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Voting is underway in Crimea’s controversial referendum. It is widely expected to transfer control of the Black Sea region from Ukraine to Russia, despite an outcry and threat of sanctions from the West.

Voting is underway in Crimea’s controversial referendum. That is widely expected to transfer control of the Black Sea region from Ukraine to Russia, despite an outcry and threat of sanctions from the West.

Taken from euronews.

My intuition is that: The word "it" does not nessecarily refer to "referendum" , but the word "that" directly refers to "referendum" . I mean when we use the word "that" in second paragraph, we actually make the second sentence reliant on the first sentence, whereas in the first paragraph, the second sentence starts with "It is widely expected..." is perhaps an independent, free-standing sentence. Am I right? Many thanks in advance.

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That's the subtlety of that and if. Both the words can be used to mean the thing that has been already described. But I'll give my opinion.

When more than one thing is mentioned, it generally refers to the main subject of discussion. On the other hand, that emphasize on the last thing mentioned. This happens especially when the two sentences are not joined.

Compare:

I keep the tablet in the drawer. It is sometimes used by my daughter. (My kid uses the tab.)
I keep the tablet in the drawer. That is sometimes used by my daughter. (My daughter uses the drawer.)

This is the reason why you (and also I) feel that that refers to referendum.

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You are half right.

Voting is underway in Crimea’s controversial referendum. It is widely expected to transfer control ...

This is ambiguous: it in the second might refer either to voting (in effect, the entire preceding sentence which voting heads) or to referendum. In this case the ambiguity is trivial, since the voting and the referendum are for all practical purposes the same thing.

Now, suppose euronews had written

Voting is underway in Crimea’s controversial referendum that is widely expected to transfer control ...

In this case that is a relative pronoun, equivalent to which, and there is no ambiguity. What was in the first case an independent sentence is now a relative clause which defines referendum: we are talking about the specific referendum which is expected to transfer control.

But what you write is:

Voting is underway in Crimea’s controversial referendum. That is widely expected to transfer control ...

Here that is the subject of the verb is expected. It cannot be parsed as a relative pronoun. It can only be parsed as a demonstrative pronoun, ‘that thing over there’, which has exactly the same range of reference as it.

Note that we are not permitted to separate relative that from the NP it modifies even with a comma (much less a full stop). Relative that can only head a restrictive relative clause. There’s more about that here.

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