Jan 8 update

An Israeli airstrike killed two Palestinian journalists in Gaza, according to officials there. Al Jazeera, a media network for which one of the reporters had worked freelance, said the attack was deliberate. Meanwhile six Palestinians and an Israeli police officer were killed during fighting in the West Bank. This week Israel’s cabinet is expected to approve a wartime budget for the year ahead.

American investigators began looking into why part of a Boeing 737 Max 9 fell out of an aircraft operated by Alaska Airlines. Earlier the Federal Aviation Administration, the country’s airline regulator, ordered other planes of the same model used by American airlines or in American territories to be grounded while inspections were carried out. Several defects have been found in Boeing planes in recent years.

A day before America’s House and Senate return from their break, congressional leaders said they had reached a $1.6trn deal to finance the federal government in 2024. Two deadlines loom: around one-fifth of funding will run out on January 19th, with the rest expiring on February 2nd. Before then recalcitrant House Republicans will need to be won over—no small feat.

Russia launched three cruise missiles and 28 drones towards Ukraine overnight, according to Ukrainian officials. Most were aimed at the south and east of the country, with a spokesperson for Ukraine’s air force saying that the Kremlin was shifting its focus to “the frontline territories”. On Saturday a Russian missile strike killed at least 11 people in Pokrovsk, a city in eastern Ukraine.

Ikeda Yoshitaka, a Japanese politician and member of the ruling Liberal Democratic Party, was arrested in Tokyo over suspicions he violated fundraising rules. Mr Ikeda is the first arrest in a corruption scandal engulfing the LDP. In December prosecutors launched a criminal investigation into funds—potentially worth ¥500m ($3.5m)—that allegedly went unreported by allies of Abe Shinzo, the former prime minister who was assassinated in 2022.

Nearly 7,000 Rohingya refugees were left homeless after a fire at a camp in south-eastern Bangladesh. The United Nations refugee agency said around 800 shelters were destroyed, along with mosques and health and education facilities. Almost a million Rohingyas—a persecuted Muslim minority from neighbouring Myanmar—live in the camps of Cox’s Bazar, where crowded conditions often result in disastrous blazes.

Mexican authorities said they were investigating a recent massacre in Guerrero, a south-western state. Police found five burned bodies stacked on a car in the desert on Friday; footage circulating on social media appeared to show more people who had been dismembered or shot. Two rival criminal groups have been vying for control of the region.

Figure of the day: 65%, the proportion of chief executives who expect AI to have an impact on their businesses in the next three to five years. Read the full story.

---

PHOTO: US NAVY

China’s spying spooks America

On Monday a judge in California will sentence a navy sailor who pleaded guilty to passing secrets to Chinese intelligence in exchange for bribes worth nearly $15,000. Wenheng “Thomas” Zhao, a petty officer at a base in Ventura County, could spend 20 years in prison. The Chinese-born American citizen admitted in October to handing over information about a military exercise in the Pacific and blueprints for a radar system in Japan, among other things.

The case, one of two involving naval servicemen, is further evidence of the scale and breadth of Chinese espionage in America, with China seeking not only military secrets but wholesale information about Western technology. In October the FBI hosted the counter-intelligence chiefs of the Five Eyes—America, Australia, Britain, Canada and New Zealand—in Silicon Valley to highlight the theft of intellectual property, describing China as the “defining threat of this generation”.

PHOTO: AP

Germany’s gloomy manufacturing and trade

It is a bad time to be a German manufacturer. International demand is sluggish. Germany’s biggest export—cars—is under threat from cheaper Chinese EVs and American protectionism. Higher interest rates are hitting investment spending, which lowers demand for machinery (Germany’s second-biggest export). And domestic energy prices are too high to competitively produce certain chemicals: the third-largest export.

The latest data on German trade and manufacturing for November, published on Monday, are set to be suitably cheerless. They will probably show that imports have kept falling faster than exports, though both are declining. That, ironically, improves the trade balance—but it is a sign of weakness in the German economy. Manufacturing orders are below their level of 2015, after a post-pandemic boom. One bright spot is that surveys indicate that the decline in new orders for industrial goods is slowing. But it will be some time before Germany’s industry and trade are a source of strength again.

PHOTO: GETTY IMAGES

An unhappy new year for American lawmakers

Last year America’s Congress only passed 27 bills that became law—making 2023 its least productive year this decade. When the Senate returns on Monday it will have lots to do, and limited capacity for doing it.

A bipartisan group of senators has spent months negotiating to provide aid for Ukraine and other American allies in exchange for tightening border security. They hope to share an outline of a deal this week. As well as persuading other senators, they will also have to win over the House, which is controlled by a paper-thin Republican majority. It has recently sounded more hawkish on the issue. Mike Johnson, the speaker, could face rebellion if he accepts terms unpopular with his party’s right wing.

At least congressional leaders reached a deal on Sunday to fund the federal government in 2024, to the tune of $1.66trn. They are racing against the clock: a first tranche of funding for government operations expires on January 19th, and the rest runs out on February 2nd. But the agreement is sure to be a tough sell in the House. Previously asked about the chances of avoiding a partial government shutdown, the White House budget director had declared herself “not optimistic”.

PHOTO: REUTERS

A grim outlook for Britain’s government

Britain’s Parliament also returns from its Christmas recess on Monday. It has a heap of legislation to work through, including proposed laws on regulating digital markets, residential properties and a highly controversial scheme to deport asylum-seekers to Rwanda.

But all attention will be elsewhere: on the long campaign for the general election, which Rishi Sunak, the prime minister, has indicated will be held in the second half of the year. That will be a gruelling slog for Conservative politicians, who are trailing by up to 20 points in opinion polls. And other tests of the government’s popularity will come sooner. By-elections are slated for Wellingborough and Blackpool South, triggered by the misconduct of two Tory MPs. A third awaits in Kingswood: Chris Skidmore, a leading figure in the Conservative environmental caucus, resigned from Parliament on January 5th in protest over legislation which would permit new oil and gas exploration. The Labour Party are well-poised to take all three.

PHOTO: REUTERS

College football’s winning formula

In America, college football is big business. The country’s universities train the athletes that are drafted into the National Football League, the world’s most lucrative sports competition. On Monday night the final of the national College Football Playoff will determine which institution has the best team in the country. The Washington Huskies play the Michigan Wolverines at the NRG Stadium in Houston, Texas, in front of a sold-out crowd of more than 70,000.

According to analysis by Sportico, an analytics company, Washington reported revenue in excess of $130m in 2021-22, while Michigan raked in $91m. Such earnings are comparable with those of established clubs in the English Premier League, the world’s richest soccer competition. And the future for college football finances looks bright: the current four-team playoff tournament is expanding to 12 from next season, which is all but certain to ensure a big jump in broadcasting revenue.