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North Korea on Sunday tested its sixth and largest nuclear device, a demonstration of power that triggered a magnitude 6.3 earthquake around the area of its test site. The “perfect success” of what Pyongyang claimed was a hydrogen bomb capable of being mounted on a ballistic missile marks the latest show of defiance to the international community, particularly the US, amid a tense stand-off over the regime’s rapidly developing weapons programmes. It is also a slap in the face for China, the one country with the power to strangle North Korea’s economy with potentially fatal effects for the Pyongyang regime, as the Brics summit gets under way in the coastal Chinese city of Xiamen.

Global leaders, including Donald Trump, condemned North Korea, but Mr Trump took the unusual step of also criticising US ally South Korea for engaging in “appeasement” — while also reportedly considering withdrawing from the five-year-old bilateral accord — sparking criticism in foreign policy circles. Meanwhile, South Korea said it was considering deploying its most powerful US tactical weapons. Asked whether he was planning to attack North Korea, Mr Trump told reporters, “We’ll see.” The latest test throws up a host of new complexities for the US leader.

Pyongyang had earlier threatened a high-altitude nuclear blast. Here’s our long-read on the rising threat of North Korea. Here’s Gideon Rachman on why this test brings a day of reckoning even closer. (FT, NAR, Reuters, NYT, WSJ, Yonhap, WaPo)

In the news

State-backed companies lead China M&A
The state has re-emerged as China’s top overseas dealmaker in 2017 after authorities pulled back on an ambitious run of private offshore investment. State-owned enterprises and funds announced $28.7bn in cross-border acquisitions in the first half of the year, greater than the $26.6bn in deals struck by private enterprise, according to an analysis from PwC and data from Thomson Reuters. (FT)

Narendra Modi shakes up top team
India’s prime minister carried out one of his biggest ministerial reshuffles since taking power in 2014, in the wake of disappointing data on his controversial demonetisation exercise that gave fresh ammunition to his opponents. The reshuffle involved changes to the roles of some of Mr Modi’s most prominent ministers, including finance minister Arun Jaitley, who had been doubling as defence minister amid tensions with China over disputed Himalayan territory. (FT)

China’s migrants feel the pinch
Average nominal wage growth for “migrant” workers — whose official residence is in the countryside but who venture beyond their hometowns and villages for employment — fell below 7 per cent last year as consumer prices rose 2 per cent. Urban workers in China have also seen their wage packets grow more slowly as overall economic growth has declined to its slowest in 25 years. But the declines for migrant workers have been more dramatic compared with the rises of more than 20 per cent seen in the wake of the financial crisis. (FT)

Tories revolt against May’s call for loyalty
Pro-EU Tories rejected a call for loyalty from Theresa May, raising the possibility that the UK prime minister could suffer a parliamentary defeat over some parts of her Brexit legislation. (FT)

Cambodia arrests opposition leader
The government issued a statement accusing Kem Sokha of treason shortly after police detained him in Phnom Penh in a surprise raid. It was the latest sign of a crackdown by authoritarian leader Hun Sen, who has been in power for more than 30 years, has put increasing pressure on political dissent and the media ahead of next year’s national elections. (FT)

The day ahead

Tesco case
The trial of three former senior Tesco executives begins at Southwark Crown Court in London. Christopher Bush, who was managing director of Tesco UK, Carl Rogberg, who was UK finance director, and John Scouler, who was UK food commercial director, were charged by the Serious Fraud Office in September 2016 on fraud and false accounting charges. The men pleaded not guilty later that month. (Reuters)

Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.

What we’re reading

Single and loving it
Meet Alibaba’s Daniel Zhang, the man who invented Singles Day — an annual frenzy of online consumerism in China that far outstrips Black Friday in the US, on which it is modelled. The chief executive of the ecommerce behemoth sits down for a chat with the FT. (FT)

Lunch with Rinat Akhmetshin
The former Soviet army officer talks about that meeting in Trump Tower — the one that was definitely about adoptions, then, based on email evidence, most definitely not about adoptions: “I will never f**k with Russian state,” he says in idiosyncratic English spoken with a light Russian accent. “I will never do things against Russian government. It’s stupid,” he adds. “Simply, the stakes are too high.” (FT)

How to get rich in Trump’s Washington
Meet the new breed of lobbyists inhabiting Donald Trump’s swamp: “Unlike other people on K Street, Lewandowski did not pretend to be an expert on the legislative calendar or the fine points of the Administrative Procedure Act. He was an expert on Trump.” (NYT)

Why we went back to school
When FT columnist Lucy Kellaway announced she would retrain as a teacher, she called on others to join her. So will they be any good? “I’m worried about my own transformation from pampered columnist to maths teacher — how will I remember 200 names when I can’t remember my own children’s?” But she is also worried about the other 45 trainees. As this whole mad caper was my idea, I feel responsible for everyone else. Most of all, I am anxious that this experiment works so that more people like us will do it too.” (FT)

A most implausible machine
A review of a new book on the invention of the Chinese typewriter, and how reimagining the western version for Chinese characters led inventors in all sorts of directions. (WSJ)

The martyring of Colin Kaepernick
When a back-up quarterback for a losing football team launched a personal protest against racial inequality, he kept it small and unobtrusive — he knelt during the playing of the National Anthem before games. But the mostly white NFL team owners have since blackballed Mr Kaepernick, refusing to employ a once top-flight player — and they have turned him into a martyr. (Politico)

Video of the day

The week ahead
The FT’s Josh de la Mare has the stories to watch for in the week ahead, with Britain’s Brexit strategy taking centre stage in parliament, while markets are focused on the latest economic data from the Fed, and Pope Francis goes to Colombia, the first papal visit to the country in 31 years. (FT)

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