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U.S. President Joe Biden and Chinese President Xi Jinping have agreed to resume high-level military communication, according to both countries.
U.S. Secretary of Defense Lloyd Austin will meet with his Chinese counterpart when that person is selected, a senior Biden administration official told reporters after the Biden-Xi summit.
China has yet to name a defense minister after dismissing Gen. Li Shangfu from the position without explanation in late October.

U.S. President Joe Biden and Chinese President Xi Jinping agreed to resume high-level military communication when they met in person Wednesday for the first time in a year in San Francisco on the sidelines of the Asia-Pacific Economic Cooperation conference.
Brendan Smialowski | Afp | Getty Images

BEIJING — U.S. President Joe Biden and Chinese President Xi Jinping have agreed to resume high-level military communication, according to both countries.
The two leaders met in person for the first time in a year Wednesday local time in San Francisco on the sidelines of the Asia-Pacific Economic Cooperation conference.

“We’re back to direct, open, clear communications,” Biden said at a press conference after the talks.
China has conducted military exercises around Taiwan, while its navy has been engaging in aggressive maneuvers in the South China Sea in a standoff with the Philippines as both countries stake their territorial claims.
The U.S. has wanted to revive the military communication, especially after some near-miss incidents where China’s ships almost collided with American forces.
“Vital miscalculations on either side can cause real trouble with a country like China or any other major country,” Biden said at the post-meeting press briefing.
China’s Defense Ministry declined a call with its U.S. counterpart in early February after the discovery of an alleged Chinese spy balloon over U.S. airspace. The balloon incident delayed U.S. Secretary of State Antony Blinken’s highly anticipated trip to China by more than four months.

In June, the defense chiefs from both countries attended an annual security summit in Singapore, but they did not have a formal meeting.

When Blinken finally visited China, he said he “repeatedly” raised the need for direct communication between the two countries’ militaries but failed to revive such talks.
China has yet to name a defense minister after dismissing Gen. Li Shangfu from the position without explanation in late October.
U.S. Secretary of Defense Lloyd Austin will meet with his Chinese counterpart when the Chinese defense chief is selected, a senior Biden administration official told reporters after the Biden-Xi summit.

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As part of the agreement, senior U.S. military commanders including that of Pacific forces in Hawaii will engage with their Chinese counterparts, the official said.
The two countries also plan to establish ways for ship drivers and others to discuss incidents and, potentially, best practices, the official said.
A readout published by Chinese state media added the resumption of such military talks was “on the basis of equality and respect,” according to a CNBC translation.

Taiwan

At the presser, Biden reiterated the U.S. position that Taiwan maintains its sovereignty, despite China’s claims to the contrary.
“We maintain the agreement that there is a One-China policy and I’m not going to change that, that’s not going to change. That’s about the extent to which we discussed,” he said.

According to Chinese state media, Xi pointed out during the bilateral meeting that Taiwan has always been the “most important and sensitive” issue in China’s relations with the U.S.. He said in the report that China “takes seriously” positive statements the U.S. made during his meeting with Biden last year in Indonesia.
“The U.S. should use concrete actions to reflect its stance of not supporting ‘Taiwan independence,’ stop arming Taiwan and support China’s peaceful reunification,” state media reported. “China will ultimately be reunified and will inevitably be reunified.”
Beijing considers Taiwan part of its territory, with no right to independently conduct diplomatic relations. The U.S. recognizes Beijing as the sole government of China but maintains unofficial relations with Taiwan, a democratically self-governed island.

AI, fentanyl and more

Chinese state media also said the two sides agreed to establish an intergovernmental dialogue on artificial intelligence, set up a working group on drug control, “significantly” increase flights between the two countries next year and expand exchanges in areas such as education, business and culture.
The U.S. senior administration official said the Chinese were already taking action on nearly 24 companies that make precursors for fentanyl — an addictive drug that’s led to overdoses and deaths in the U.S.
Biden said at the post-meeting presser that the two leaders agreed that fentanyl production needs to be “curbed substantially.”
On artificial intelligence, however, the official said it was too early for a joint declaration by the two leaders, and noted the need to prevent the incorrect use of AI in military or nuclear operations.

Trade and sanctions

The Biden administration has announced export controls and sanctions on Chinese companies in an effort to limit U.S. companies’ contribution to technology that supports China’s military.
Xi noted the export controls, investment reviews and sanctions in the meeting, and called for the U.S. to lift the sanctions and provide a non-discriminatory environment for Chinese companies, Chinese state media said.
Biden also brought up difficulties around travel harassment of Americans in China, and a business environment that wasn’t as welcoming as it was in the past, the U.S. senior administration official said.
But overall the official described the meeting as more personal than the last time the two leaders met.
In a post on X, formerly known as Twitter, Biden called his day of meetings with Xi “some of the most constructive and productive discussions we’ve had.”
“We built on groundwork laid over the past several months of diplomacy between our countries and made important progress.”
— CNBC’s Christina Wilkie and Clement Tan contributed to this report. More

President Joe Biden and President Xi Jinping of China met outside San Francisco at the Asia-Pacific Economic Cooperation event.
The meeting came amid efforts between the United States and China to increase high-level communication.
Biden and Xi were expected to discuss curbing fentanyl flows into the U.S., safe use of artificial intelligence, and American restrictions on Chinese access to high-end tech.

BEIJING — U.S. President Joe Biden and Chinese President Xi Jinping met Wednesday outside of San Francisco in their first face-to-face encounter in a year.
The summit, on the sidelines of the Asia-Pacific Economic Cooperation conference, followed efforts between the U.S. and China to increase high-level communication amid continued tensions.

“We have to ensure that competition does not veer into conflict,” Biden said at the start of the summit. “Critical global challenges we face, from climate change to counternarcotics to artificial intelligence, demand our joint efforts.”
Biden and Xi were widely expected to discuss issues such as curbing fentanyl flows into the U.S., safe use of artificial intelligence, and U.S. restrictions on Chinese access to high-end tech.
“For two large countries like China and the United States, turning their back on each other is not an option,” Xi said in his opening remarks. “Planet Earth is big enough for the two countries to succeed.”

U.S. President Joe Biden meets with Chinese President Xi Jinping at Filoli estate on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, in Woodside, California, U.S., November 15, 2023. 
Kevin Lamarque | Reuters

Signals of goodwill between the countries have picked up in recent days.
In the hours before the planned summit, the U.S. and China reaffirmed their commitment to cooperate on climate issues.

More direct flights between the U.S. and China are resuming from a low base.
Last month, Chinese commodity importers signed the first agreements since 2017 to buy U.S. agricultural products in bulk, according to a news release from the American embassy in Beijing.
China’s Ministry of Commerce last week announced it was gathering information in an effort to address unequal treatment of foreign businesses in China compared with treatment of domestic firms — which has been a longstanding business complaint.
The Chinese government may also use the summit as an opportunity to announce a commitment to resuming purchases of Boeing’s 737 Max aircraft, Bloomberg News reported, citing sources.
Boeing declined to comment.

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Xi arrived in the U.S. on Tuesday local time. It is his first trip to the United States since 2017, when he visited then-President Donald Trump at his Mar-a-Lago club in Florida.
The last time that Xi met Biden in person was in the Indonesian island resort of Bali in November 2022. That was Biden’s first meeting with the Chinese leader as American president.
Biden is running for reelection next year.
Xi cemented his power in March by formally gaining an unprecedented third term as president.
— CNBC’s Rebecca Picciotto contributed reporting More

At the annual Asia-Pacific Economic Co-operation summit in San Francisco, all eyes are on the meeting between Xi Jinping and Joe Biden. But when it comes to competition between the two great powers in Asia, the most consequential decisions will be made—or rather not be made—behind the scenes.Trade negotiators had hoped the summit would yield an announcement on the Indo-Pacific Economic Framework (ipef), America’s offering on trade to 13 regional economies, intended as its main weapon in the battle for economic influence in Asia. Instead, a decision by the Biden administration to halt discussions on digital trade has frozen an important part of an already limited agreement. There will be no announcement on the trade portion of ipef, one of the deal’s four pillars. With American elections now just a year away, further progress will be difficult.Digital trade is a large and growing category, covering online services, cross-border flows of data and e-commerce. In 2017, when Donald Trump withdrew from the Trans-Pacific Partnership (tpp)—a more comprehensive agreement than ipef—Asian countries had little hope of greater access to American markets. Support for opening up digital commerce was one of America’s last claims to international openness. Indeed, the usmca agreement with Canada and Mexico, signed by Mr Trump in 2018, prohibited both customs on digital products and data localisation (the practice of forcing companies to store data in the country where it is collected).But concerns about the sway of America’s tech giants have made Democrats, including Elizabeth Warren, a left-wing senator, sceptical about looser digital-trade rules. Those on both sides of the aisle want to ensure they are not restricted when regulating artificial intelligence (ai), says Sam Lowe of Flint Global, a consultancy. Mr Biden’s change of heart reflects these shifts.For liberal economies in the region, this is only the latest disappointment. In 2020 Chile, New Zealand and Singapore signed a pact covering issues from paperless trade certification to co-operation on future areas of interest, such as ai and fintech. Just as the tpp grew out of a deal between New Zealand and Singapore in 2000, participants hoped to tempt America into deeper agreements by getting the ball rolling themselves. That now looks unlikely.In the wake of America’s retreat, data localisation may follow. India and Indonesia recently passed privacy laws without strict localisation requirements. That was in no small part due to American advocacy, says Nigel Cory of the Information Technology and Innovation Foundation, a think-tank. Without such pressure, countries will be more likely to take a nationalistic path.American policy in Asia is now focused on limited bilateral deals that support Mr Biden’s industrial policy, which seeks to boost domestic manufacturing. The visit by Joko Widodo, Indonesia’s president, to Washington this week is an early step in negotiations over minerals for batteries (Indonesia accounts for almost half the nickel that was mined globally last year). And the government of the Philippines is pushing for a similar agreement.At the same time as America is withdrawing from multilateral deals, China is throwing its hat into the ring. The Asian superpower has little chance of joining the Comprehensive and Progressive Trans-Pacific Partnership, which succeeded the tpp. But the Regional Comprehensive Economic Partnership, a 14-member trade deal that came into effect last year, will bind Asian economies more tightly to it.In the contest between America and China for influence over Asian trade, only one side is making progress. Few Asian governments started out with high hopes for the ipef, which even its most ardent supporters conceded was no equivalent to the formal trade deals once pursued by American negotiators. Yet the agreement, whenever it comes, will now fall short of even that low bar. ■ More

Citigroup will soon begin layoffs in CEO Jane Fraser’s corporate overhaul, CNBC has learned.
Employees affected by the cuts will be informed starting Wednesday, with new dismissals announced daily through early next week, according to people with knowledge of the situation.

Jane Fraser, CEO of Citigroup Inc., during an interview for an episode of “The David Rubenstein Show: Peer-to-Peer Conversations” at the Economic Club of Washington in Washington, D.C., March 22, 2023.
Valerie Plesch | Bloomberg | Getty Images

Citigroup will soon begin layoffs in CEO Jane Fraser’s corporate overhaul, CNBC has learned.
Employees affected by the cuts will be informed starting Wednesday, with new dismissals announced daily through early next week, according to people with knowledge of the situation.

The move tracks with a timeline set by Fraser in a Sept. 13 memo. She announced five new divisions whose heads report directly to her, resulting in the departure of a handful of senior executives. The next phase of disruption will be “communicated and implemented by the end of November,” and “final changes” will be done by the end of March 2024, Fraser said at the time.
Fraser is under pressure to improve Citigroup, which has been mired in a stock slump as headcount and expenses have ballooned in recent years. The CEO, who took over in March 2021, is at a pivotal moment as she faces deep investor skepticism that the bank can hit performance targets she outlined last year.
Employees who have lost their roles may be able to apply for other positions, and Citigroup will offer severance pay where eligible, the bank’s human resources chief told workers last month.  
The full extent of job cuts are still being determined, but managers and consultants working on the project — known internally by its code name, “Project Bora Bora” — have discussed dismissals of at least 10% of workers in several businesses, CNBC reported last week.
Workers have flocked to internal chat platforms with questions about the impending cuts, according to the people, who declined to be identified speaking about personnel matters.

A Citigroup spokeswoman declined to comment Wednesday beyond the statement it offered to CNBC previously:
“We’ve acknowledged the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but they’re the right steps to align our structure to our strategy and deliver the plan we shared at our 2022 Investor Day.”
This story is developing. Please check back for updates. More

The Swiss lender last week began selling the bonds — which were at the heart of controversy during its emergency rescue of Credit Suisse earlier this year — for the first time since the takeover.
The wipeout of $17 billion of Credit Suisse AT1 bonds in March, as part of the rescue deal brokered by Swiss authorities, caused uproar among bondholders and continues to saddle the Swiss government and regulator with legal challenges.

Sergio Ermotti, CEO of UBS gestures during a panel discussion at the Swiss-American Chamber of Commerce in Zurich, Switzerland January 18, 2019.
Arnd WIegmann | Reuters

UBS Group CEO Sergio Ermotti says the “incredible” market demand for the bank’s recent issuance of AT1 (additional tier one) bonds is a “signal to the Swiss banking system.”
The Swiss lender last week began selling the bonds — which were at the heart of controversy during its emergency rescue of Credit Suisse earlier this year — for the first time since the takeover.

Ermotti told CNBC on Wednesday that he was “more than encouraged” by the massive oversubscription received for last week’s return to the market.
“The AT1 demand was incredible — $36 billion of demand for what happened to be $3.5 billion of placements — and in my point of view, it was probably the highlight in a sense of the confidence is restoring not only for UBS, I would say also it is a signal to the Swiss financial system,” Ermotti said.

The wipeout of $17 billion of Credit Suisse AT1 bonds in March, which was part of the rescue deal brokered by Swiss authorities, caused uproar among bondholders and continues to saddle the Swiss government and regulator with legal challenges. Some commentators suggested that it had undermined confidence in the traditionally stable and reliable Swiss banking system.
“The first reactions were based on emotions or people that were very loud because they had their own interest, but I think that, as time went by, people had enough chances to really look at the idiosyncratic situation, and also probably look more carefully into the prospectus of what is written,” Ermotti told CNBC’s Joumanna Bercetche on the sidelines of the UBS Conference in London.
“Those bonds were designed to be there for those kind of situations so I think that people over time, or the vast majority of the people, are coming down to a more balanced way of looking at matters,” he added. More

In the last few weeks, top policymakers have announced more support for the economy, primarily struggling local governments.
The International Monetary Fund last week cited Beijing’s policy announcements as a reason to raise its China growth forecast for the year to 5.4%. The IMF also raised its 2024 growth forecast to 4.6%.

BEIJING — China on Wednesday reported better-than-expected retail sales and industrial data for October, while the real estate drag worsened. 
Retail sales grew by 7.6% last month from a year ago, above the 7% growth forecast by a Reuters poll.

Industrial production rose by 4.6% year-on-year in October, faster than the 4.4% pace predicted by the Reuters poll.
Fixed asset investment for the first 10 months of the year grew by 2.9% from a year ago, missing expectations for a 3.1% increase.
Investment into real estate fell by 9.3% during that time, a steeper decline than the 9.1% drop reported for the first nine months of the year.

CHONGQING, CHINA – NOVEMBER 5, 2023 – High-rise buildings are seen in downtown Chongqing, China, November 5, 2023. (Photo by Costfoto/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images

“Clearly, the property sector remains a weak spot for the economy, which requires further support in the foreseeable future,” Hao Zhou, chief economist at Guotai Junan International, said in a note.
Funds raised by property developers fell at a steeper pace of 13.8% in October for the year so far, versus a 13.5% drop as of September.

National Bureau of Statistics spokesperson Liu Aihua said real estate remained in a “transition period of adjustment.” That’s according to a CNBC translation of her Mandarin-language remarks.
She claimed that in October, there was “marginal improvement” in real estate development and commercial housing sales.
Real estate and related sectors have accounted for about a quarter of China’s gross domestic product.
UBS analysts estimated that share has declined to about 22% this year. New home sales have dropped, while large property developers such as Country Garden have defaulted on their debt.

Unemployment at 5%

Liu declined to share a specific time for resuming the youth unemployment report.
For overall unemployment, she noted it was expected to remain stable, but said there were “structural contradictions” that would require more policy support.

Unpacking retail sales

Within retail sales, sports and other leisure entertainment products saw sales surge by 25.7% in October from a year ago, the data showed.
Catering, as well as alcohol and tobacco, saw sales surge by double digits. Auto-related sales rose by 11.4% from a year ago.
“Retail sales in October was particularly strong, beating even our above-consensus estimates,” Louise Loo, lead economist at Oxford Economics, said in a note Wednesday.
“At this juncture we are skeptical that the now-three consecutive months of strong retail sales data are pointing to a permanent upshift in consumers’ spending propensities,” Loo said.
“Year-to-date retail sales data showed low value discretionary items emerging as an outperforming segment, consistent with what we think is typical of weak economic recoveries (when the consumer’s willingness to spend rests on smaller-ticket items),” the Oxford Economics report said.
Online retail sales of physical goods grew by just 3.7% in October from a year ago, according to CNBC calculations of official data accessed through Wind Information.
However, online sales of non-physical goods surged by 40% year-on-year in October, the analysis showed.
The first week of October marked the final big public holiday for the year in China, known as Golden Week. Official data showed domestic tourism spending recovered to nearly 2019 levels, but that was partly due to more people staying within the country since overseas trips had yet to fully return to pre-pandemic levels.

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In the last few weeks, top policymakers have announced more support for the economy, primarily struggling local governments. Beijing has also taken steps to stabilize the massive real estate sector, which is expected to become a smaller part of the economy in the long term.
The International Monetary Fund last week cited Beijing’s policy announcements as a reason to raise its China growth forecast for the year to 5.4%. The IMF also raised its 2024 growth forecast to 4.6%.
When it comes to real estate, “the pressure remains,” the IMF’s First Deputy Managing Director, Gita Gopinath, told CNBC in an exclusive interview.

“There remains a lot of stress in the market. There remains weakness in the market,” she said. “This is not going to be over with quickly. It’s going to take some more time to transition back to a more sustainable size.”
In other signs of lackluster demand, China’s consumer price index fell by 0.2% in October. However, the so-called core CPI, that excludes food and energy prices, rose by 0.6% from a year ago.
China’s imports unexpectedly rose in October from a year ago in U.S. dollar terms, according to customs data released last week.
However, exports fell by a greater-than-expected 6.4% during that time, the data showed. More

The size of unfinished, pre-sold homes in China is about 20 times the size of developer Country Garden as of the end of 2022, Nomura analysts said.
“We estimate that there are around 20 million units of unconstructed and delayed pre-sold homes,” the analysts said.
Country Garden has been the largest non-state-owned developer in China by sales.

HANGZHOU, CHINA – NOVEMBER 15, 2023 – An aerial photo shows a new property under construction in Hangzhou City, Zhejiang Province, China, Nov 15, 2023. On the same day, data released by the National Bureau of Statistics showed that from January to October 2023, the national real estate development investment was 9,592.2 billion yuan, down 9.3% year on year; Of this total, the investment in residential housing was 7,279.9 billion yuan, down 8.8 percent. (Photo credit should read CFOTO/Future Publishing via Getty Images)
Future Publishing | Future Publishing | Getty Images

BEIJING — The size of unfinished, pre-sold homes in China is about 20 times the size of property developer Country Garden as of the end of 2022, according to a Nomura report on Wednesday.
Country Garden has been the largest non-state-owned developer in China by sales. It ran into financing troubles this year, and defaulted on a U.S. dollar bond last month, according to Bloomberg News.

“We estimate that there are around 20 million units of unconstructed and delayed pre-sold homes,” said Nomura’s Chief China Economist Ting Lu and a team.
About 3.2 trillion yuan ($440 billion) is needed to complete those remaining units, according to the analysts’ estimates.
Apartments in China are typically sold ahead of completion. Ensuring construction of the homes has been a government priority since delays make people less willing to buy new apartments.

At some point next year, the issue of home delivery could turn into a social issue and endanger social stability, and Beijing may eventually need to significantly ramp up policy support.

“In our view, amid the collapsing property sector and widespread credit fallout among property developers, home buyers might get increasingly impatient while waiting for the delivery of their purchased new homes,” the Nomura report said.
“At some point next year, the issue of home delivery could turn into a social issue and endanger social stability, and Beijing may eventually need to significantly ramp up policy support,” the analysts said. “We see this as the key to truly restoring the confidence in the property sector and economy.”

Last year, many homebuyers in China decided not to pay their mortgages on property purchases due to long delays in construction. Developers have faced a financing crunch since Beijing’s crackdown in 2020 on their high reliance on debt. Covid-19 restrictions last year also made construction difficult.
“Assuming 20% volume growth in new home completions for the current year, developers will only manage to deliver 48% of the homes pre-sold between 2015 and 2020, leaving 52% still subject to delays,” the Nomura analysts said. More

The PGA Tour said it will begin to offer professional players direct equity ownership in the new company that will be formed after it reaches a deal with investors.
Talks with the Saudi Public Investment Fund are the tour’s “top priority,” Commissioner Jay Monahan wrote in a memo.

Tiger Woods of the United States and Rory McIlroy of Northern Ireland walk to the 11th fairway during a practice round prior to the 2023 Masters Tournament at Augusta National Golf Club on April 03, 2023 in Augusta, Georgia. 
Ross Kinnaird | Getty Images Sport | Getty Images

The PGA Tour said Tuesday it will begin to offer professional players direct equity ownership in the new company that will be formed after it reaches a deal with investors, according to an internal memo obtained by CNBC.
The tour is currently in negotiations working toward an investment agreement with Saudi Arabia’s Public Investment Fund, which owns LIV Golf, and the DP World Tour. The talks with PIF and the DP World Tour remain the tour’s “top priority,” PGA Tour Commissioner Jay Monahan said in Tuesday’s memo.

The sides reached a framework agreement earlier this year to combine the business interests of the golf leagues. The development triggered anger and criticism, including from players such as Rory McIlroy. The Senate held hearings to investigate claims that the deal was meant to increase Saudi Arabia’s influence in the U.S. through sports investments.
The new program outlined in Tuesday’s memo is the latest move to align the interests of PGA Tour players with the business itself.
“At the point we secure outside investment, this would be a unique offering in professional sports, as no other league grants its players/members direct equity ownership in the league’s business,” wrote. “We recognize – as do all of the prospective minority investors who are in dialogue with us – that the PGA TOUR will be stronger with our players more closely aligned with the commercial success of the business.”
Monahan also wrote that the Tour’s agreement with PIF and DP World Tour has generated interest from other investors. The board is currently reviewing private investors’ bids and will keep negotiating to select finalists, he added.
Last week, Fenway Sports Group Chairman Tom Werner acknowledged that the company has held talks with the PGA Tour, but declined to comment with any further details. There’s been speculation that Fenway could come up with an offer that tops the Saudis’ bid. More