Demonstrative Pronouns これ, それ, and あれ are used as the subject of Structure 1.
これ refers to a thing/things near the speaker(i.e., "this thing near me"). それ refers to a thing/things closer to the person spoken to(i.e., "that thing near you"). あれ refers to a thing/things away from both the speaker and the person spoken to(i.e., "that thing over there"). These words are never used immediately before nouns.
This is a book.
それは にほんの とけいです。
That is a Japanese watch/clock.
That [over there] is a bus.