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Britain must build a bigger and more advanced navy to protect the country in an “increasingly hostile and unpredictable international environment,” a cross-party group of lawmakers has warned.

Earlier this week, the Defence Committee of the House of Commons published its latest report entitled “We’re going to need a bigger Navy.”

The report finds that the next decade is “one of significant risk” for the Royal Navy’s fleet, with “the rise of more assertive state adversaries, grey zone warfare, and technological risk.”

“Over the next decade the UK and the Navy will face an increasingly complex international security environment,” the report said, adding, “Russia and China will remain the primary adversaries at sea, with the relative importance of the UK’s response to each likely to shift and potentially interact through the decade.”

In its inquiry into the Royal Navy’s purpose and procurement, the Defence Committee said, “Witnesses have consistently identified Russia and China as the main adversaries in the maritime domain (as well as elsewhere).”

While it has been argued “the foremost threat is clearly the pacing threat posed by Russia,” some witnesses, such as Sidharth Kaushal of the Royal United Services Institute (RUSI), warned that “in a 10-year timeframe China could overtake Russia to become the primary challenge.”

Rob Johnson, director of the Oxford Changing Character of War Centre, predicted that the next decade will be crucial to how the UK responds to the Chinese regime.

“Even those witnesses who were sceptical of the effect the UK could have on security in the Indo–Pacific agreed that the challenge China posed to UK interests was growing,” the report said.

Tobias Ellwood, a Conservative MP who chairs the Defence Committee, criticised the government for “reducing funding, retiring capability, and asking the navy to rely on increasingly elderly vessels,” and said “a rapid programme of modernisation and growth” is needed.

He said, “Overall our navy needs more ships, armed with more lethal weapons and the most up to date technology.”

The report warned that in its current state, the navy would not be able to meet the aim’s of the government’s foreign policy shift in the Integrated Review released earlier this year, in which it has a “potentially leading role.”

Ellwood said: “Of all the services, the government is most ambitious for the navy. However, if the government does not deliver the ships and capabilities the navy needs, that ambition will be holed below the waterline.”

Domestic claimants seek edge over offshore bondholders to recoup losses after developer’s default

Chinese creditors have sued China Evergrande over more than $13bn in allegedly overdue payments, as domestic companies owed money by the embattled developer race against offshore bondholders to secure repayment.

A Chinese court assigned to handle civil lawsuits against Evergrande has accepted 367 cases with claims totalling Rmb84bn ($13.2bn) between August 24 and December 9, when the group was declared to be in “restricted default” by Fitch Ratings, according to official records reviewed by the Financial Times.

Analysts said the timing of the claims demonstrated that domestic creditors had lost confidence in the ability of Evergrande, the world’s most highly leveraged developer, to pay off its debts well before the default declaration.

“Creditors are racing to take Evergrande to court so they can be in a better position to get their money back in the event of a debt restructuring,” said Bo Zhuang, a Singapore-based analyst at Loomis Sayles, an asset manager. “This is especially true when not all borrowings are treated equally.”

The influx in creditor claims began when the central bank criticised Evergrande management in August over its debt crisis, triggering a collapse of the group’s sales and further restricting its access to financing. Days later, Evergrande warned that it was at risk of default.

Evergrande reported sales of Rmb15.3bn in the three months to November 30, according to CRIC, a Shanghai-based consultancy, compared with Rmb228bn during the same period last year.

The unravelling of Evergrande has shaken global markets and raised concerns about a spillover in the property sector, a crucial driver of growth in the world’s second-largest economy.

In August 2020, Beijing issued strict leverage limits known as the “three red lines” that led to tighter liquidity in the country’s real estate sector.

Officials have warned state banks not to help overleveraged developers such as Evergrande, but directed them to issue credit to less indebted property groups in an effort to relieve the pressure on the real estate sector. The industry is estimated to account for about one-third of total economic output in the country.

“There is no way we can repay so many creditors with our limited resources,” said an Evergrande executive, who asked not to be identified. “We will let judges decide who gets paid and how much.”

Evergrande has also issued offshore bonds totalling $19bn. International creditors will be competing against domestic creditors to secure repayment from the cash-strapped group.

State banks have been Evergrande’s most aggressive creditors. More than 40 lenders, ranging from “big four” Chinese banks such as the Agricultural Bank of China to small regional lenders, are pursuing overdue loans totalling Rmb22bn, according to court records.

A government policy adviser said banks’ exposure was worse than indicated because many were reluctant to make their potential losses from Evergrande public by taking court action. “The fall of Evergrande will have a larger-than-expected impact on China’s financial system,” the adviser said.

State-owned construction groups are pursuing Evergrande for Rmb16.4bn, complicating a push by the government to ensure the group’s existing projects are completed. Many of the projects have been funded by prepayments from homebuyers.

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Sainsbury’s, Carrefour and Ahold Delhaize clean up supply chains to cut CO2 emissions

European supermarket chains J Sainsbury, Carrefour and Ahold Delhaize will stop selling several Brazilian meat products after an investigation found they contributed to the destruction of the Amazon rainforest.

Pressure to halt deforestation has ratcheted up since last month’s COP26 climate summit in Glasgow.

It resulted in more than 100 countries pledging to end by 2030 meat production supported by livestock reared on land where rainforests and savannahs had been cleared — a main source of carbon emissions.

As the world’s biggest beef exporter, Brazil’s meat’s processing industry has long faced scrutiny over its supply chain and its impact on climate change.

The decision by Sainsbury’s, the UK’s second-largest supermarket chain, the Belgian stores of Carrefour, the French retailer, and Albert Heijn, the biggest chain in the Netherlands and part of Ahold Delhaize, follows an investigation by environmental campaigners Mighty Earth and NGO Repórter Brasil, which was published on Thursday.

The report highlights the risk of supply chain contamination by processed meat, where cows from deforested areas are sent to suppliers to be fattened and eventually slaughtered by processors such as JBS, Marfrig and Minerva. This meat ends up in European supermarkets as products, such as beef jerky, corned beef and prime cuts.

About a fifth of the beef the EU imports from Brazil each year has been linked to illegal deforestation in the Amazon rainforest and the Cerrado savannah, according to academic research. However, high consumer demand for the products has helped drive the rate of deforestation of the Amazon rain forecast to the highest level in 15 years.

Albert Heijn said on Thursday it would stop sourcing beef from Brazil for all of its stores. Sainsbury’s said it would move its own brand corned beef away from Brazil.

It has been selling corned beef processed by JBS, despite being alerted to beef products linked to deforestation by environmental and social campaign group Earthsight in 2019.

Carrefour in Belgium and French retailer Auchan added that they would remove beef jerky products made by a JBS joint venture.

Carrefour said it would “increase its surveillance in all its operating countries”, while Sainsbury’s said it had “played an active role in formulating clear asks for the beef industry in Brazil and engaged with meatpackers to achieve better supply chain transparency in the sector”.

Meanwhile, Lidl Netherlands said it would halt sales of South American beef from next month. Germany’s Metro, which stocked filet mignon from Marfrig, said it was in the process of investigating the report’s claims.

About a fifth of the beef the EU imports from Brazil each year has been linked to illegal deforestation in the Amazon rainforest and the Cerrado savannah, according to academic research. However, high consumer demand for the products has helped drive the rate of deforestation of the Amazon rain forecast to the highest level in 15 years.

Albert Heijn said on Thursday it would stop sourcing beef from Brazil for all of its stores. Sainsbury’s said it would move its own brand corned beef away from Brazil.

It has been selling corned beef processed by JBS, despite being alerted to beef products linked to deforestation by environmental and social campaign group Earthsight in 2019.

Carrefour in Belgium and French retailer Auchan added that they would remove beef jerky products made by a JBS joint venture.

Carrefour said it would “increase its surveillance in all its operating countries”, while Sainsbury’s said it had “played an active role in formulating clear asks for the beef industry in Brazil and engaged with meatpackers to achieve better supply chain transparency in the sector”.

Meanwhile, Lidl Netherlands said it would halt sales of South American beef from next month. Germany’s Metro, which stocked filet mignon from Marfrig, said it was in the process of investigating the report’s claims.

Social media company says in blog post it filed paperwork with SEC to go public

Reddit Inc. said it has confidentially filed paperwork with the U.S. Securities and Exchange Commission for an initial public offering, an announcement that comes at the tail end of a banner year for stock-market debuts.

The company said in a blog post that it had started the paperwork with the SEC but didn’t share any further details.

“The number of shares to be offered and the price range for the proposed offering have not yet been determined,” it said in the post. “The initial public offering is expected to occur after the SEC completes its review process, subject to market and other conditions.”

As of August, Reddit said it had a valuation of about $10 billion after raising more than $400 million from Fidelity Investments Inc. In February, the social-media company said it had raised about $500 million at a $6.5 billion valuation.

Reddit has been looking to build on the attention it gained when at the start of the year its WallStreetBets forum became a hot spot for the individual investors who rallied around GameStop Corp. and other stocks.

The episode brought in millions of new users, Reddit CEO Steve Huffman said in its wake, as well as new advertisers, the source of the bulk of the company’s revenue. He has also said that with an IPO, he would want to make Reddit’s share offering more accessible to individual investors.

San Francisco-based Reddit, founded in 2005, is known for its message boards on an array of topics, plus its “ask me anything” digital town halls with celebrities, politicians and subject-matter experts. The company was sold to Condé Nast in 2006, and the magazine publisher’s parent, Advance Publications Inc., spun Reddit off in 2011 and remains a shareholder.

Over time Reddit has grown to outpace rivals such as Digg to become a haven for niche communities to gather and a go-to source of news. Reddit had more than 50 million daily users as of January, according to its website. In August the company said it reached $100 million in advertising revenue in a quarter for the first time, almost triple the prior-year figure, but that it remained unprofitable.

Reddit’s market debut will come after a year for IPOs like no other. More than 900 companies have gone public in 2021, raising nearly $300 billion in 2021, including electric vehicle maker Rivian Automotive Inc., dating app Bumble Inc. and mobile-videogame maker Playtika Holding Corp.

Along with Fidelity, Reddit’s investors include venture-capital firms Andreessen Horowitz and Sequoia Capital, and Chinese technology conglomerate Tencent Holdings Ltd.

In recent years, Reddit has been taking steps to grow by investing in areas such as video and consumer products, as well as by moving into international markets. But like many other social-media companies, it’s also been plagued with content-moderation challenges, including how to stop the spread of misinformation and calls for violence.

In 2020, Reddit banned “The_Donald,” a community devoted to former President Donald Trump, saying moderators frequently ignored content that violated its platform’s rules.

Thanks to the GameStop trading frenzy, Reddit has become a hot spot this year for everyday Wall Street investors seeking advice. At The Wall Street Journal’s Tech Live conference in October, Mr. Huffman said he was hoping a lot of individual investors would participate in Reddit’s initial offering.

“Retail investors are usually the last and probably at the worst price” for initial offerings, Mr. Huffman said at the event. “But the way the market is evolving to be more fair I think is really exciting.”

Unions to protest against planned tax cuts that they say will benefit higher earners

Workers from two of Italy’s largest trade unions will strike on Thursday to protest against government economic and fiscal policy just days ahead of parliament’s approval of a crucial budget law.

The general strike marks the first big face-off with Mario Draghi, Italy’s prime minister, since the former European Central Bank chief took the helm in February. It highlights the political challenges his government faces in passing crucial structural reforms, including on tax and pensions, to ensure that Italy gets tens of billions of euros from the EU to aid its post-pandemic recovery.

The CGIL and UIL labour unions — which have a combined membership of more than 7.5m people — said the announced budget was “unsatisfactory”. Their main objection is to an envisaged €8bn of tax cuts, which unions say favour higher earners. Retirement rules and labour contracts are other causes of disagreement.

Pierpaolo Bombardieri, the UIL secretary-general, said the government had prioritised political compromise over social demands. “When there’s a [complicated] political mediation, there’s no room for one with the [unions],” he told the Financial Times.

Under the measures announced by the government, workers earning between €28,000 and €55,000 per year will benefit from a reduction in their tax rate, unlike the poorest part of the population. Unions say the government has not devoted enough of its attention to those who were affected the most by the economic fallout from the Covid-19 pandemic.

CISL, Italy’s other main trade union, has said it will not take part in the strike, saying it risks “radicalising positions at a delicate time for the country”.

The strike shows the balancing act for Draghi, who as the leader of a national unity government is trying to pass reforms while rebooting the country’s economy and working to avoid a fourth wave of Covid-19 infections.

Bombardieri said tax cuts should have focused on reducing labour costs that were among the highest in Europe, rather than reducing tax rates on personal income. “In the face of rising inflation, tackling the cost of labour would have increased real wages,” said Bombardieri.

On Tuesday, the government announced it would allocate €300m to mitigate the impact of rising energy costs on lower earning families. A meeting between union chiefs and the government to discuss the pension reform, another sticking point of the discussion, has been scheduled for Monday.

The prime minister’s office said the unions’ choice to stage the strike was “unjustified” while the leader of the League, Matteo Salvini, called union leaders “irresponsible”. A spokesperson for the Democratic party said the party hoped to continue a constructive dialogue with CIGL and UIL after the strike.

Bombardieri said it was “fair to raise questions on situations of social distress”.

“The narrative that everything is going perfectly well and the exclusive focus on the country’s GDP growth figure is misleading,” he said.