-Soviet tensions.

But Kissinger’s diplomatic skills had their limits. In 1975, he was faulted for failing to persuade Israel and Egypt to agree to a second-stage disengagement in the Sinai.

And in the India-Pakistan War of 1971, Nixon and Kissinger were heavily criticized for tilting toward Pakistan. Kissinger was heard calling the Indians “bastards” – a remark he later said he regretted.

Like Nixon, he feared the spread of left-wing ideas in the Western hemisphere, and his actions in response were to cause deep suspicion of Washington from many Latin Americans for years to come.

In 1970 he plotted with the CIA on how best to destabilize and overthrow the Marxist but democratically elected Chilean President Salvador Allende, while he said in a memo in the wake of Argentina’s bloody coup in 1976 that the military dictators should be encouraged.

When Ford lost to Jimmy Carter, a Democrat, in 1976, Kissinger’s days in the suites of government power were largely over. The next Republican in the White House, Ronald Reagan, distanced himself from Kissinger, who he viewed as out of step with his conservative constituency.

After leaving government, Kissinger set up a high-priced, high-powered consulting firm in New York, which offered advice to the world’s corporate elite. He served on company boards and various foreign policy and security forums, wrote books, and became a regular media commentator on international affairs.

After the Sept. 11, 2001, attacks, President George W. Bush picked Kissinger to head an investigative committee. But outcry from Democrats who saw a conflict of interest with many of his consulting firm’s clients forced Kissinger to step down from the post.

Divorced from his first wife, Ann Fleischer, in 1964, he married Nancy Maginnes, an aide to New York Governor Nelson Rockefeller, in 1974. He had two children by his first wife.

(Reporting by Steve Holland in Washington and Arshad Mohammed in Saint Paul, Minnesota; Additional reporting by Dan Whitcomb in Long Beach, California; Editing by Bill Trott, Diane Craft and Rosalba O’Brien)

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EU lawmakers urge COP28 climate summit to take aim at fossil fuels

By Kate Abnett

BRUSSELS (Reuters) – The European Parliament called on Tuesday for a global deal at the U.N. COP28 climate summit to phase out fossil fuels, aiming to add pressure on countries to tackle CO2-emitting oil and gas.

The push by European Union lawmakers comes before nearly 200 countries meet to discuss stronger climate change action at the COP28 conference in Dubai from Nov. 30 to Dec. 12.

The meeting should agree to “a tangible phase-out of fossil fuels as soon as possible, to keep 1.5°C within reach, including by halting all new investments in fossil fuel extraction,” the EU Parliament said in a resolution.

The EU Parliament is not directly involved in COP28 negotiations, but sends a delegation to meet other countries’ representatives and negotiates the EU’s domestic climate policies that ensure it keeps the pledges made at COP meetings.

Countries agreed under the 2015 Paris Agreement to take action to stop the planet becoming more than 1.5 degrees Celsius hotter than in preindustrial times, a limit that if breached would unleash far more disastrous extreme weather.

They are far off track. Countries’ current emissions targets would lead to nearly 3°C of warming this century, the United Nations said on Monday in a report calling for urgent action to cut emissions faster.

EU lawmakers passed the resolution with 462 votes in favour, 134 against and 30 abstentions.

Green lawmaker Pär Holmgren, one of its co-authors, said the time for debating how quickly to tackle climate change had passed.

“We need to start work and understand that we are already in the crisis of climate change,” Holmgren said.

They also urged governments to end fossil fuel subsidies by 2025 and said the EU should contribute to a new climate damage fund set to be launched at COP28, “by making significant multi-year pledges”.

The lawmakers’ call goes beyond EU countries’ official negotiating position for the start of the talks – which can change as the negotiations unfold.

EU countries plan to seek a phase-out of “unabated” fossil fuels. That leaves a window for countries to keep burning coal, gas and oil if they use technology to “abate” – meaning capture – the resulting emissions.

(Reporting by Kate Abnett; Editing by Janet Lawrence)

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Britain to launch South Korea trade talks as president visits

By Alistair Smout

LONDON (Reuters) -Britain rolled out the red carpet for South Korea’s president on Tuesday at the start of a state visit intended to deepen diplomatic and business ties between the two countries as they launch talks on a new free trade agreement.

King Charles greeted President Yoon Suk Yeol with a royal guard of honour following his arrival in London on a three-day trip marking 140 years of diplomatic ties between Britain and South Korea, and then took him by carriage to Buckingham Palace.

Yoon, a conservative who has cited a “polycrisis” of global challenges as a reason for seeking closer ties with like-minded partners, was due to address lawmakers from both houses of parliament on Tuesday before a state banquet in his honour.

He will hold talks with British Prime Minister Rishi Sunak on Wednesday, and sign an accord on closer diplomatic ties.

“Through our new Downing Street Accord, we will drive investment, boost trade and build a friendship that not only supports global stability, but protects our interests and lasts the test of time,” Sunak said.

In a statement announcing that talks on a new Free Trade Agreement (FTA) would also start on Wednesday, Sunak said: “I know a Free Trade Agreement fit for the future will only drive further investment, delivering on my promise to grow the economy and support highly skilled jobs.”

Under the accord, the countries will agree to work closely on areas such as semiconductors – of which South Korea is an important producer – and artificial intelligence.

The Downing Street Accord will also strengthen Britain and South Korea’s joint ability to enforce U.N. sanctions against North Korea to prevent development of its nuclear weapons programmes, using sea patrols to prevent smuggling.

Britain said South Korean businesses would invest 21 billion pounds ($26.17 billion) in British renewable energy and infrastructure projects, and announced a clean energy partnership to work together on the transition to green power.

Speaking to members of the South Korean community, Yoon said South Korea and Britain were partners that shared universal values of freedom, human rights and rule of law, and form an economic community through trade, Yonhap news reported.

“REFRESHED, MODERNISED DEAL”

Under Yoon, South Korea has focused on strengthening economic, political, and military ties with the United States while seeking to maintain trade with China and working to overcome historical disputes with Japan.

“With the resumption of the free trade talks, we will lay the basis for supply chain management and mutual cooperation,” he was quoted as telling the event in London.

He said the two countries would also expand cooperation in cybersecurity and defence industry.

Britain is building its own ties in the Indo-Pacific as part of a tilt in its diplomatic strategy towards the region, and this year completed talks to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

The talks on a new trade deal with South Korea will aim to replace a carry-over agreement from when Britain left the European Union, which was based on replicating a deal with the EU from 2011 and reduced tariffs in a range of areas.

Britain said it hoped a new trade deal would pave the way for increased digital trade and streamline complex procedures, and have a new rules of origin chapter.

“This refreshed, modernised deal will boost our world-leading services sector, while also creating new opportunities for UK exports,” said British business and trade minister Kemi Badenoch.

($1 = 0.8025 pounds)

(Reporting by Alistair Smout, Kylie MacLellan and Sarah Young in London, additional reporting by Josh Smith in Seoul; Editing by Alistair Bell, Stephen Coates and Timothy Heritage)

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Factbox-What is OPEC+ and how does it impact oil prices?

(Reuters) – The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, are known as OPEC+ and will meet in Vienna, Austria, on Nov. 26 to discuss their joint output policy.

Below are key facts about OPEC+ and its role.

What are OPEC and OPEC+?

OPEC was founded in 1960 in Baghdad by Iraq, Iran, Kuwait, Saudi Arabia and Venezuela with an aim of coordinating petroleum policies and securing fair and stable prices. Now, it includes 13 countries, which are mainly from the Middle East and Africa. They produce around 30% of the world’s oil.

There have been some challenges to OPEC’s influence over the years, often resulting in internal divisions, and a global push towards cleaner energy sources and a move away from fossil fuels could ultimately diminish its dominance.

OPEC formed the so-called OPEC+ coalition with 10 of the world’s major non-OPEC oil-exporting nations, including Russia, at the end of 2016.

OPEC+ represents around 40% of world oil production and its main objective is to regulate the supply of oil to the world market. The leaders are Saudi Arabia and Russia, which produce around 9 and 9.5 million barrels per day (bpd) of oil, respectively.

How does OPEC influence global oil prices?

OPEC member states’ exports make up around 60% of global petroleum trade. In 2021, OPEC estimated that its member countries accounted for more than 80% of the world’s proven oil reserves.

Because of the large market share, the decisions OPEC makes can affect global oil prices. Its members meet regularly to decide how much oil to sell on global markets.

As a result, when they lower supply when demand falls, oil prices tend to rise. Prices tend to fall when the group decides to supply more oil to the market.

At the last OPEC+ meeting in June, Saudi Arabia pledged to make a deep cut of 1 million bpd to its output in July on top of a broader OPEC+ deal to limit supply into 2024 as the group sought to boost flagging oil prices.

Since then, Saudi Arabia has extended the additional voluntary cut until the end of this year.

Oil prices on Nov. 16 slumped by about 5% to a four-month low amid economic growth concerns. They have since recovered some ground on expectations that OPEC+ will take action to shore up prices.

Prices, however, have largely brushed off rising tensions in the Middle East.

How do OPEC decisions affect the global economy?

Some of the production cut decisions have had significant effects on the global economy.

During the 1973 Arab-Israeli War, Arab members of OPEC imposed an embargo against the United States in retaliation for its decision to re-supply the Israeli military, as well as other countries that supported Israel. The embargo banned petroleum exports to those nations and introduced cuts in oil production.

The oil embargo pressured an already strained U.S. economy which had grown dependent on imported oil. Oil prices jumped, causing high fuel costs for consumers and fuel shortages in the United States. The embargo also brought the United States and other countries to the brink of a global recession.

In 2020, during COVID-19 lockdowns around the world, crude oil prices slumped. After that development, OPEC+ slashed oil production by 10 million barrels a day, which is equivalent to around 10% of global production, to try to bolster prices.

Which countries are OPEC members?

The current members of OPEC are: Saudi Arabia, United Arab Emirates, Kuwait, Iraq, Iran, Algeria, Angola, Libya, Nigeria, Congo, Equatorial Guinea, Gabon and Venezuela.

Non-OPEC countries in the global alliance of OPEC+ are represented by Russia, Azerbaijan, Kazakhstan, Bahrain, Brunei, Malaysia, Mexico, Oman, South Sudan and Sudan.

Sources: Reuters news, World Economic Forum website, OPEC website, U.S. Department of State website

(Reporting by Nina Chestney, Ahmad Ghaddar and Olesya Astakhova; Editing by Emelia Sithole-Matarise)

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Analysis-What China’s Xi gained from his Biden meeting

By Michael Martina, Trevor Hunnicutt and Greg Torode

SAN FRANCISCO/HONG KONG (Reuters) -When Chinese President Xi Jinping met executives for dinner on Wednesday night in San Francisco, he was greeted with not one, but three standing ovations from the U.S. business community.

It was one of several public relations wins for the Chinese leader on his first trip in six years to the United States, where he and President Joe Biden reached agreements covering fentanyl, military communications and artificial intelligence on the sidelines of the Asia-Pacific Economic Cooperation summit.

All three were outcomes the United States had sought from China rather than the other way around, said two people briefed on the trip.

But Xi appeared to have achieved his own aims: earning U.S. policy concessions in exchange for promises of cooperation, an easing of bilateral tensions that will allow more focus on economic growth, and a chance to woo foreign investors who increasingly shun China.

“We invite friends from business communities across the world to invest and deepen your footprint in China,” he said at an APEC CEO summit, promising action on the list of items that irk foreign investors, from intellectual property theft to data security.

China’s economy is slowing and earlier this month it reported its first quarterly deficit in foreign direct investment. And the ruling Communist Party has battled political intrigues that have raised questions about Xi’s decision-making, including the sudden and unexplained removals of his foreign minister and defense minister.

“If the U.S. and China can manage their differences … it will mean that Xi Jinping doesn’t have to divert all of his attention to that (bilateral relations),” said Alexander Neill, an adjunct fellow at Hawaii’s Pacific Forum think-tank.

“He needs to focus on his domestic agenda, which is incredibly pressing.”

DROPPING SANCTIONS FOR COOPERATION

Securing Xi’s promise of Chinese cooperation on stemming the flow of fentanyl to the United States was high on Biden’s to-do list for the summit. A senior U.S. official said the agreement under which China would go after specific companies that produce fentanyl precursors was made on a “trust but verify” basis.

In return, the U.S. government on Thursday removed a Chinese public security forensic institute from a Commerce Department trade sanction list, where it was placed in 2020 over alleged abuses against Uyghurs, a long-sought diplomatic aim for China.

Critics warned removing sanctions against the institute signals to Beijing that U.S. entity listings are negotiable, and have questioned the Biden administration’s commitment to pressuring China over what it says is the Chinese government’s genocide of Uyghurs.

“This undermines the credibility of our entity list and our moral authority,” said a spokesperson for the Republican-led House of Representative’s select committee on China.

On top of that, Biden’s Republican opponents argue the U.S. is missing an opportunity by not leveraging China’s flagging economic momentum for more diplomatic gains.

Biden also touted as a success an agreement to resume military dialogues cut by China following then-U.S. House Speaker Nancy Pelosi’s 2022 trip to Chinese-claimed Taiwan.

But while Beijing would welcome lower tensions, this is unlikely to change Chinese military behavior the U.S. sees as dangerous, such as intercepts of U.S. ships and aircraft in international waters that have led to a number of near-misses.

“China fears hotlines could be used as a potential pretext for a U.S. presence in areas it claims as its own,” said Craig Singleton, a China expert at the Foundation for Defense of Democracies in Washington.

Biden administration officials have acknowledged that creating functional military relations won’t be as easy as semi-regular meetings between defense officials.

“This is a long, hard, slow slog and the Chinese have to see value in that mil-mil before they’ll do it. That’s not going to be a favor to us,” one senior Biden administration told Reuters in October in the run-up to the Xi-Biden meeting.

PARTNER AND FRIEND?

In his public remarks to Biden, Xi suggested China sought peaceful coexistence with the United States, and he told business leaders China was ready to be a “partner and friend” to the U.S., words partially aimed at a business community alarmed by China’s crackdown on various industries and the use of exit bans and detentions against some executives.

Similarly, Xi’s televised garden walk with Biden, and the largely respectful reception given to Xi by his American hosts, was highlighted in China’s tightly controlled media to show a domestic audience that their president is managing the country’s most important economic and political relationship.

“Xi Jinping may have made the calculation that overhyping the American threat does China and his standing in the party and the party itself more harm than good,” said Drew Thompson, a former Pentagon official who is now a scholar at the National University of Singapore.

“The fact that we are debating whether China is investible is a real problem for China.”

At the same time, Xi reiterated to Biden points that he made earlier this year to Russian President Vladimir Putin, urging the U.S. president to view U.S.-China relations through “accelerating global transformations unseen in a century.”

Analysts say that is code for the belief that China – and Russia – are remolding the U.S.-led international system.

Still, this time pragmatism may have outweighed ideology.

China recognizes it’s still necessary for its economic progress to have somewhat normal relations with the U.S. and Western countries, said Li Mingjiang, a professor at the Rajaratnam School of International Studies in Singapore.

“It’s the fundamental driving force behind the meeting.”

(Reporting by Michael Martina and Greg Torode; Additional reporting by Antoni Slodkowski and Laurie Chen in Beijing; Editing by Don Durfee and Tom Hogue)

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Analysis-What China’s Xi gained from his Biden meeting

By Michael Martina, Trevor Hunnicutt and Greg Torode

SAN FRANCISCO/HONG KONG (Reuters) -When Chinese President Xi Jinping met executives for dinner on Wednesday night in San Francisco, he was greeted with not one, but three standing ovations from the U.S. business community.

It was one of several public relations wins for the Chinese leader on his first trip in six years to the United States, where he and President Joe Biden reached agreements covering fentanyl, military communications and artificial intelligence on the sidelines of the Asia-Pacific Economic Cooperation summit.

All three were outcomes the United States had sought from China rather than the other way around, said two people briefed on the trip.

But Xi appeared to have achieved his own aims: earning U.S. policy concessions in exchange for promises of cooperation, an easing of bilateral tensions that will allow more focus on economic growth, and a chance to woo foreign investors who increasingly shun China.

“We invite friends from business communities across the world to invest and deepen your footprint in China,” he said at an APEC CEO summit, promising action on the list of items that irk foreign investors, from intellectual property theft to data security.

China’s economy is slowing and earlier this month it reported its first quarterly deficit in foreign direct investment. And the ruling Communist Party has battled political intrigues that have raised questions about Xi’s decision-making, including the sudden and unexplained removals of his foreign minister and defense minister.

“If the U.S. and China can manage their differences … it will mean that Xi Jinping doesn’t have to divert all of his attention to that (bilateral relations),” said Alexander Neill, an adjunct fellow at Hawaii’s Pacific Forum think-tank.

“He needs to focus on his domestic agenda, which is incredibly pressing.”

DROPPING SANCTIONS FOR COOPERATION

Securing Xi’s promise of Chinese cooperation on stemming the flow of fentanyl to the United States was high on Biden’s to-do list for the summit. A senior U.S. official said the agreement under which China would go after specific companies that produce fentanyl precursors was made on a “trust but verify” basis.

In return, the U.S. government on Thursday removed a Chinese public security forensic institute from a Commerce Department trade sanction list, where it was placed in 2020 over alleged abuses against Uyghurs, a long-sought diplomatic aim for China.

Critics warned removing sanctions against the institute signals to Beijing that U.S. entity listings are negotiable, and have questioned the Biden administration’s commitment to pressuring China over what it says is the Chinese government’s genocide of Uyghurs.

“This undermines the credibility of our entity list and our moral authority,” said a spokesperson for the Republican-led House of Representative’s select committee on China.

On top of that, Biden’s Republican opponents argue the U.S. is missing an opportunity by not leveraging China’s flagging economic momentum for more diplomatic gains.

Biden also touted as a success an agreement to resume military dialogues cut by China following then-U.S. House Speaker Nancy Pelosi’s 2022 trip to Chinese-claimed Taiwan.

But while Beijing would welcome lower tensions, this is unlikely to change Chinese military behavior the U.S. sees as dangerous, such as intercepts of U.S. ships and aircraft in international waters that have led to a number of near-misses.

“China fears hotlines could be used as a potential pretext for a U.S. presence in areas it claims as its own,” said Craig Singleton, a China expert at the Foundation for Defense of Democracies in Washington.

Biden administration officials have acknowledged that creating functional military relations won’t be as easy as semi-regular meetings between defense officials.

“This is a long, hard, slow slog and the Chinese have to see value in that mil-mil before they’ll do it. That’s not going to be a favor to us,” one senior Biden administration told Reuters in October in the run-up to the Xi-Biden meeting.

PARTNER AND FRIEND?

In his public remarks to Biden, Xi suggested China sought peaceful coexistence with the United States, and he told business leaders China was ready to be a “partner and friend” to the U.S., words partially aimed at a business community alarmed by China’s crackdown on various industries and the use of exit bans and detentions against some executives.

Similarly, Xi’s televised garden walk with Biden, and the largely respectful reception given to Xi by his American hosts, was highlighted in China’s tightly controlled media to show a domestic audience that their president is managing the country’s most important economic and political relationship.

“Xi Jinping may have made the calculation that overhyping the American threat does China and his standing in the party and the party itself more harm than good,” said Drew Thompson, a former Pentagon official who is now a scholar at the National University of Singapore.

“The fact that we are debating whether China is investible is a real problem for China.”

At the same time, Xi reiterated to Biden points that he made earlier this year to Russian President Vladimir Putin, urging the U.S. president to view U.S.-China relations through “accelerating global transformations unseen in a century.”

Analysts say that is code for the belief that China – and Russia – are remolding the U.S.-led international system.

Still, this time pragmatism may have outweighed ideology.

China recognizes it’s still necessary for its economic progress to have somewhat normal relations with the U.S. and Western countries, said Li Mingjiang, a professor at the Rajaratnam School of International Studies in Singapore.

“It’s the fundamental driving force behind the meeting.”

(Reporting by Michael Martina and Greg Torode; Additional reporting by Antoni Slodkowski and Laurie Chen in Beijing; Editing by Don Durfee and Tom Hogue)

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Sweden plans new nuclear reactors by 2035, will share costs

By Simon Johnson

STOCKHOLM (Reuters) – Sweden’s government said it aimed to build the equivalent of two new conventional nuclear reactors by 2035 on Thursday to meet surging demand for clean power from industry and transport and was prepared to take on some of the costs.

By 2045 the government wants to have the equivalent of 10 new reactors, some of which are likely to be small modular reactors (SMRs), smaller than conventional reactors.

Energy Minister Ebba Busch said the government was planning a “massive build out” of new nuclear power by 2045.

“It’s decisive for the green transition, for Swedish jobs and at heart for the welfare of our citizens,” she told reporters.

Countries like Poland, the Czech Republic, and Britain are looking at expanding nuclear power as societies transition to a fossil-fuel free future.

But critics have pointed to the huge costs and the private sector’s reluctance to invest without guarantees or other incentives – like Britain’s deal with French nuclear developer EDF for its new Hinkley Point C plant which gave price guarantees.

Sweden’s government has already offered 400 billion crowns ($37.71 billion) of loan guarantees to support new nuclear power, which it says is needed to power developments like fossil-fuel free steel production, but said it was now willing to shoulder more of the burden.

“Guarantees are very important, but that won’t be enough,” Finance Minister Elisabeth Svantesson said. “For this type of infrastructure it is going to require the state to take part and share the risk.”

The government said it had not yet decided what kind of funding model it would adopt, but stressed that the private sector was ready to invest in building new plants given the right circumstances. Energy Minister Busch said state-owned Vattenfall, Finland’s Fortum and Germany’s Uniper were among those who had expressed interest.

Sweden voted to get rid of nuclear power in 1980, and has only six of an original 12 reactors still in production.

The current right wing government wants to replace old reactors and expand the fleet to drive the electrification of industry and transport.

The government has forecast that electricity demand will rise to around 300 Twh by 2045 as a result of the transition to a fossil-free society, up from around 140 Twh currently.

($1 = 10.6072 Swedish crowns)

(Reporting by Simon Johnson; Editing by Chizu Nomiyama and Elaine Hardcastle)

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Analysis-Santa’s sleigh to be lighter as people buy fewer toys

By Richa Naidu and Aishwarya Venugopal

LONDON (Reuters) – Santa Claus may not have as much to give this year because hard up shoppers in Europe and the United States are prioritizing food and household staples, global toy makers and industry experts said.

Consumers worldwide have struggled to cope with high inflation and sluggish economic growth. The holiday season, which begins with Black Friday at the end of November and lasts roughly until the end of December, is expected to be especially tough for retailers selling discretionary items, executives say.

Favourites such as Barbie dolls, Transformers action figures and Hot Wheels cars will still be at the top of children’s wish list, said Loo Wee Teck, consumer electronics industry manager at Euromonitor International.

But many parents can’t afford them this year, according to executives. The top selling Barbie doll on Amazon, “Barbie Pop Reveal”, currently costs parents 19.99 pounds ($24.89). Meanwhile, Hot Wheels’ Scorpion play set was 35 pounds in 2020, according to parent blogs, but the same toy is about 60 pounds on Amazon.co.uk this year.

“The most important thing for people this holiday is to have food on the table for their families,” Isaac Larian, CEO of Bratz doll maker MGA Entertainment, said in an interview.

Toymakers Hasbro and Mattel have already warned of weaker industry sales. But trading could prove even tougher than expected, executives at four toymakers and experts told Reuters.

Larian is expecting holiday sales at his company, which also makes Little Tikes toys and sells products across Europe and the United States, to decline by 10-12% worldwide versus last year.

Demand in the lead up to Christmas will be “smaller” than last year, said Nic Aldridge, managing director at Bandai, the maker of Tamagotchi virtual pets.

Aldridge anticipates more price cuts as retailers look to shift older products.

“The was an abundance of supply from previous years so there is a lot of clearance stock and a lot of deep discounting,” he said.

BLACK FRIDAY OFFERS CLUES

Global sales of action figures like Transformers and Spiderman are projected to decline by 2% this year, Euromonitor

forecasts.

Anticipating the lower demand and already holding surplus inventory, many retailers ordered in less product than usual this year. That means products that are in demand may sell out quickly. Black Friday will give retailers an early indication.

“We are seeing some early Black Friday sales start just now,” Barbie maker Mattel’s president and chief commercial officer, Steve Totzke, told Reuters on Monday.

Mattel’s inventory levels at the end of the third quarter declined by double-digit percentage versus the prior year, with weeks of supply down high single digits, it said last month.

MGA Entertainment ordered and made less product, Larian said, because it wanted to be “cautious and conservative” but now expects to run out of some new toys as a result.

U.S. imports of toys fell by 32% year over year in the three months to Aug. 31, 2023 in dollar terms, according to S&P Global Market Intelligence’s trade data firm Panjiva. That’s usually a key ordering period for holiday stock. Shipments by sea – measured by number of containers – fell by 8% in September.

“The market for toys has been declining for the whole year,” said Florian Sieber, CEO of German toy maker Simba. Demand from consumers in Europe is lower than last year and last year was already down from the previous year, Sieber added.

Still, some anticipate a late surge in demand.

“We are expecting a good holiday season for Mattel,” Totzke said. “We expect to continue to gain share throughout the holiday season.”

Frédérique Tutt, Global Toys Advisor at data firm Circana, formerly NPD, said toy sales were down about 7% year-on-year in countries it tracks in the first nine months of the year, but that she expects shoppers to come through in the three weeks before Christmas. The categories with the best performance to date are games and puzzles, plush, building sets and vehicles, she said.

“There’ll be some money set aside for toys,” said Jerry Storch, chief executive officer of consultancy Storch Advisors and former CEO of Toys-R-Us and Hudson’s Bay Co. “But it’s a reality that there won’t be as many toys sold this year as last year.”

($1 = 0.8032 pounds)

(Reporting by Richa Naidu; Editing by Matt Scuffham)

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Analysis-Europe’s problems are far bigger than a shallow recession

By Balazs Koranyi

FRANKFURT (Reuters) – The euro zone appears to be in the middle of another recession but worries about whether definitive growth figures due early next year will have a plus or minus sign in front are missing the bigger picture.

The good news is that the 20-nation currency union is set to avoid a deep contraction that could scar firms, households and banks for years. The bad news is that growth is hovering around zero with little out there to fuel a meaningful recovery.

Economic headwinds are so strong that next year will also be challenging and fading growth potential suggests the euro zone would struggle to expand much more than 1% even with a robust rebound.

Deep structural problems mean Europe is bound to trail most other big economic areas for years to come.

NEAR TERM

The short term outlook is not great – but not terrible.

Data on Tuesday showed gross domestic product shrank 0.1% in July-September from the previous three months, pointing to a shallow recession, if a weak fourth quarter follows as early indicators suggest.

But growth has been broadly flat all year and record-high interest rates – a byproduct of the inflation surge – along with tighter budget spending will limit expansion to just 0.6% next year, according to a Reuters poll.

Optimists, including the European Central Bank’s chief economist Philip Lane, say that demand should recover as workers are now enjoying a rebound in real wages that will boost confidence.

The labour market remains tight and the world economy is rebounding, so external demand is also likely to be healthier.

But others say there is little to suggest the sort of rebound in confidence the ECB is banking on, citing high borrowing costs that hold back investment, a softening labour market and overseas demand falling short of what was hoped.

“Europe has been through a year of zero-growth and is now heading into a year in which both monetary and fiscal policies are designed to put a brake on growth,” UniCredit economics advisor Erik Nielsen said.

“The European economy has been flat on its back for a year (and) the monetary and fiscal policy plans for 2024 seem to accept the high probability of another lost year.”

POOR TREND

The outlook remains poor beyond next year.

Europe’s working-age population is set to shrink while productivity gains are small. Businesses complain that bureaucracy is increasing, making them less competitive, while the euro zone’s integration into an economic union has stalled with little apparent political will to move forward.

The European Commission now puts the bloc’s potential growth at less than 1.5%, shrinking to 1.2% by 2027, a decline from 2%-2.5% at the turn of the century and due mainly to demographic shifts and weak efficiency gains.

“Many countries, where they were in the 1990s, they’re behind that now. There’s not been progress – there has been regress,” the ECB’s Lane said recently.

“Over time, various types of reforms have been cancelled, various types of reforms been unwound. This is an avoidable own-goal,” he added.

Potential growth in the United States is meanwhile seen at around 1.8% and holding steady.

The drop in Europe’s working-age population could also come with a quirk. Fearing it will be difficult to hire in future, firms are now hanging onto workers, creating even more labour market tightness, potentially fuelling wage growth and weakening productivity.

“A structural shortage of qualified labour, aggravated by the demographic transition and skill mismatches, is prompting companies to hoard labour despite rising cost pressures and economic uncertainty,” UBS economist Reinhard Cluse said.

Germany appears to be the biggest drag. Its energy-intensive heavy industries rely on external demand for growth, leaving it poorly prepared for the new realities of expensive energy and trade tensions.

The potential growth rate for Europe’s largest economy is now below 1%.

European Union governments are meanwhile struggling to reach consensus on bigger questions that will help shape the future. These include what role migration should play in alleviating labour shortages, whether to form a true banking union, and if they should use centralised spending to tackle issues across the 27-nation bloc.

“Rather than being satisfied with growth rates around 1.2% on average, let’s be more ambitious,” Lane said.

(Editing by Mark John and Catherine Evans)

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Take Five: That rate cut trade

LONDON (Reuters) -Markets are keen to trade rate cuts and big central banks are pushing back, shining a new light on upcoming data in that tug of war.

China continues to battle its property demons while it is Italy’s turn to be in the eye of the ratings agencies after Moody’s on Friday lowered its U.S. rating outlook to “negative”.

Here is your week-ahead primer from Lewis Krauskopf in New York, Kevin Buckland in Tokyo, Danilo Masoni in Milan and Alun John and Dhara Ranasinghe in London.

1/ INFLATION WATCH

A slew of Federal Reserve policymakers including boss Jerome Powell say they are still not sure that rates are high enough to finish the battle with inflation.

Traders, anticipating roughly three quarter-point Fed rate cuts next year, will now turn their attention to Tuesday’s inflation data to confirm their view on the outlook.

The October consumer price index is expected to have climbed 0.1% on a monthly basis, according to a Reuters poll. September’s CPI rose 0.4% on a surprise surge in rental costs, but also showed a moderation in underlying inflation pressures.

A sharper cooling could fan the peak rate talk, fuelled by October’s employment report, which pointed to an easing in labor markets.

A federal government shutdown meanwhile looms if lawmakers in Washington are unable to pass a measure to at least temporarily fund operations before a Nov. 17 deadline.

Fresh wrangling could renew concerns about governance in the world’s biggest economy.

2/ TROUBLE AT HOME

The question of who will be left holding the bag filled with China’s property mess may have gone some way to being answered – much to the chagrin of Ping An shareholders.

Reuters reports that Beijing asked the insurer to take control of ailing Country Garden, China’s biggest private developer.

Ping An shares dived to one-year lows, in spite of the company’s denials. Worries about the sector continue to weigh.

Government measures to shore up the economy have repeatedly fallen flat this year, which has not deterred China’s central bank from professing the 5% growth target can be achieved, a view the IMF shares.

Data has pointed the other way, with more evidence of slowing factories and tepid consumption. Markets will see Wednesday if that trend continues, with October retail sales and industrial production data.

3/ ONCE BITTEN

The robust dollar suddenly appears vulnerable to the push and pull in the market’s Fed rate cut bets.

A bounce thanks to Fed chief Powell pushing back on talk that rates have peaked may not last as dollar bears grow confident that rate cuts are likely next year.

Take the latest Reuters poll: nearly two-thirds of analysts say the dollar is likely to trade lower by year-end.

Long dollar positions are decreasing. SocGen reckons dollar/yen could fall back to around 145-150. It rose to a one-year high on Monday at 151.80.

Rate-cut talk is dollar negative but a sharply slowing U.S. economy that hurts the world could quickly bring back demand for the safe-haven currency.

4/ SUNAK’S SCORECARD

UK inflation has been stickier than in most developed economies.

That is bad news for consumers, the Bank of England, and Prime Minister Rishi Sunak, who pledged at the start of 2023 to halve inflation, then running at over 10%, by year end.

October CPI data, due on Wednesday, will show whether Sunak is starting to get close to that goal. A slowdown from September’s 6.7% is likely, but by how much?

The data could also help justify, or challenge, recent remarks from BoE chief economist Huw Pill that mid-2024 could be the time for rate cuts. Latest British jobs figures, retail sales and the producer price index are also on the calendar.

Euro zone flash third-quarter GDP data out on Tuesday is in focus given signs of economic weakness in Germany, the bloc’s largest economy, and described by some this year as the “sick man of Europe”.

5/ ITALY RISK

Italy is back on the worry list with many investors concerned about growing fiscal risks steering clear of big exposure to the euro zone’s third-largest economy.

Moody’s, which rates Italy just one notch above junk with a negative outlook, reviews the sovereign on Nov. 17. Fitch’s latest review is due after Friday’s market close.

A Moody’s downgrade is the bigger risk given its Italy outlook and such a move could see the closely watched 10-year bond yield gap over Germany pop to 250 bps, with potential ramifications across the periphery.

Italian stocks meanwhile are trading at a 50% discount to world stocks, the widest gap since 1988.

There is a silver lining. Stronger balance sheets mean banks are less vulnerable to bond turmoil than in the past and with parts of the equity market so deeply discounted, some see a buying opportunity that cannot be ignored.

(Graphics by Sumanta Sen, Pasit Kongkunakornkul, Riddhima Talwani, Prinz Magtulis and Kripa Jayaram; Compiled by Dhara Ranasinghe; Editing by Tomasz Janowski and Christopher Cushing)

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Olympics-Decision on aluminium surfing judges’ tower by end November – Paris 2024

By Julien Pretot

PARIS (Reuters) – A decision on whether an aluminium tower for surfing judges will be built at next year’s Olympics in Teahupo’o in Tahiti will be made by the end of the month, Paris 2024 president Tony Estanguet said on Friday.

Residents say the planned tower would damage the coral reef.

The lagoon-side village has long hosted some of the biggest events on the professional World Surf League’s (WSL) championship tour using a modest wooden tower for judges on the reef that is dismantled after every event.

An online petition calling for the scrapping of plans for the 14-metre (45 foot) aluminium scaffolding and an 800m (half-mile) service channel through the reef had gathered almost 150,000 signatures by Wednesday.

“As for the judges’ tower, we reopened the issue a few weeks ago to see how we could improve it and respond to the concerns and expectations of the local population,” Estanguet told reporters, explaining that either the installation would be made or the wooden tower would be used if up to safety standards.

“Various options are currently being worked on by engineers, local authorities and the Polynesian government, which is responsible for building the tower.

“They are looking at different options for potentially reusing the foundations of the previous tower, which have not been compliant up to now for safety reasons.”

Estanguet said he would travel to Tahiti in the coming weeks.

“A decision is expected to be made by the end of November on which option will be chosen,” he said.

The Mata Ara Ia Teahupo’o collective, which launched the online petition, said they were only talking to local authorities after their arguments to Paris 2024 fell on deaf ears.

“We were invited twice to meetings where we were put in front of the Paris 2024 representative, and each time there was a dialogue of the deaf because everyone stuck to their guns,” the collective told Reuters in an email on Friday.

“Since then, we’ve only had discussions with the President of the country, Moetai Brotherson, and the High Commissioner of the Republic in French Polynesia, and these have been fairly calm and constructive.”

(Reporting by Julien Pretot; Editing by Ed Osmond)

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