GYEONGJU, South Korea/BEIJING — Chinese President Xi Jinping gifted South Korea’s President Lee Jae Myung a pair of Xiaomi smartphones and jokingly urged him to “check if there’s a backdoor,” during a state visit on Saturday that capped the Asia-Pacific Economic Cooperation (APEC) forum.

Mr. Lee hosted Mr. Xi at a state summit and dinner after the APEC leaders’ meeting in the South Korean city of Gyeongju, marking Mr. Xi’s first visit to the US ally in 11 years.

The choice of the gift —China-made Xiaomi devices brought to the home country of smartphone giant Samsung Electronics — underscored Mr. Xi’s technological ambitions, recently reinforced in China’s economic development plan for the next five years.

After Mr. Lee presented Mr. Xi with “the finest” wooden board for ancient strategy game Go, the pair walked over to the smartphones wrapped in black boxes and an official noted the displays on the devices were made in South Korea.

Mr. Lee lifted one of the boxes and looked at it. He then asked Mr. Xi: “How is the communication security?” Upon which Mr. Xi and other gathered officials erupted in laughter. Mr. Xi then pointed at the phones and responded: “You can check if there’s a backdoor.”

A backdoor risk refers to a hidden method of bypassing normal authentication or security controls.

Both leaders laughed, and Mr. Lee clapped his hands as they proceeded with the presentation of gifts, which also included a traditional Korean mother-of-pearl inlay lacquered tray.

Mr. Xi’s comment harkened back to concerns expressed by China over a US proposal for advanced chips sold abroad to be equipped with tracking and positioning functions that prompted US chipmaker Nvidia to say its chips had no “backdoors.”

China’s foreign ministry and Xiaomi did not immediately respond to Reuters’ requests for comment on the exchange. Mr. Lee’s office said it had no separate comment on Mr. Xi’s gifts.

At the summit, Mr. Lee sought Mr. Xi’s help in efforts to resume talks with nuclear-armed neighbor North Korea, while Mr. Xi told Mr. Lee he was willing to widen cooperation and jointly tackle the challenges they face.

In other recent off-the-cuff remarks by Mr. Xi, a hot mic caught the Chinese leader and Russian President Vladimir Putin discussing organ transplants and the possibility that humans could live to 150 years at a military parade in Beijing in September. — Reuters

A UKRAINIAN drone attack damaged and set ablaze a tanker and infrastructure at a major oil terminal in Russia’s key Black Sea port of Tuapse overnight, authorities in the southern region of Krasnodar said on Sunday.

The attack on the southern outlet for Russia’s crude and refined products came a day after traders told Reuters shipments from the seaport were set to rise in November, threatening knock-on effects for export flows.

“In the port of Tuapse, fragments of unmanned aerial vehicles (UAVs) fell on an oil tanker, damaging the deck superstructure,” the administration said on the Telegram messaging app.

“A fire broke out on the vessel. The crew were evacuated.”

The port is home to the Tuapse Black Sea oil terminal and a Rosneft-controlled oil refinery, which Ukraine has targeted with several drone strikes this year.

It was not immediately known if the terminal was operating after the attack, which the administration said damaged its buildings and other infrastructure.

Unofficial Russian and Ukrainian Telegram news channels posted images that appeared to show a terminal and a tanker ablaze at night, reporting several fires burning in the port’s vicinity. Reuters could not independently verify the reports.

The Russian Defense Ministry said on Sunday air defense units destroyed 32 Ukrainian drones over the Krasnodar region, among a total of 164 downed over Russian territory, the Crimean Peninsula and the Black and Azov seas.

The ministry reports only drones destroyed, not how many Ukraine launches.

There was no immediate comment from Ukraine about the attack.

Kyiv has stepped up its strikes on Russian refineries, depots and pipelines in recent months to strain fuel supplies, disrupt military logistics and raise wartime costs, a campaign it calls retaliation for Russian attacks on its power grid.

Falling drone debris also damaged an apartment building in the village of Sosnovyi, just outside Tuapse. No injuries were reported though the railway station in Tuapse suffered some minor damage, the regional administration said.

The overnight attack forced temporary closure of scores of Russian airports, chiefly in the country’s south and west, for safety reasons, Russia’s aviation watchdog Rossaviatsiya said on Telegram. — Reuters

Now that the United States no longer makes pennies, there is a scramble among gas stations, fast-food chains and big-box stores to adjust prices and round cash transactions, and it could potentially eat into their profits.

Pennies are drying up faster than retailers anticipated following President Donald Trump’s decision earlier this year to halt production of the one-cent coin. Retail groups recently told Reuters that they are frustrated by the lack of guidance from the Trump administration and lawmakers, forcing them to round down to avoid angering customers and violating laws in some states — potentially costing high-volume businesses significant money.

The National Retail Federation said the dearth of pennies has hit retailers in urban and rural areas, with no clear geographic pattern. Members of some state restaurant associations have voiced concerns about penny shortages.

“Any merchant that accepts cash is grappling with this,” said Dylan Jeon, senior director of government relations with the National Retail Federation, whose members include Walmart, Target, Macy’s, and Old Navy.

Some major convenience chains have already begun warning customers.

Sheetz, a family-owned convenience store, posted signs at one of its Pennsylvania stores that read: “The US Mint will no longer produce pennies, so we are short on change!” The signs encourage customers to use cashless payment options, round up purchases to support charity, or exchange $1 in spare pennies for a free self-serve drink.

Kwik Trip, the convenience store chain based in La Crosse, Wisconsin, announced that its 850 stores across the Midwest would round cash transactions down to the nearest nickel. At a Dallas location, a sign warns customers: “The US Treasury has stopped making pennies and we may experience shortages.”

KrogerUS, one of the largest US grocery chains, told Reuters it is still assessing the impact of the penny shortage. Many of its 2,700 locations have displayed signs asking customers for exact change.

Individual stores with other large chains have done the same, such as a CVS in Alexandria, Virginia, that posted a notice asking for exact change because of a “penny shortage.”

Treasury did not respond to multiple requests for comment.

Several countries, including Canada, Australia, Ireland and New Zealand, have phased out their lowest-value coins, rounding cash transactions up or down to the nearest five cents while keeping electronic payments exact. The moves cut minting costs and simplified cash handling for retailers.

In the US, phasing out pennies would require similar rounding practices at stores, adjustments to registers, and clear communication to consumers, but could deliver comparable savings and efficiency gains.

Several states, including California, New York and Illinois, however, have consumer protection laws that require retailers to provide exact change on cash transactions, creating legal uncertainty as pennies disappear from circulation. Retail groups say those rules make it difficult to adjust prices or round totals without risking fines or customer complaints.

LOOKING FOR CONSISTENT RULES
While Trump’s directive initiated the end to production, Congress retains authority over coinage, meaning legislation may still be required for a permanent discontinuation. The NRF has been lobbying the Trump administration and Congress to provide consistent guidance, particularly around rounding transactions.

“What’s most helpful in the near term is clarity on rounding practices — whether retailers can round up or down on transaction totals or change,” Jeon said.

A group of trade organizations that include gas stations, convenience stores, travel centers and grocery stores warned in a September 30 letter to congressional leaders that “if these remedies are not addressed in short order, it will be challenging to legally engage in cash transactions with customers in growing swaths of the country.”

Love’s Travel Stops, which operates more than 640 locations in 42 states, said the phaseout of penny production is affecting its retail operations.

“If one of our stores runs out of pennies, all change on cash transactions will be adjusted in the favor of the customer and Love’s will cover the difference,” a company spokesperson said. “This is a temporary measure while we work toward a long-term solution.”

Months after Trump ordered a halt to production of pennies, the Treasury Department in May placed its final order for blank penny planchets. Several Federal Reserve Bank sites, which distribute coins to banks and credit unions, have already stopped fulfilling orders for pennies.

Producing a penny currently costs more than its face value — about 3.69 cents per coin in recent years. The government now projects savings of roughly $56 million annually by ending penny minting.

There are about 114 billion pennies currently in circulation in the United States, but they are greatly underutilized, the Treasury says. The penny was one of the first coins made by the US Mint after its establishment in 1792.

Supporters of the penny argue it helps keep consumer prices down and is a source of income to charities. For its critics, the coin is a nuisance that ends up being discarded in drawers, ashtrays and piggy banks.

“I can’t even tell you the last time I carried pennies — even loose change — when I left the house,” said Pennsylvania resident Sandy Berger, 45. “I really don’t think people will care to see them gone.” — Reuters