Exclusive: Sudan needs up to $5 billion in budget support to prevent collapse

© Reuters. Sudan's Finance Minister Ibrahim Elbadawi speaks during an interview with Reuters in Khartoum © Reuters. Sudan’s Finance Minister Ibrahim Elbadawi speaks during an interview with Reuters in Khartoum

By Khaled Abdelaziz, Ulf Laessing and Michael Georgy

KHARTOUM (Reuters) – Sudan needs up to $ 5 billion in budget support to avert economic collapse and launch reforms after the ouster of veteran ruler Omar al-Bashir, its finance minister told Reuters.

The country, in crisis since losing most of its oil wealth with South Sudan’s secession in 2011, has only enough foreign currency reserves to fund imports for a few weeks, said Ibrahim Elbadawi, part of a transitional government formed in August.

Sudan has had some support for fuel and wheat imports but about 65 percent of its 44 million people live in poverty and it needs up to $ 2 billion in development funding along with a hoped-for $ 2 billion from Arab development funds, he said.

Outlining reform plans in detail for the first time, Elbadawi said public salaries would need to be increased and a social support network established to prepare for the painful removal of fuel and food subsidies.

Months of demonstrations over price hikes for fuel and bread and cash shortages triggered the uprising against Bashir, who was toppled in April by the military. Protests have continued since, with people killed in clashes with security forces.

“We have started the process (of reforms),” Elbadawi said in an interview on Thursday. “The people of Sudan deserve to be seen in a radically different prism than the international community used to see Sudan, as a country ruled by a pariah state.”

“Now we have a revolution,” he said. Asked how much budget support was needed for 2020 he said: “Some estimates say between three to four billion (US dollars), maybe even five billion.”

The civilian government Elbadawi is part of has taken over for three years under a power-sharing deal with the military. It has drawn slightly more than half of $ 3 billion in support for imports of wheat and fuel offered by Saudi Arabia and United Arab Emirates in April, he said.

A “friends of Sudan” donor meeting is planned for December and the government had agreed with the United States it could start engaging with international institutions while still on a list of countries deemed sponsors of terrorism, Elbadawi said.

The designation, which dates from allegations in 1993 that Bashir’s Islamist government supported terrorism, makes it technically ineligible for debt relief and financing from the IMF and World Bank. Congress needs to approve a removal.

CURRENCY

The first experts from international institutions had arrived in Khartoum to help with reforms and a delegation of the International Monetary Fund (IMF) would come this month for Chapter IV discussions, Elbadawi said. There was no immediate comment from the IMF, World Bank or U.S. State Department.

Part of a roadmap agreed with the IMF and World Bank was that Sudan did not have to pay back $ 3 billion in arrears from international institutions.

“We don’t need to pay anything. What we need to … deliver really is policy,” he said. Sudan is one of the most indebted countries, owing $ 60 billion, which needs to be settled separately.

Sudan would start to increase its tax base and overhaul the civil sector, Elbadawi said. Salaries — eroded by double digit inflation rates — could be raised as much as 100 percent by April.

In the second half of next year a social support network would be set up to allow the lifting of subsidies by June or later. Some donor funding would be used to collect data to allow cash transfers for the needy.

Sudan also wanted to produce bread based on sorghum, a local cereal, to import less wheat. He said he hoped a spread between official and black market would be ended by June. But this week the local pound dropped to 80 for a dollar on the black market versus the official rate at 45.

He said the 2020 budget would have sustainable development targets for education, health care and social spending, suggesting Sudan might move away from the dominant military spending choking development.

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Exclusive: Third Point builds stake in Ray-Ban maker EssilorLuxottica – sources

By Svea Herbst-Bayliss and Claudia Cristoferi

(Reuters) – Third Point LLC, the U.S. hedge fund that has pushed for changes at companies ranging from Nestle SA (S:) to Campbell Soup Co (N:), has amassed a stake in Ray-Ban maker EssilorLuxottica SA (PA:), people familiar with the matter said on Sunday.

Third Point, run by billionaire investor Daniel Loeb, is targeting EssilorLuxottica amid a power struggle inside the world’s largest lenses and glasses manufacturer, following its formation last year through a 48 billion euro ($ 53 billion) merger of France’s Essilor and Italy’s Luxottica.

Billed as a merger of equals, it degenerated into a battle over control between Luxottica’s founder Leonardo Del Vecchio and Essilor’s chief Hubert Sagnieres. The two sides announced a truce in May, but the company still faces uncertainty as it searches for a CEO that can deliver on the merger’s promised annual savings of 600 million euros.

Third Point has met with Del Vecchio, who is now EssilorLuxottica’s executive chairman and owns about a third of the company, according to two of the sources. Details of the meeting and on Third Point’s exact stake could not be learned.

Third Point has a track record of calling on operational improvements at companies where their stock could be buoyed by a different strategy, although is not clear what stance the New York-based hedge fund will adopt on how EssilorLuxottica should be run. Third Point is still in the process of buying EssilorLuxottica shares, one of the sources said.

The sources requested anonymity because Third Point’s investment in EssilorLuxottica is confidential. EssilorLuxottica, which has a market capitalization of 57 billion euros, and Third Point declined to comment.

A representative for Delfin, Del Vecchio’s holding company, also declined to comment.

The Essilor and Luxottica camps were supposed to have equal weighting in the combined company’s leadership under an agreement which expires in 2021.

Tensions surfaced last November, when Del Vecchio appeared to tap his right-hand man and Luxottica Chief Executive Francesco Milleri as the next CEO.

The dispute came to a head in March, when Del Vecchio’s Delfin said it would seek arbitration in the International Chamber of Commerce, prompting Essilor to ask a Paris court to nominate an outside mediator.

Investors, including Baillie Gifford, Comgest, Edmond de Rothschild Asset Management, Fidelity International, Guardcap, and Phitrust et Sycomore Asset Management, argued that the corporate integration was being undermined by a “major crisis of governance.” Their effort to install independent directors on EssilorLuxottica’s board failed in a shareholder vote.

In May, the two sides agreed to end their legal feud. Del Vecchio and Sagnieres made Milleri and Laurent Vacherot, EssilorLuxottica’s current CEO, jointly responsible for overseeing the integration process and define strategy.

They set a deadline of finding a new CEO by the end of 2020. Milleri and Vacherot agreed not to put forward themselves for the job.

In a sign that the two camps have put some of their differences aside, EssilorLuxottica said last month it would acquire Dutch opticians group GrandVision NV (AS:) for up to 7.2 billion euros in cash.

GrandVision, whose chains include Vision Express in Britain and For Eyes in the United States, would give EssilorLuxottica control of more than 7,000 outlets across the world where it already sells brands including Varilux lenses and Ray-Ban sunglasses. Other EssilorLuxottica brands include Oakley, Persol and Oliver Peoples.

The deal is likely to face intense scrutiny by competition regulators. The European Union only approved the merger of Essilor and Luxottica after a long study.

CHALLENGING CONGLOMERATES

Third Point, which has $ 15 billion in assets under management, has spent this year taking on some of the world’s largest conglomerates, and has told investors that it plans to make more activist investments where it feels it has an edge.

In June, it called on Sony Corp (T:) to spin off its semiconductor business and sell off stakes in Sony Financial and other units, in order to position itself as a leading global entertainment company.

It also urged United Technologies Corp (N:) to cancel its aerospace merger with U.S. defense contractor Raytheon Co (N:), calling the deal “ill conceived.” Earlier this month, the fund disclosed it trimmed its stake in United Technologies.

In the first half of 2019, Third Point’s flagship fund earned a 13.1% return, fueled by gains at many of its activist positions ranging from Nestle to Sony.

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Exclusive: China curbs gold imports as trade war heats up

© Reuters. FILE PHOTO: A sales assistant places gold ornaments at Caibai Jewelry store in Beijing © Reuters. FILE PHOTO: A sales assistant places gold ornaments at Caibai Jewelry store in Beijing

By Peter Hobson and Yawen Chen

LONDON/BEIJING (Reuters) – China has severely restricted imports of gold since May, bullion industry sources with direct knowledge of the matter told Reuters, in a move that could be aimed at curbing outflows of dollars and bolstering its yuan currency as economic growth slows.

The world’s second largest economy has cut shipments by some 300-500 tonnes compared with last year – worth $ 15-25 billion at current prices, the sources said, speaking on condition of anonymity because they are not authorized to speak to the media.

The restrictions come as an escalating trade confrontation with the United States has dragged China’s pace of growth to the slowest in nearly three decades and pressured the yuan to its lowest since 2008.

China is the world’s biggest importer of gold, sucking in around 1,500 tonnes of metal worth some $ 60 billion last year, according to its customs data – equivalent to one-third of the world’s total supply.

Chinese demand for gold jewelry, investment bars and coins has trebled in the last two decades as the country has rapidly become wealthier. China’s official gold reserves meanwhile rose fivefold to nearly 2,000 tonnes, according to official data.

Chinese customs figures show it imported 575 tonnes of gold in the first half of the year, down from 883 tonnes in the same period of 2018.

In May, China imported 71 tonnes, down from 157 tonnes in May 2018. In June, the last month for which data is available, the decline was even sharper, with 57 tonnes shipped compared with 199 tonnes in June last year.

The bulk of China’s imports – from places such as Switzerland, Australia and South Africa and usually paid for in dollars – are conducted by a group of local and international banks given monthly import quotas by the Chinese central bank.

But quotas have been curtailed or not granted at all for several months, seven sources in the bullion industry in London, Hong Kong, Singapore and China said.

“There are virtually no import quotas now issued in China,” one source said. In June and July “next to nothing” was imported by banks, they said.

The Chinese central bank did not respond to a written request for comment.

Imports have not fallen to zero because some banks may still be receiving some quotas and other import channels, such as refineries receiving semi-pure mined gold, remain open, four of the sources said.

GRAPHIC: Chinese gold imports – https://tmsnrt.rs/2YEVuhE

They said China’s likely motive for restricting gold shipments was to help limit the amount of money leaving the country amid a plunge in the value of the yuan.

Beijing has previously taken steps to curb capital outflows when its currency weakened, such as squeezing the supply of , clamping down on import invoicing and encouraging banks to send home dollars held overseas.

It has also restricted gold import quotas before – most recently in 2016 after the yuan weakened sharply, bullion bankers said.

But not to this degree. It’s “unprecedented,” said an industry source in Asia.

“Gold going in is money going out,” said one of the people, adding that Chinese buyers tend buy dollars to pay for metal. “It’s all linked to what’s going on in terms of how the central bank is handling the currency,” the person said.

The yuan has sunk more than 10% against the dollar since early last year and the central bank this month allowed it to slide below the key threshold of 7-per-dollar for the first time in more than a decade.

While there is no clear official data to gauge capital outflows from China, a popular measure is a component in its balance of payments called errors and omissions, which point to outflows of $ 88 billion in the first three months of this year, the most on record.

GRAPHIC: Chinese capital outflows – https://tmsnrt.rs/2YL19Tn

With foreign exchange reserves at $ 3.1 trillion – the world’s largest – China has the capacity to defend its currency.

But restricting gold imports is an easy way to curtail outflows without affecting people’s lives, bullion bankers said.

So far the effect on the wider gold market has been muted.

A sharp rise in prices has prompted many in China to cash in their gold for profit, boosting local supply, while resurgent demand elsewhere in the world has been strong enough to soak up extra metal.

Slowing global economic growth is pushing more institutional investors, particularly in Europe and North America, toward gold, traditionally seen as a safe place to invest, while central banks are buying at the fastest pace in half a century.

However, the cost of gold in China could rise if the surge in recycled supply fades before import restrictions are lifted, and supply could rapidly exceed demand outside China if institutional investors slow their purchases.

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Exclusive: China central bank official says yuan at right level, disorderly capital flows unlikely

© Reuters. FILE PHOTO: Man sits in front of the headquarters of the People's Bank of China, the central bank, in Beijing © Reuters. FILE PHOTO: Man sits in front of the headquarters of the People’s Bank of China, the central bank, in Beijing

By Kevin Yao and Ryan Woo

BEIJING (Reuters) – China’s yuan is at an appropriate level currently and two-way fluctuations in the currency will not necessarily cause disorderly capital flows, a senior official at the People’s Bank of China told Reuters on Tuesday.

The yuan has weakened nearly 2.4% since U.S. President Donald Trump threatened early this month to impose more tariffs on Chinese goods from Sept. 1, though there are signs China is trying to stem the declines.

“The current level of exchange rate is appropriately aligned with fundamentals of China’s economy and market supply and demand,” Zhu Jun, head of the central bank’s international department, said in an interview with Reuters.

Zhu said China was “shocked” by the U.S. Treasury Department’s move last week to label China a currency manipulator, hours after Beijing let the yuan slide past the key 7-per dollar level to its lowest level since the global crisis.

But Zhu asserted that China will be able to “navigate all scenarios” arising from the Trump administration’s decision to label it a currency manipulator for the first time since 1994, which rattled global markets.

China is unlikely to face serious consequences from getting that label given the apparent lack of Group of Seven and International Monetary Fund support for Washington’s move, former and current U.S. and G7 officials said.

But some Chinese advisers and former officials have sounded alarm bells over a possible wider conflict between China and the United States. The year-long trade war between the world’s two largest economies has already spread beyond tit-for-tat tariffs on goods to other areas such as technology and currency.

UPGRADING THE TRADE WAR?

The real aim of the U.S. currency manipulator label is to disrupt China’s financial markets and its economy, said Chen , former chairman of the China Development Bank – the country’s biggest policy bank.

“The U.S. step to list China as a currency manipulating country is an important action to upgrade the trade war into a financial war,” Chen, who remains an influential figure on economic issues, told a forum over the weekend.

Zhu of the central bank told Reuters that in the short run, external shocks will play a role by influencing the yuan’s movements.

“That said, as long as RMB moves in an orderly manner based on market supply and demand, such movements in either direction do not necessarily mean disorderly movement of capital flow,” she said. The yuan is also known as renminbi, or RMB.

Zhu reiterated that recent yuan volatility was a normal market reaction to escalating trade tensions, adding “If it’s preventing such responses that would constitute real manipulation.”

Analysts say a weaker yuan could help China’s ailing exporters to cope with higher U.S. tariffs amid an escalating trade war, but any sharp yuan drops could fuel capital outflows as the world’s second-largest economy faces increased headwinds.

REPEATED PLEDGES

Chinese leaders have repeatedly pledged that they would not resort to competitive currency devaluation to support exports, or use the currency as a tool to cope with trade disputes.

Zhu said the yuan will be supported by China’s solid economic fundamentals, a stable debt ratio, contained financial risks, adequate foreign exchange reserves, and favorable interest rate spreads between China and major advanced economies.

“Over the medium and long term, we have full confidence in RMB as a strong currency,” she said.

In the second quarter, China’s annual economic growth pace slowed to a near 30-year low of 6.2%. Many analysts had expected a steadying in the second half as earlier stimulus measures started to kick in, but Trump’s latest tariff threat is likely to further pressure exporters and their domestic supply chains.

China’s foreign exchange reserves – the world’s largest – fall by $ 15.54 billion in July to $ 3.104 trillion, central bank data showed, amid rising trade tensions.

China burned through $ 1 trillion of reserves supporting the yuan in the last economic downturn in 2015, during which it devalued the currency in a surprise move. Since then, Beijing has shored up restrictions on capital outflows.

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Exclusive: Behind Grindr’s doomed hookup in China, a data misstep and scramble to make up

© Reuters. The Grindr logo is reflected on © Reuters. The Grindr logo is reflected on “HIV Data” text in this picture illustration

By Echo Wang and Carl O’Donnell

(Reuters) – Early last year, Grindr LLC’s Chinese owner gave some Beijing-based engineers access to personal information of millions of Americans such as private messages and HIV status, according to eight former employees, prompting U.S. officials to ask it to sell the dating app for the gay community.

After taking full control of Grindr in January 2018, Beijing Kunlun Tech Co Ltd stepped up management changes and consolidated operations to cut costs and expand operations in Asia, one former employee familiar with the decision said.

In the process, some of the company’s engineers in Beijing got access to the Grindr database for several months, eight former employees said.

While it is known that data privacy concerns prompted the crackdown on Kunlun, interviews with over a dozen sources with knowledge of Grindr’s operations, including the former employees, for the first time shed light on what the company actually did to draw U.S. ire and how it then tried to save its deal.

Reuters found no evidence that the app’s database was misused. Nevertheless, the decision to give its engineers in Beijing access to Grindr’s database proved to be a misstep for Kunlun, one of the largest Chinese mobile gaming companies.

In early 2018, the Committee on Foreign Investment in the United States (CFIUS), a government panel that scrutinizes foreign acquisitions of U.S. companies, started looking into the Grindr deal to see whether it raised any national security risks, one source close to the company said.

Last September, it ordered Kunlun to restrict access of its Beijing-based engineers to Grindr’s database, the source said.

Kunlun did not respond to requests for comment. A Treasury spokesman declined to comment on behalf of CFIUS.

A Grindr spokeswoman said “the privacy and security of our users’ personal data is and always will be a top priority.”

DATA PRIVACY FOCUS

Two former national security officials said the acquisition heightened U.S. fears about the potential of data misuse at a time of tense China-U.S. relations. CFIUS has increased its focus on safety of personal data. In the last two years, it blocked Chinese companies from buying money transfer company MoneyGram International Inc and mobile marketing firm AppLovin.

Based in West Hollywood, California, Grindr is especially popular among gay men and has about 4.5 million daily active users. CFIUS likely worried that Grindr’s database may include compromising information about personnel who work in areas such as military or intelligence and that it could end up in the hands of the Chinese government, the former officials said.

“CFIUS operates under the assumption that, whether through legal or political means, Chinese intelligence agencies could readily access information held by private Chinese companies if they wanted to,” said Rod Hunter, an attorney at Baker & McKenzie LLP who managed CFIUS reviews during President George W. Bush’s administration.

In a faxed statement to Reuters, China’s foreign ministry said it was aware of the situation with Grindr and urged the United States to allow fair competition and not politicize economic issues.

“The Chinese government always encourages Chinese companies to conduct economic and trade cooperation overseas in accordance with international rules and local laws,” it said.

GRINDR’S TAKEOVER

Kunlun first acquired 60% of Grindr in 2016 for $ 93 million, amid a wave of acquisitions of U.S. technology companies by Chinese firms. At the time CFIUS focused on traditional national security concerns, such as the use of technology for potential military applications, the former U.S. security officials said.

Submissions of deals to CFIUS for review were entirely voluntary then, and Kunlun did not think it needed to submit its purchase of Grindr because it was convinced the deal posed no national security risk, two sources close to the company said.

After that deal was completed Kunlun tasked engineers in Beijing to improve the app, former employees said. The team worked out of the second floor of Ming Yang International Center, Kunlun’s 11-story headquarters east of the Palace Museum in Beijing, one former employee said.

At first, they did not have access to Grindr’s database, six former employees said. But that changed when Kunlun bought out the remainder of Grindr for $ 152 million, and the dating app’s founder and CEO, Joel Simkhai, left.

Kunlun shifted a significant portion of Grindr’s operations to Beijing, seven former employees said. Some outside contractors ended their work, and most of Grindr’s U.S. engineers were subsequently let go or resigned, they said.

Some U.S. employees who learned that the database access had been given to colleagues in China raised concerns about privacy with management, but they were told that they should not worry, two former employees said.

CFIUS ORDER

About a month after CFIUS’ September order, Kunlun told the panel the Beijing team’s access to Grindr’s database had been restricted, the source close to the company said.

Grindr also hired a cyber forensic firm and a third-party auditor at CFIUS’s behest to report on its compliance and to make sure the data was secure, the source said.

Kunlun started to operationally separate Grindr as well, making Grindr Beijing a different legal entity, transferring some Chinese employees from Kunlun to Grindr, and finding separate office space for Grindr in Beijing, former employees said.

Reuters could not determine what triggered CFIUS’ initial concerns about the Grindr deal, or whether Kunlun’s steps were directly aimed at allaying the panel’s fears.

By February, Kunlun had decided to shut down Grindr’s Beijing office, parting ways with some of the roughly two dozen employees there, two former employees said.

It told them the decision was taken because of policy reasons and concerns about data privacy, they said.

In March, Reuters first reported that CFIUS had asked Kunlun to divest Grindr.

Behind the scenes, the source close to the company said, Kunlun kept trying to salvage the Grindr deal until as recently as last week, when it said it would sell it by June next year.

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Exclusive: Sanofi says working at hiring a new CEO

© Reuters. The logo of Sanofi is pictured during the Viva Tech start-up and technology summit in Paris © Reuters. The logo of Sanofi is pictured during the Viva Tech start-up and technology summit in Paris

PARIS (Reuters) – Sanofi (PA:) is working on a succession plan to find a new CEO in agreement and consultation with current Chief Executive Olivier Brandicourt, a spokesman with the French drugmaker told Reuters on Monday.

Sanofi has set an age limit for its CEO job at 65. Brandicourt will be 65 in February 2021.

"It is the responsibility of any company’s board of directors to consider and plan for the succession of its CEO and executive committee members by identifying the next set of future leaders," a spokesman told Reuters.

"With this perspective, the board has been considering this succession plan for some time now, in agreement and consultation with our CEO," he added.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Exclusive: U.S., China sketch outlines of deal to end trade war – sources

© Reuters. U.S and China trade talks in Beijing © Reuters. U.S and China trade talks in Beijing

By Jeff Mason

WASHINGTON (Reuters) – The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, according to sources familiar with the negotiations.

The world’s two largest economies have slapped tit-for-tat tariffs on hundreds of billions of dollars of goods, slowing global economic growth, skewing supply chains and disrupting manufacturing.

As officials hold high level talks on Thursday and Friday in Washington, they remain far apart on demands made by U.S. President Donald Trump’s administration for structural changes to China’s economy.

But the broad outline of what could make up a deal is beginning to emerge from the talks, the sources said, as the two sides push for an agreement by March 1. That marks the end of a 90-day truce that Trump and Chinese President Xi Jinping agreed to when they met in Argentina late last year.

Negotiators are drawing up six memorandums of understanding on structural issues: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, according to two sources familiar with the progress of the talks.

At meetings between U.S. and Chinese officials last week in Beijing the two sides traded texts and worked on outlining obligations on paper, according to one of the sources.

The process has become a real trade negotiation, the source said, so much so that at the end of the week the participants considered staying in Beijing to keep working. Instead they agreed to take a few days off and reconvene in Washington.

The sources requested anonymity to speak candidly about the talks.

GETTING COMMITMENTS IN WRITING

The MOUs cover the most complex issues affecting the trading relationship between the two countries and are meant, from the U.S. perspective, to end the practices that led Trump to start levying duties on Chinese imports in the first place.

One source cautioned that the talks could still end in failure. But the work on the MOUs was a significant step in getting China to sign up both to broad principles and to specific commitments on key issues, he said.

The United States has accused Beijing of forcing U.S. companies doing business in China to share their technology with local partners and hand over intellectual property secrets. China denies it engages in such practices.

Trump administration officials also object to non-tariff barriers in China, including industrial subsidies, regulations, business licensing procedures, product standards reviews and other practices that they say keep U.S. goods out of China or give an unfair advantage to domestic firms.

U.S. Treasury Secretary Steven Mnuchin has pushed for China to open its financial services markets to more foreign firms, including credit card giants Visa (NYSE:) and MasterCard, which have waited years for China to make good on promises to allow them to operate there.

On currency, U.S. officials including Mnuchin have warned China against devaluing its yuan to gain a competitive advantage after the Chinese currency weakened significantly against the dollar last year, partly counteracting Trump’s tariffs.

The two sides were discussing an enforcement mechanism for the deal, the source said. Reuters reported last month that the United States was pushing for regular reviews of China’s progress on pledged trade reforms and could reinstate tariffs if it deems Beijing has violated the agreement.

The parties also were looking at a 10-item list of ways that China could reduce its trade surplus with the United States, including by buying agricultural produce, energy and goods such as semiconductors, according to two other sources familiar with the talks.

CLOCK IS TICKING

Time is running short ahead of the March 1 deadline to resolve the dispute or see U.S. tariffs on $ 200 billion worth of Chinese goods rise from 10 percent to 25 percent. Trump said on Tuesday he thought China had an incentive to move swiftly.

"I think they’re trying to move fast so that doesn’t happen," he told reporters in the Oval Office, while not ruling out the possibility of extending the deadline.

Lower-level officials held a round of talks in Washington on Tuesday and Wednesday. They will be joined on Thursday by the top level negotiators, led by U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.

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Exclusive: Libya government, central bank fail to agree 2019 budget – sources

© Reuters. FILE PHOTO: Cars are parked outside the Central Bank of Libya in Tripoli © Reuters. FILE PHOTO: Cars are parked outside the Central Bank of Libya in Tripoli

By Ulf Laessing

TUNIS (Reuters) – Libya’s internationally recognized government and the central bank have failed to agree a national budget for 2019 due to a row over spending priorities, and the wrangling could go on until March, three sources familiar with the talks said.

The conflict is a setback for Western powers and the United Nations, which have been pressing for reforms to tackle a war economy that has enriched armed groups in a conflict stemming from the overthrow of Muammar Gaddafi in 2011.

The World Bank, U.N. and Western powers hosted a meeting in Tunis with Libyan officials last week to prod them to finalize a budget which should have been approved in December.

But no deal was reached, as the Tripoli administration and the central bank could not agree how to use revenues from a new fee on hard currency transactions, among other issues, diplomats as well as the sources familiar with the talks said.

Agreeing on a budget could take as long as to March when the next meeting is planned, they and diplomats briefed on the talks said.

Officials at the Tripoli-based government including the finance ministry as well as the central bank did not respond to phone calls seeking comment.

With no budget, the government can only pay for public salaries and fuel subsidies but not for badly-needed investments to overhaul dilapidated schools, roads and hospitals.

Libya has had no proper budget since 2016 because its internationally recognized parliament is based in the east and supports a parallel administration there. Tripoli is home to the U.N.-backed government but has little power.

Since then Western countries and international institutions have been brokering meetings between Tripoli officials, the central bank and a senior lawmaker from parliament.

These efforts also include a tactical agreement with the eastern government whose salaries are paid by the central bank — the United Nations wants to keep an uneasy balance between west and east while trying to prepare Libya for elections to unify the institutions.

FEE

The budget row arises from a conflict about how to spend a new 183 percent fee imposed on private currency transactions in October, the sources said.

The Tripoli government and central bank had imposed the fee under Western pressure, amounting to a de-facto devaluation to lower the spread between official and black market dollar rates.

Armed groups have benefited from the spread as they, thanks to their power, get cheap central bank dollars and sell them on the black market.

The Tripoli government wants to use the fee for development but the central wants to pay back debt, sources said.

There would more room to spend this year because oil revenues rose by 78 percent to 24.5 billion dollars in 2018 as wave of blockage of oilfields ebbed, halving the deficit to 4.6 billion dinars ($ 3.32 billion).

The row has been complicated by a power play inside the Presidential Council running the Tripoli administration.

Three council members accused Prime Minister Fayez al-Serraj of seeking to "control power and decisions, (pursue) unstudied policies and irresponsible behaviors," a statement said. It warned of state collapse.

Diplomats said that row made it more difficult for officials to agree on the next reforms such as reducing fuel subsidies which also benefit armed groups who smuggle cheap fuel abroad.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Exclusive: Logitech in talks to acquire headphone maker Plantronics – sources

© Reuters. Chief Executive Darrell of the computer peripherals maker Logitech addresses news conference in Zurich © Reuters. Chief Executive Darrell of the computer peripherals maker Logitech addresses news conference in Zurich

By Liana B. Baker and Carl O’Donnell

(Reuters) – Logitech International SA, a Swiss manufacturer of keyboards and webcams, is in discussions to acquire Plantronics Inc, a U.S. maker of Bluetooth earpieces and gaming headsets, people familiar with the matter said on Friday.

The deal would be by far Logitech’s largest acquisition and would illustrate the company’s push to diversify its business. It would come as Logitech and Plantronics seek to keep down manufacturing costs following the introduction of tariffs on imports from China into the United States.

Logitech has offered more than $ 2.2 billion to acquire Plantronics, one of the sources said. As of the end of trading on Friday, Plantronics had a market capitalization of about $ 2 billion.

If the negotiations prove successful, a deal between Logitech and Plantronics could come as early as next week, the sources said, cautioning that it was also possible that no agreement would be reached.

The sources asked not to be identified because the negotiations are confidential. Plantronics declined to comment, while Logitech did not respond to a request for comment.

Plantronics shares jumped 5.6 percent to $ 56.50 on the news in after hours trading in New York on Friday.

Logitech’s and Plantonics’ businesses have been under pressure as a result of new offerings being developed, not just from network gear makers such as Cisco Systems Inc (NASDAQ:), but also from major technology companies such as Microsoft (NASDAQ:) Inc and Google owner Alphabet (NASDAQ:) Inc.

Founded in 1981, Logitech has been countering declining sales of personal computers by focusing on consumer accessories that are benefiting from the growth of cloud computing, such as gaming, music, smart home connectivity and video conferencing. The Lausanne-based company has a market capitalization of $ 5.6 billion.

Last year, Logitech acquired ASTRO Gaming for $ 85 million in cash to expand in the video game sector.

Santa Cruz, California-based Plantronics makes unified communications systems, wireless headsets, conferencing systems, and some software, which it sells to businesses and consumers.

Founded in 1961, Plantronics’ first products were lightweight headsets for airline pilots. It later became known for selling headsets to the National Aeronautics and Space Administration (NASA), including the ones worn by Neil Armstrong during his first moonwalk in 1969.

A sale of Plantronics would come on the heels of the company’s $ 2 billion acquisition in July of U.S. video-conferencing equipment maker Polycom Inc.

Private equity firm Siris Capital Group LLC owns 16 percent of Plantronics, making it its largest shareholder. Reuters had reported earlier this month that Plantronics was exploring a sale.

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