Every Wednesday, the Sifter posts top-line summaries to current events around the globe. All news articles are from Reuters, The New York Times and BBC News.
China Passes Japan as Second-Largest Economy [New York Times]
- After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday. The recognition came when Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion
- This country has roughly the same land mass as the United States, but it is burdened with a fifth of the world’s population and insufficient resources. Its per capita income is more on a par with those of impoverished nations like Algeria, El Salvador and Albania — which, along with China, are close to $3,600 — than that of the United States, where it is about $46,000
- Although its economy is still only one-third the size of the American economy, China passed the United States last year to become the world’s largest market for passenger vehicles. China also passed Germany last year to become the world’s biggest exporter. China also passed the United States in 2006 to become the world’s largest emitter of greenhouse gases
Russia lashed by storm after heatwave [BBC News]
- Russia’s record-breaking heatwave looks set to come to a dramatic end, with a severe storm now heading for Moscow after battering St Petersburg. Nearly 100,000 people around St Petersburg were left without power, rail services were halted and trees felled amid high winds and heavy rains. Moscow is expected to be hit later. Temperatures there dropped to 25C on Monday after nearing 40C for weeks
- The emergencies ministry said the area affected by peat and forest fires was down to 45,800 hectares, compared to a peak of almost 200,000 hectares. The fires took hold amid a heatwave unseen in Russia since records began, 130 years ago. More than 50 people have died in the forest fires, but the wider death toll is much larger
- The fires and drought have also had a devastating effect on Russia’s wheat harvest. Prime Minister Vladimir Putin said that this year’s crop could be as low as 60 million tonnes, well below last year’s 97 million. The shortage is such that a ban on grain exports has been introduced, possibly until the end of the year
Suicide Bomber Kills Dozens in Attack on Iraqi Army Recruits [New York Times]
- A suicide bomber sat for hours Tuesday among hundreds of army recruits before detonating nail-packed explosives strapped to his body, killing 61 people and casting new doubt on the ability of Iraqi forces as U.S. troops head home. Some of the estimated 1,000 who had gathered there before dawn for a good spot in line were so desperate for work they returned hours after being treated at hospitals for injuries in the attack
- It was one of the bloodiest bombings in months in the Iraqi capital and was an embarrassment for Iraq’s military as it tries to reassure the nation it can fill the gap left by America’s departing military. At the end of this month, U.S. troops will number just 50,000 and will be involved only in limited combat operations
- In a similar attack last month, a suicide bomber ripped through a line of anti-al-Qaida Sunni fighters waiting to collect their paychecks near an Iraqi military base, killing 45 people in the mostly Sunni district of Radwaniya southwest of Baghdad. August, which saw the start of the Muslim holy month of Ramadan, has also been deadly. Two bombs that set off a power generator and ignited a fuel tank on Aug. 7. killed 43 people in a downtown market in Basra, Iraq’s second-largest city
U.N. secures more Pakistan flood relief funds [Reuters]
- Nearly half the $459 million needed to fund initial relief efforts following Pakistan’s worst ever floods has been secured after days of lobbying donors and warnings that the country faces a spiraling humanitarian catastrophe, the United Nations said on Wednesday
- But despite the fresh funds, only a small minority of the six million Pakistanis desperate for food and clean water have received help after floods that have killed up to 1,600 people and left two million homeless. So far food rations and access to clean water have only been provided to around 700,000 flood survivors, the U.N said. The International Organization for Migration said there were still about 700,000 households without shelter
- Victims are relying for help mostly on the military, the most powerful institution in Pakistan, and foreign aid agencies. The United Nations has warned that up to 3.5 million children could be in danger of contracting deadly diseases carried through contaminated water and insects in a crisis that has disrupted the lives of at least a tenth of Pakistan’s 170 million people
Taiwan parliament approves landmark China trade deal [Reuters]
- Taiwan’s parliament passed a trade deal with Beijing on Tuesday, the most significant agreement between the political foes of 60 years and one that binds Taiwan’s economy to China while opening doors to other countries
- The deal, which slashes tariffs on some 800 products, is considered a catalyst for similar pacts with other countries that could ease Taiwan’s diplomatic isolation imposed by China and raise its competitiveness as an export-dependent economy. The government has said the deal would create some 260,000 jobs
- China sees the deal as a step in its long-held plan to draw Taiwan under its rule, charming the island with economic sweeteners even as it continues a military build up against a territory it has regarded as its own since the end of the Chinese civil war in 1949
Hulu Is Said to Be Ready for an I.P.O. [New York Times]
- Hulu, the rapidly growing hub for online television and movies, aims to go public through an offering that could value the company at more than $2 billion. But despite its status as a big player in online video, the company currently makes little in the way of profit. In May, it reported taking in more than $100 million in revenue last year, though it added that it was on track to make that amount again by the middle of this year
- It plans to add a $9.99-a-month subscription service soon alongside its core advertising-supported business. Analysts say the move could build up its strengths against rival video-streaming services like Netflix and a rumored update to Apple TV from Apple. An offering would be among the most significant developments for Hulu in its three-year history. It was founded as a joint venture of the News Corporation, the Walt Disney Company, NBC Universal and the private equity firm Providence Equity Partners
- An initial public offering by Hulu is by no means a guaranteed success. Several major initial offerings are already in the works, including those of General Motors, the hospital operator HCA and Toys “R” Us. With the market for I.P.O.’s widely regarded as soft, it was unclear how a Hulu offering would fare
- BHP may go hostile after $38.6 billion Potash Corp bid [Reuters]
- Global miner BHP Billiton may go hostile with its $38.6 billion bid for fertilizer group Potash Corp as early as Wednesday, a source said, as investors braced for a possible bid battle. BHP Billiton, which wants to become the largest fertilizer supplier to a world where survival means more farm production, is considering bypassing the Potash Corp board, which has rejected its offer, and submit it directly to the Canadian group’s shareholders
- BHP Billiton Shares fell 3.5% and the cost of insuring its debt rose on concerns among investors in the Anglo-Australian miner that it would be forced to over-pay for Potash Corp in what is already the world’s largest takeover offer this year
- BHP Billiton has long been interested in expanding into potash for its next spurt of growth, but investors had expected it to focus on growing its own assets, including the Jansen potash deposit in Canada. Potash Corp of Saskatchewan has left the door ajar, saying it might consider a more attractive proposition
American Apparel raises going concern doubts [Reuters]
- American Apparel Inc’s (APP.A) woes continued as it raised “substantial” doubt about its ability to continue as a going concern and warned it could breach a loan covenant, sending its shares down 22 percent to a lifetime low. The company also said in a regulatory filing that it received a subpoena from the U.S. Attorney’s Office for the Southern District of New York in July, as well as inquiries from the U.S. Securities and Exchange Commission regarding the resignation of its former auditors
- American Apparel’s former auditor Deloitte had quit in March after warning of problems with the company’s financial reporting, and the subsequent reliability of its financial statements for the year ended December 31, 2009. American Apparel Chief Executive Dov Charney, who is also its largest shareholder, has been repeatedly sued for sexual harassment and the company has faced several problems in recent months from underperforming results to mass layoffs of illegal workers
- Popular with urban hipsters for “Made-in-USA” retro apparel, the company now sees losses from operations continuing through at least the third quarter, and said it may not have sufficient liquidity to continue to operate through next year. American Apparel shares were down 22% at $1.08 Tuesday afternoon on the American Stock Exchange. At their peak, the shares touched $16.75 in December 2007, after blank check company Endeavor Acquisition Corp took the company public through a reverse merger
- Google Plan With Verizon Disillusions Some Allies [New York Times]
- Hidden trillions widen China’s wealth gap: study [Reuters]
- Microlender, First in India to Go Public, Trades Higher [New York Times]
- Step 1: Post Elusive Proof. Step 2: Watch Fireworks. [New York Times]
Photograph by REUTERS/Aly Song
The landslide-hit town of Zhouqu in Gannan Tibetan Autonomous Prefecture, Gansu Province, China on August 9, 2010. Chinese rescuers armed with little more than shovels and hoes hunted for survivors of a huge mudslide, as relatives of the missing trekked into the disaster zone to look for their loved ones.
via The Big Picture: Landslides strike Zhouqu County, China
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