China 70th anniversary, Kristalina Georgieva heads IMF, UK coal plant closure
The FT's Daniel Garrahan on some of the top stories the FT will be watching this week, including the 70th anniversary of the People's Republic of China, Kristalina Georgieva's move to the head of the IMF, the closure of the UK's Cottam coal-fired power plant, and interim results from supermarket group Tesco
Produced by James Sandy, presented by Daniel Garrahan, studio filmed by Nicola Stansfield and Petros Gioumpasis
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Here are just some of the stories the Financial Times will be watching this week. The People's Republic of China celebrates its 70th anniversary. Kristalina Georgieva becomes head of the IMF. One of the UK's last remaining coal-fired power plants closes its doors. And will have interim results from the supermarket giant Tesco.
First up, the People's Republic of China will mark its 70th anniversary on Tuesday. Beijing has ramped up security ahead of what promises to be China's biggest national celebration to date. President Xi Jinping will oversee a massive military parade around Tiananmen Square. And the leader's expected to speak about China's rapid economic growth.
The country has doubled its gross domestic product since 2010. But events away from the capital threaten to overshadow celebrations. Anti-Beijing protests have been raging in Hong Kong for months now, and even bigger demonstrations are expected to draw attention away from China's National Day.
The question of Hong Kong really hangs over this 70th anniversary and the celebrations that will ensue. The protesters on the streets in Hong Kong are demanding greater democracy and more freedoms. And what the Communist party of China is all about is authoritarian rule from the very top, demanding loyalty from its people. So I do think that behind the scenes, and particularly among the leadership in Beijing, they will regard what's happening in Hong Kong as a big detractor from the serenity of this big moment, the 70th anniversary of China's founding.
Now, Kristalina Georgieva will take her place at the head of the International Monetary Fund next week. The Bulgarian economist replaces Christine Lagarde, who's stepping down to become the president of the European Central Bank. During her time in charge Ms Lagarde addressed issues such as gender inequality and climate change. And her successor is expected to take a similar approach.
She's already hinted at plans to improve diversity at the Fund. Ms Georgieva became a frontrunner for the IMF role after two years as head of the World Bank. And she's known for her experience in tackling financial problems in developing countries. When accepting the job Ms Georgieva warned that the fund's ability to tackle a global economic slump could soon be tested.
We have trade wars. We have a slowing global economy. We have uncertainty over Brexit.
And we also have a crisis in one of the fund's biggest programmes, the $57bn bailout of Argentina, which is now in jeopardy with populist candidate Alberto Fernandez likely to win the presidential election next month. So Kristalina Georgieva is well regarded. However, she has less sort of familiarity with financial crises in advanced economies. So she could face some challenges and a steep learning curve in that department.
And now to the UK, where one of the country's last coal fired power stations will shut down on Monday. The Cottam plant in Nottinghamshire was designed to run for 30 years. It's closing after more than 50 years in operation.
Cottam's owners say the facility is no longer economically viable. It's estimated that two-fifths of the world's coal-fired power stations are running at a loss. In 2012, the UK got more than a third of its electricity from burning coal. Since the introduction of a carbon price floor in 2013 that figure has dropped to almost zero. In the past few years, low carbon and renewable technologies have become cheaper, challenging coal's place in the UK energy market even further.
It's the UK's aim to have phased out coal entirely by 2023. But, in fact, it's largely happened beforehand. The coal that we burn these days tends to come on in very limited fits and starts only to balance out the electricity grid with the shortages elsewhere.
We've gone periods so far this year of more than two weeks at times without burning a single ounce of coal, not counting, obviously, what people might use in fires in country homes and things, but in actual power stations. By essentially increasing the price of carbon, in the form of carbon tax and also the EU prices on carbon, that has made the market do its job essentially. Gas is now more competitive than coal is. Renewables are more competitive than gas, for the most part. As a result, you're starting to see the system become cleaner over time.
And, finally, Tesco is set to announce interim results on Wednesday. The UK retailer faces stiff competition from discount supermarkets. The likes of Aldi and Lidl have kept the cost of products low to attract new customers and to improve their market share. Investors will be looking out for whether Tesco's own cost-cutting measures have affected profits.
A recent range of rulings by the UK's advertising watchdog suggests actually there is now very little difference in price between the discounters and Tesco. That means the worst of the market share losses should now be behind Tesco. But what about profits? Tesco is aiming for a margin this year of between 3.5 per cent and 4 per cent.
That's twice what Aldi earned in its last financial year. More cost cuts should help it get there. But it shows that chief executive Dave Lewis has a delicate balancing act to strike between keeping profits moving, keeping sales growing, and prioritising investments in the stores for the future.
And that's what the week ahead looks like from the Financial Times in London.