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Five things to watch for as China reports first-quarter GDP

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China’s National Bureau of Statistics will reveal if the country’s economic rebound from the coronavirus pandemic remains on track when it releases its estimate for third-quarter gross domestic product growth on Monday.

The IMF revised upwards its full-year projection for Chinese growth to 1.9 per cent this week. By comparison, the IMF expects the US and Indian economies to contract 4.3 per cent and 10.3 per cent this year respectively.

Here are five things to look out for as President Xi Jinping’s administration attempts to complete an economic recovery that few people thought possible at the beginning of the year.

How high can quarterly growth go?

After falling 6.8 per cent year on year in the first quarter — the first such contraction in more than 40 years — China’s economy rebounded to grow 3.2 per cent in the second quarter.

Larry Hu, chief China economist at Macquarie, projects third and fourth-quarter GDP growth of about 5 per cent and 5.5 per cent respectively. He expects growth could surge as high as 15 per cent over the first three months of 2021 because of the low base effect of this year’s first-quarter crash.

Will Beijing continue to rein in real estate investment?

In 2017, Mr Xi said that “homes are for living in, not speculating on”, signalling his administration’s determination to rein in soaring property prices, especially in China’s largest cities.

But the property sector remains a crucial growth engine for the world’s second-largest economy. As Mr Xi’s economic team, led by Vice-Premier Liu He, presses ahead with its efforts to restrict credit flows to developers, it must judge the economic impact on everything from industrial demand to regional government finances, given the importance of land sales to most local governments.

A dramatic illustration of this trade-off occurred last month when investors were spooked by reports that one of the country’s largest developers had approached the Guangdong provincial government for a bailout. China Evergrande, with debts of $120bn, denied the speculation but on Wednesday raised only about half of the $1bn it was aiming for in a share placement, triggering another sell-off of its Hong Kong-listed shares.

Can consumers and infrastructure investment come to the rescue?

After seven consecutive months of year-on-year falls in retail spending, the indicator finally turned positive in August, although it grew by just 0.5 per cent compared with the same month last year.

If consumption can rebound as strongly as exports have over recent months, the Chinese economy will be well placed to continue its recovery into next year. The IMF is projecting that China’s economy will expand more than 8 per cent in 2021.

Will fixed-asset investment return to positive territory?

Fixed-asset investment fell a record 24.5 per cent in the first two months of the year and continued to decline through August. But Monday’s figures are expected to show that it finally turned positive in September.

A People’s Bank of China official said on Wednesday that the central bank would support a temporary increase in overall debt levels, which typically fuel infrastructure investment. Figures released this week showed that China’s broadest measure of credit grew at its fastest rate in two years last month. Outstanding bank loans in September also rose more strongly than expected at 13 per cent year on year.

Can China’s booming export sector continue its strong run?

China’s ability to keep coronavirus at bay has been a boon for the country’s exporters. With factories, trucking companies and ports able to operate as normal, the country is hoovering up global demand for everything from consumer electronics sought by homebound workers to personal protective equipment. In April, China accounted for 18 per cent of total global exports.

The surge continued last month, as the country’s September exports increased 9.9 year on year.

A strengthening renminbi, however, could put a brake on the export boom. After flirting with $7.20 in late May, China’s currency has raced back up to $6.70 — a gain of 7 per cent.

In response, China’s central bank has made it less expensive for currency traders to bet against the renminbi — something the PBoC frequently does when it is concerned the currency has risen too far too fast.



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'It’s more than sport – every day we are fighting for our rights to be equal’

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French pro basketball player and podcaster Diandra Tchatchouang on her role beyond the court



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Emily Dean on how allyship amplifies the female experience on film

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When I was six years old, I decided to be an artist. When I was 12, I decided to be a filmmaker. And instead of saying no, you can’t do that, or it’s not possible, my mum bought me a video camera.

After several years of working in the industry, I’m working with a female director for the first time. And it’s been such a gratifying experience. Women express leadership in different ways. Maybe you don’t have to be the loudest person in the room. But you can have great ideas.

And the best thing about being mentored by women and being a mentor to women is that make friends with women.

There’s something so powerful the women coming alongside other women, especially in a group setting. Because it means that you can and back each other up. You can support each other’s decisions, and you can amplify each other’s voices.

It’s about seeing yourself in your work. Seeing some part of yourself reflected is really gratifying. It’s also important that we speak up for female characters. I want to see girls and women on screen who have the whole cacophony of experience of what it’s like to be female.

I want to see their flaws. I want to feel their struggles. I want to see their joy. That is so important to making a character feel real. And it took me a little while to settle into myself and realise, if the characters I like to come up with are not your everyday run of the mill characters you see in animation, that’s fine. Because this is who I am.

When you walk into a story room, when you’re working on a film, you have to leave your ego at the door. I think that can be interpreted like keep your ego out of the work. But I’d also say for women who are maybe more shy that leaving your ego at the door means you walk in. And your job is to focus on what’s best for the story and for the film.

The story needs you. The film needs you, and it needs your best ideas. It won’t thrive unless you speak up.



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Crimea ‘water war’ opens new front in Russia-Ukraine conflict

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When a cyclone drenched Crimea in rainfall last month, rivers burst their banks and thousands of people in the Russia-annexed peninsula had to be evacuated from the floods.

The silver lining to the deluge was that the rains also filled Crimea’s depleted reservoirs, temporarily alleviating a crisis brought on by an extended drought and a Ukrainian blockade of the Soviet-built canal that previously provided up to 85 per cent of the peninsula’s water supplies.

Moscow’s struggle to supply Crimea’s 2.4m residents with fresh water has become a flashpoint in an undeclared war, seven years after Russian troops seized Crimea from Ukraine. An even longer conflict between Kyiv and Russian-backed separatists in eastern Ukraine has claimed more than 14,000 lives.

Russia has accused Ukraine of “genocide” over the building of a concrete dam across the North Crimean Canal, in addition to the existing sandbag and earth dam that was built in 2014. Kyiv fears that Moscow is plotting a military incursion to secure water flows from the nearby Dnipro river.

Coupled with surging food prices and international isolation because of western sanctions, the water shortages threaten to undermine President Vladimir Putin’s promise of a better life for Crimeans under Russian rule.

Though state-run pollsters claim Putin remains more popular in Crimea than on average across Russia, the patriotic fervour that sent his approval ratings to record levels after the 2014 annexation has long since subsided.

Map showing Ukraine and the North Crimean Canal, Crimea

“The water reserves and fields have dried up,” said Viktor, 47, a Crimean who regularly travels to Ukraine for work. “Each year it’s getting worse and worse. We didn’t have this problem before annexation,” he said, adding that most Crimeans blamed Ukraine for the crisis.

A $3.7bn bridge across the Kerch Strait linking Crimea with mainland Russia has become a conduit for trucks ferrying water for locals to take away in plastic containers. Popular Black Sea tourist resorts can turn on their taps for just a few hours a day during peak droughts, while the canal has filled with grass and weeds.

Crimea’s agricultural output has fallen owing to a lack of irrigation, making it all but impossible to grow water-intensive crops such as rice.

Construction of the canal began in 1957 after the Soviet Union transferred the arid peninsula to the Ukrainian Soviet Socialist Republic to manage rebuilding after the second world war. The waterway allowed for the cultivation of arable land and helped transform Crimea into a haven for tourists.

“The canal symbolises the stupidity of the Kremlin in occupying Crimea. They didn’t weigh the consequences at a moment of electoral euphoria that was fed by their own propaganda,” said Oleksiy Reznikov, Ukraine’s deputy prime minister in charge of reintegration policies for the occupied territories.

“Why didn’t you think about water?” he asked.

The North Crimean Canal is seen with a low level of water
The severely depleted North Crimean Canal previously provided up to 85% of the peninsula’s water supplies © Pierre Crom/Getty

Workers collect potatoes on the North Crimean Canal
Workers collect potatoes on the North Crimean Canal. Ukraine blocked the irrigation channel after Russia’s 2014 annexation of Crimea © Pierre Crom/Getty

Russia, while pressing Ukraine to reopen the waterway, has launched a Rbs50bn ($680m) programme to bolster Crimea’s supplies, repairing crumbling infrastructure, drilling wells, adding storage and desalination capacity.

Russian prosecutors last week filed a lawsuit in the European Court of Human Rights accusing Ukraine of “flagrant violations” over the issue. Crimea’s governor plans to file a separate complaint demanding up to Rbs1.5tn in compensation.

“Kyiv has essentially used Crimea’s infrastructure dependence on Ukraine, which came about in the Soviet era, as a weapon of mass destruction against all Crimeans. The water blockade is an act of state terrorism and ecocide, but the international community is failing to notice the Kyiv regime’s crimes,” Sergei Aksyonov, the peninsula’s governor, said in written comments to the Financial Times.

Reznikov said Russia, as the occupation force, was responsible under the Geneva Conventions for securing water and other basic needs for local the population. Ukraine has filed its own multi-billion-dollar claims against Russia, citing losses caused by what it describes as an illegal land grab.

With tensions rising, Russia deployed tens of thousands of troops and advanced weapons to Crimea this spring, as well as to the border of the two breakaway eastern regions where Moscow-backed separatists have battled government troops into an eighth year.

Col Kyrylo Budanov, chief of Ukraine’s army intelligence unit, said Russia was looking to seize the canal as well as adjacent territory to connect Crimea with the breakaway regions. Russian troops could advance on Nova Kakhovka, the Dnipro river town where the canal begins.

Some Crimean Tatars, an indigenous ethnic group whose members largely opposed Russia’s annexation, have set up a makeshift camp near the dams to make sure the water flow does not resume.

A Crimean Tatar activist on the North Crimean Canal
A Crimean Tatar activist enters his base on the North Crimean Canal. Tatars have set up camp to make sure the water flow does not resume © Pierre Crom/Getty

A Ukraine military vehicle drives past a Soviet monument marking the entrance to Brylivka
A Ukraine military vehicle drives past a Soviet monument marking the entrance to Brylivka, a village on the North Crimean Canal © Pierre Crom/Getty

“It will be a full-scale war,” said a 55-year-old activist who gave his name as Alibaba. He said he and his fellow activists were willing to take up arms to defend the blockaded canal. “There will be nowhere to hide in these fields. Let them try,” he added.

At the Kalanchak border crossing near the new dam, Russian and Ukrainian troops have dug trench positions a few hundred meters apart.

Tensions have also flared in the Black Sea, not just with Ukraine but also with western navies. Russia fired warning shots in the path of a British destroyer sailing through contested waters off Crimea last month. Sevastopol, Crimea’s largest city, is home to Russia’s Black Sea fleet.

Moscow has insisted it would not go to war over Crimea’s water supplies, even as it conceded that Ukraine was unlikely to restore them. “All these hysterical statements from Ukrainian politicians are completely baseless — they’re just stupid, aggressive propaganda aimed at inciting hatred between the Russian and Ukrainian people. There won’t be any ‘water war’,” Crimea governor Aksyonov said.

Reznikov, the Ukrainian minister, said Kyiv was ready to provide Crimea with humanitarian assistance, including drinking water, which it already does for the separatist-run eastern territories, but no request had been made.

“For Russia to admit they’re weak is very difficult . . . it would amount to an admission that they made the wrong decision,” he said.



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