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China’s economy expanded 6.9 per cent in the second quarter, outstripping government targets. The surprise uptick means the economy is on track for its first year-on-year acceleration since 2010. But risks from rising debt and overcapacity in parts of the manufacturing sector still loom large. Vigilance against mounting financial risks has become the top policy priority for President Xi Jinping, who wants to ensure economic and social stability in the run-up to a Communist party congress that will mark the beginning of his second five-year term.

The president further tightened his grip on power on Monday with the appointment of an ally to a key political position. Online censorship has also escalated as Mr Xi prepares for the autumn party congress, where key appointments will be announced. The latest victim is fictional bear Winnie the Pooh, who has apparently become too politically sensitive to be mentioned on Chinese social media, including Sina Weibo and WeChat. While no official explanation was given, observers suggested the crackdown was related to comparisons of President Xi with the portly bear that previously went viral on social media. (FT)

In the news

South Korea proposes talks with Pyongyang
Seoul’s new president, Moon Jae-in, on Monday made his first formal overture to the government in North Korea with a proposal for military talks to discuss ways of avoiding hostile acts near the heavily militarised border. There was no immediate response from Pyongyang. (Reuters)

Warning of a $120bn cyber attack
An extreme cyber attack could cause more than $120bn of economic damage, according to estimates from Lloyd’s of London. That would make it more expensive than big natural catastrophes such as Superstorm Sandy in 2012. (FT)

Crisis in Venezuela
More than seven million voters have voted in an unofficial, opposition-organised referendum in Caracas. They strongly opposed government plans to rewrite the constitution in a vote marred by violence. More than 100 people have died in political violence since April. Now Cuba is being courted to support a regional diplomatic push to staunch the country’s growing crisis. (BBC, FT)

Brexit negotiations
Round two of Brexit talks resumes today. But calls for the EU and UK to “get down to business” were overshadowed by concerns that prime minister Theresa May’s cabinet was still arguing over what form an exit should take. The disarray has confounded British business leaders too: many are unsure where to voice their concerns and are shocked at the lack of preparation by the UK government. (FT, Independent)

UAE orchestrated Qatari hack
The United Arab Emirates was behind the hacking of Qatar government sites, according to US intelligence. The hacking of government news and social media sites sparked the ongoing diplomatic crisis between Qatar and its neighbours. (WaPo)

The day ahead

US earnings
Some big names report second-quarter earnings including Altaba, BlackRock and Netflix. Netflix chief executive Reed Hastings reveals how he runs his online streaming company like a champion sports team: “If you want job security you don’t go into sports — and you don’t join Netflix.” (FT)

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

What we’re reading

The 25-year battle against corporate claptrap
Lucy Kellaway on her life’s work and how the exponential rise of guff in business shows no sign of abating: “Over the past two decades, two things have happened. Business bullshit has got a million per cent more bullshitty, and I’ve stopped predicting a correction in the marketplace. I’m 110 per cent sure there won’t be one.” (FT)

Maids v madams
Last week, a dispute between a maid and her employer erupted into a full-blown riot at a complex outside Delhi, offering a window into the complicated relationship between the servant and the served in India. (NYT)

How to mismanage a crisis
How does a company go from a global leader in its industry to filing for bankruptcy in a matter of years? Just ask Takata. The airbag defect that forced the recall of 100m cars made headlines, but Takata was undone by its failure to manage the fallout of the scandal. (NAR)

The (next) big short
For a small band of hedge funds that slapped down prescient bets against the tottering US housing market, the financial crisis was the biggest money-spinner in generations. Some investors think they have now found the next “big short” in the retail industry. (FT)

Hunting in the world’s dirtiest places
Drug resistance — the ability of bacteria to defend themselves against the compounds we use to kill them — has impaired the effectiveness of almost every antibiotic produced since the first ones were developed in the 1940s. Now an old practice of sampling dirty, germ-filled places has been revived in an effort to find a solution. (The Atlantic)

Video of the day

The week ahead 
Daniel Garrahan previews some of the big stories in the week ahead, including the second formal round of Brexit negotiations, Netflix earnings and the Bank of Japan's latest monetary policy meeting. (FT)


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