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Blinken warns Moscow of consequences amid troop buildup near Ukraine

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Secretary of State Antony Blinken gives a press briefing at the end of a NATO Foreign Ministers’ meeting at the Alliance’s headquarters in Brussels, Belgium, March 24, 2021.

Olivier Hoslet | Reuters

WASHINGTON – Secretary of State Antony Blinken said Sunday he was concerned about the number of Russian troops amassing on the Ukrainian border and warned Moscow that “there will be consequences” for aggresive behavior.

“I have to tell you I have real concerns about Russia’s actions on the borders of Ukraine. There are more Russian forces massed on those borders than at any time since 2014 when Russia first invaded,” Blinken said during an interview on “Meet the Press” Sunday.

“President Biden’s been very clear about this. If Russia acts recklessly, or aggressively, there will be costs, there will be consequences,” Blinken said, adding that the United States was discussing the unfolding aggression on the border with allies and partners.

On Friday, Blinken spoke to his German and French counterparts in part, about “Russian provocations against Ukraine.”

Last week, White House press secretary Jen Psaki said that the Biden administration was consulting with NATO allies about the uptick in tensions and cease-fire violations.

“The United States is increasingly concerned by recent escalating Russian aggression in eastern Ukraine, including Russian troop movements on Ukraine’s border,” she told reporters on Thursday, calling the matter “deeply concerning.”

Read more: U.S. concerned about Russian troop movements near Ukraine, discussing regional tensions with NATO allies

In recent weeks, Moscow has increased its military presence along the Ukrainian border, sparking concerns in the West of a budding military conflict between the two neighboring countries. The Russian Defense Ministry has said it is conducting more than 4,000 military drills this month to inspect the readiness of its forces.

Ukraine’s President Volodymyr Zelenskiy visits positions of armed forces near the frontline with Russian-backed separatists during his working trip in Donbass region, Ukraine April 8, 2021.

Ukrainian Presidential Press Service | Handout | via Reuters

Last month, the Ukrainian government said four of its soldiers were killed by Russian shelling in Donbass. Moscow has denied it has forces in eastern Ukraine. Since 2014, Kyiv has been battling Russian-backed separatists in a conflict that has left at least 13,000 people dead, according to U.N. figures.

Read more: The West waits for Putin’s next move as Russia-Ukraine tensions rise

Kremlin spokesman Dmitry Peskov said Friday that Moscow will move its forces across Russian territory at its discretion and called the escalating tensions “unprecedented.” He also suggested that Ukraine was on the brink of civil war, which would threaten Russia’s security.

“The Kremlin has fears that a civil war could resume in Ukraine. And if a civil war, a full-scale military action, resumes near our borders that would threaten the Russian Federation’s security,” Peskov said, according to the Associated Press. “The ongoing escalation of tensions is quite unprecedented.”

Russian President Vladimir Putin accused Ukraine of resuming “dangerous provocative actions” on a call Friday with Turkish President Recep Tayyip Erdogan, according to a readout from the Kremlin. The Kremlin has previously said that it is concerned about the rising tensions in eastern Ukraine and that it feared Kyiv’s forces were attempting to restart a conflict.

Last week, the Pentagon reiterated its calls for the Kremlin to explain its decision to mobilize troops to the border.

“The Russians are engaged in conducting a military buildup along the eastern border of Ukraine and in Crimea, which still belongs to Ukraine, and that is of concern. And we want to know more about what it is they’re doing and what their intentions are because we don’t believe it’s conducive to security and stability there.,” Pentagon spokesman John Kirby told reporters Friday.

Later this week, Secretary of Defense Lloyd Austin will meet in person with NATO Secretary Jens Stoltenberg at the alliance headquarters in Brussels.

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UK recovery gathering pace on Covid vaccine rollout

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A passageway near the Bank of England (BOE) in the City of London, U.K., on Thursday, March 18, 2021.

Hollie Adams | Bloomberg | Getty Images

LONDON — The Bank of England on Thursday said the U.K. economy is on track for a stronger economic recovery than it previously expected, underpinned by the country’s comparatively quick Covid-19 vaccination campaign.

The central bank forecast in February that the world’s fifth-largest economy would grow by 5% this year, following a 10% contraction in 2020 — the worst annual performance in more than three centuries.

The U.K.’s economic slump last year was more severe when compared to most other European economies, partly due to a slower move to implement strict public health measures to curb the spread of the coronavirus.

The BOE has now upgraded its 2021 growth outlook to 7.25%, slightly above analyst expectations.

The brighter economic forecast comes as the country gradually emerges from lockdown and more people are vaccinated against Covid.

The government’s latest data showed more than 50.6 million Covid shots have been given in the U.K. so far, with nearly 35 million first doses and 15.8 million second doses administered.

The BOE’s Monetary Policy Committee on Thursday voted unanimously to hold interest rates steady and maintain its quantitative easing program at current levels as the U.K. looks to recover from the ongoing coronavirus crisis.

It means the central bank’s main lending rate remains at an all-time low of 0.1% and its target stock of asset purchases is left unchanged at £895 billion ($1.2 trillion).

Ahead of the announcement, analysts at Deutsche Bank said they expected it to be “a very close call” on whether the bank decided to pull the trigger on tapering the pace of asset purchases.

Sanjay Raja, senior U.K. economist at Deutsche Bank, said in a research note that a decision on tapering would most likely come at the bank’s June meeting, adding this would “align nicely” with social restrictions lifting on June 21.

Investors were seen to be upbeat on the U.K.’s improving economic outlook. The U.K.’s FTSE 100 gained 1.8% in the previous session to register its best daily performance since mid-February. The share index was last seen trading around 0.1% higher on Thursday.

Sterling was up 0.2% against the dollar following the report’s publication, trading at $1.3931, while the euro gained 0.1% against the pound to trade at 86.40 pence.

Fabrice Montagne, chief U.K. economist at Barclays, told CNBC’s “Street Signs Europe” on Thursday that the BOE was “already one of the most optimistic” central banks even before raising its economic outlook.

The BOE’s February forecast was at the higher end of the consensus range, Montagne said, and an increase to its projections now “runs the risk of sounding excessively hawkish and possibly calling for early hikes.”

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China travel bookings soar during May Labor Day holiday as Covid eases

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Visitors walk along the Badaling section of the Great Wall in Beijing, China, on Tuesday, May 4, 2021.

Yan Cong | Bloomberg | Getty Images

BEIJING — Millions of Chinese rushed to travel during the five-day Labor Day holiday, in yet another sign of gradual recovery in domestic consumption.

May 1 to 5 marked the “hottest” public holiday for leisure travel since the coronavirus pandemic, Chinese travel booking site Trip.com said in a statement Wednesday translated by CNBC. The reemergence of Covid-19 on the outskirts of Beijing earlier this year prompted local authorities to restrict travel during the Spring Festival in February.

Labor Day holiday bookings for hotels, car rentals and other travel more than tripled from the same period a year ago, and rose more than 30% from 2019, Trip.com said, without disclosing dollar amounts. Shanghai Disney Resort was among the top 10 destinations, including for those 21 years old and younger, according to Trip.com.

Chinese consumers also spent 1.67 billion yuan ($260 million) at the movies during the holiday, primarily on domestic films, according to ticketing site Maoyan.

Overall, a record 230 million trips were taken within the country during that period, an increase of nearly 18% from 2019 levels, according to figures from China’s Ministry of Culture and Tourism.

However, total spending of 113.23 billion yuan ($17.48 billion) fell short of 2019’s expenditure by about 4 billion yuan, the data showed.

At that level, spending per capita during the holiday was about 75% of what it was in 2019, said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “Overall the economic trend continues to improve, but part of the service sector (is) not yet back to the pre-Covid level.”

Spending by individual consumers has lagged the recovery in China’s economy since Covid-19 temporarily forced more than half the country to shut down in early 2020. Retail sales fell last year despite overall GDP growth, before surging in the first quarter of 2021.

International travelers turn to Hainan

The rush to travel domestically comes as quarantine requirements and travel bans keep most Chinese from venturing overseas.

Chinese international travel plunged 87% last year and will not likely return to pre-pandemic levels until the second quarter of 2023, consultancy Oliver Wyman said in a report last week.

That means billions of dollars not spent overseas can potentially be spent at home or saved for future purchases, the report said, pointing out that Chinese consumers spent $245 billion abroad in 2019.

The analysis found that nearly 60% of those travelers are turning to the southern tropical island province of Hainan, which has expanded its duty-free shopping centers in the last few years.

For high-end luxury brands, Hainan will become much more attractive to them if in the future they can open their own stores instead of through a duty-free operator.

Imke Wouters

Partner at Oliver Wyman

Duty-free sales in Hainan topped 700 million yuan from May 1 to 4, according to state media, citing the latest available figures from the local customs agency. For comparison, an eight-day holiday in October recorded 1.04 billion yuan in Hainan’s duty-free sales.

“May is seen as the first (moment when) you can really see the true potential of Hainan, without any travel restrictions,” Oliver Wyman partner Imke Wouters said in a phone interview Thursday.

However, she pointed out that right now brands need to work with duty-free centers in Hainan. As a result, profitability could be up to 50% less than it would be through their own stores on the mainland.

“For high-end luxury brands, Hainan will become much more attractive to them if in the future they can open their own stores instead of through a duty-free operator,” Wouters said, noting government policy is moving toward individual store ownership.

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Nio plans to start delivering cars to Norway in September

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Bin Li, CEO of Chinese electric vehicle start-up NIO Inc., celebrates after ringing a bell as NIO stock begins trading on the floor of the New York Stock Exchange (NYSE) during the company’s initial public offering (IPO) at the NYSE in New York, September 12, 2018.

Brendan McDermid | Reuters

BEIJING — Chinese electric car start-up Nio announced Thursday it plans to begin deliveries in Norway in September, for the company’s first entry into a market outside China.

Nio plans to first launch its ES8 SUV to the new market this year, followed by its ET7 sedan in 2022. The company anticipates expanding its local staff of 15 people to 50 by the end of the year.

The Norway venture will begin with a flagship “Nio House” store in Oslo that’s slated to open in the third quarter. Four smaller showrooms are set to open in other parts of Norway next year.

More than half the new cars sold in Norway last year were battery-powered electric vehicles, according to the Norwegian Road Federation. The 54.3% proportion marked a rapid increase from 42% the prior year.

Chinese EV startup Nio aims to become the Tesla of China

Electric vehicles have dominated new passenger car sales in Norway for the last three years, with Volkswagen‘s Audi e-tron leading last year, Tesla‘s Model 3 in 2019 and Nissan‘s Leaf in 2018, according to the federation.

Other Chinese electric car makers are already selling to Norway. U.S.-listed Xpeng delivered 100 units of its G3 electric SUV in December.

Later this year, Xpeng hopes to see how customers in northern Europe respond to its P7 electric sedan, Chairman and CEO He Xiaopeng said on the sidelines of the the Shanghai auto show last month. He is recruiting new staff and plans to set up a company in the region, before looking at western and eastern Europe.

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