This is an audio transcript of the FT News Briefing podcast episode: Elon Musk offers to follow through on Twitter deal

Sonja Hutson
Good morning from the Financial Times. Today is Wednesday, October 5th, and this is your FT News Briefing.

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Elon Musk is offering to follow through on his deal to buy Twitter. Hundreds of thousands of Russians have fled the country. And we look at why China has not pivoted to a new form of economic growth. I’m Sonja Hutson, in for Marc Filippino. And here’s the news you need to start your day.

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Elon Musk’s $44bn deal to buy Twitter is back on the table. Just to recap, Twitter and Musk agreed to that price back in April. But then Musk tried to back out of the deal. Twitter then sued Musk to get him to follow through. That trial was set to start in less than two weeks. Things took a turn yesterday. Musk offered to complete the original deal, and Twitter said they intend to close the deal at that price. Here’s the FT’s Hannah Murphy.

Hannah Murphy
The two parties are still sort of hashing out the details of what this would look like. Our understanding is that on the Twitter side, they’re a little nervous that Musk may be just using this as leverage, as a manoeuvre to delay proceedings further, that he might back out again. So they hope that there’s sort of some ironclad assurance that this will proceed.

Sonja Hutson
So, Hannah, is there any reason why Musk would want to avoid a trial?

Hannah Murphy
So Musk was going to, later this week, have to sit for a deposition, likely for two days. So that would be sort of answering gruelling questions, possibly having more of his text messages put on display. Last week, for example, hundreds of messages between himself and some of his associates — big, high-profile Silicon Valley names — were put in the public domain as part of the discovery process. So it may be that he’s trying to avoid more potentially public embarrassment, more things coming out in public that perhaps he wouldn’t want. At this point, it may be clear, particularly because the judge has seemed to favour Twitter, perhaps on occasion more than him to, to avoid, you know, continuing with this costly litigation and the embarrassment of being forced to buy Twitter.

Sonja Hutson
That’s the FT’s tech correspondent Hannah Murphy.

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Kazakhstan says nearly 100,000 Russians have crossed into the Central Asian country in the last two weeks. This comes after President Vladimir Putin announced a nationwide conscription drive to bolster his war in Ukraine. The FT’s Polina Ivanova recently visited the Russia-Kazakhstan border.

Polina Ivanova
So on the Russian side of the border is a many-kilometres-long queue of cars, and also people spending days out in the open, queueing and waiting for the chance to cross the border into Kazakhstan, fleeing the mobilisation drive, the draft for the army in Russia.

Sonja Hutson
So, Paulina, you spoke to a number of Russians at the border who were fleeing conscription. Can you tell us the story of one of them that stood out to you?

Polina Ivanova
At a summer camp in Oral in Kazakhstan, this border town, a summer camp that has been converted to house lots of Russians, mainly men crossing the border, I met Alexander, who is from the city of Bryansk, or just outside it, who, within hours of the mobilisation decree being announced, dropped everything, left his life behind and drove to the Kazakh border. He left behind his elderly parents, his home. The horrifying thing for him throughout this war has been that his ex-wife and two children live in Zaporizhzhia, close to the front line of the conflict. What concerned him most was the prospect of being conscripted to fight in a war where he would be almost shooting at his own children in some sense.

Alexander
(Speaking in a foreign language)

Sonja Hutson
Is Russia doing anything to stop this flood of its citizens leaving the country?

Polina Ivanova
There hasn’t been a clear attempt. There have been a lot of discussions about closing borders. And part of the reason so many people fled so quickly, the scale of the exodus, was because people were afraid they wanted to get across the borders before they could close. But so far there has not been a concrete ruling on this beyond saying that people who have been informed that they are to be conscripted in this draft. So for them, the borders are supposed to be closed, but still it seems to be very patchy and some people are getting through and some not.

Sonja Hutson
That’s the FT’s Polina Ivanova.

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For a long time, China has grown at a rate that far exceeded expectations. It’s done this in recent years by massive investment in infrastructure and property that helped the country grow its labour force. One way of thinking is that a government would plan for the next phase for growth by building out its social safety net. That way, consumers feel free to start spending and your economy would continue to fire. But that is not happening in China and its growth is starting to slow.

Edward White
So one of the great frustrations that economists have when they look at China is that the conditions are there for China to actually have a much longer period of sustained growth, if China could find a way to really unleash their consumers and also to inspire the entrepreneurial class so it becomes a, you know, a virtuous cycle.

Sonja Hutson
Ed White is the FT’s China correspondent and he’s been trying to understand why China’s consumer economy just won’t kick-start. So Ed, why isn’t this happening in China? Could you tell us a bit about one of the examples you cite in your story?

Edward White
Yeah. So a good, just a sort of simple example, someone we interviewed, a young woman, Tina Yang, and she and a group of friends started a small fashion house in Guangzhou about six years ago. This is in southern China, and they were very successful initially. They had their own original clothes designed, it’s being mass-produced. They were selling through the various ecommerce channels. And it was, as Tina said to us, very exciting. And then over the past few years, sales started to slow down. The Covid situation made it a lot worse because you then had disruptions hitting factories and deliveries. But more generally, she said that actually the purchasing power, what they expected to see from Chinese consumers, just wasn’t what they thought it was. And so over time, their business has sort of started to struggle. And the work that is involved for these people to try and keep things going has just become so arduous that actually, of the eight people that were friends that started the business, five of them have left. And four of those people have returned back to the country, back to their hometowns and got jobs as civil servants.

Sonja Hutson
China is wealthy enough to provide a social safety net for its population, so why isn’t it doing that?

Edward White
That is the sort of thing that China should be able to do. They’re in a position to do it. They’ve got the fiscal headroom to do it. So we just don’t really understand why they’re not doing it, except for the fact that the calculation may well have been made, that to really unleash the Chinese middle class, that means removing the controls that the Communist party has in place, you know, around freedom of movement and freedom of speech. And that as the middle class grows and becomes more aspirational, I think Beijing is scared that those aspirations start to move from just purchasing different products to thinking about maybe we want a different political system or different leadership. And that’s at the heart of what Beijing’s concerned about.

Sonja Hutson
So where do you think Beijing will take China’s economy now that the property boom is over?

Edward White
The question now is, if you’re not going after a high-growth model or at least a sustainable low-growth model, then how do you keep improving people’s lives? And I think where this ultimately all ends is that Xi Jinping is going to be focused more on redistribution. He’s gonna be focused more on dividing up what there is and what he sees as a more equal way. And that’s a pretty big change from the kind of capitalism with Chinese characteristics that China has been pursuing since the era of reform under Deng Xiaoping.

Sonja Hutson
That’s the FT’s China correspondent Ed White.

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You can read more on all these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.

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