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Lost Japanese Boy to be Released from Hospital Today; Hillary Clinton Named Presumptive Nominee by AP; At Least 11 Killed in Carbomb Attack on Police Bus in Istanbul; Heineken Tapping Asia Last Frontier Market. Aired 8:00a-9:00a ET

Aired June 07, 2016 - 08:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[08:00:15] KRISTIE LU STOUT, HOST: I'm Kristie Lu Stout in Hong Kong and welcome to News Stream.

Istanbul under attack again. At least 11 people were killed by a car bomb in the latest strike on the Turkish city this year.

Plus, a step closer to the White House. We'll tell you how Hillary Clinton is making history as the Democrat's presumptive nominee.

And heading home, the Japanese boy abandoned as punishment is out of hospital. Will police charge his parents?

This hour, we are keeping a close eye on Turkey and the situation there. Police in Istanbul are chasing information on a deadly bombing that

struck just a few hours ago. A police bus came under attack in the historic district of Biasit (ph). At least 11 people are dead, seven

police, and four civilians, dozens are wounded, and no one has claimed responsibility.

Now for more on this story, let's go straight to Ian Lee. He is following developments for us from Cairo.

And Ian, the historic center of Istanbul came under attack earlier today. Tell us what happened.

IAN LEE, CNN CORRESPONDENT: Yes, Kristie. And this is right next to Istanbul University where students were taking finals.

Now, those exams have been postponed after this attack. Investigators are scouring the area, looking for clues, but primarily looking for who

carried out this attack as well as ways to prevent it from happening again.

When you do look at this attack, or attacks in Turkey, there really are two different types. You have attacks that go after civilian targets

and then attacks that go after the government, including the police and army.

And when it comes to civilian targets, usually those are carried out by suicide bombers wearing bomb vests, and carried out by ISIS. When you

look at the attacks against the police -- and note that seven police officers were killed in this attack, as well as four civilians -- these

sorts of attacks against the government tend to be carried out by Kurdish militants, the PKK. They also tend to use car bombs, a type of explosion

that we saw today.

Although no one has claimed responsibility, it does seem to be the MO of a Kurdish group.

LU STOUT: Yes, no claim of responsibility, but a lot of scrutiny on the PKK.

And we know there has been a wave of violent attacks in Turkey by Kurdish militants, by ISIS. Can Turkey somehow better secure itself?

LEE: I think that is the big question, because after all of these attacks you do have the government coming out and they say essentially the

same thing, that this is an attack against the Turkish people, that we will not succumb to this violence, that we will be strong, our resolve is

strong, But at the same time, you do see a number of these attacks happening on a fairly regular basis.

Last January, you had ten German tourists killed in an ISIS attack in Istanbul. Then in March, you had three tourists killed, three Israels, one

Iranian -- four tourists, in Istanbul. And then in Ankara, you had dozens killed in a PKK attack in March as well. So you are seeing a frequency to

these attacks.

And on one side you have people who are saying where is the government? Why haven't they been able to stop these sorts of attacks?

On the other side, you do have -- especially people who support the government and President Erdogan, saying that our resolve is strong, that

we won't stop until this violence ends.

But not when it comes to the Kuridsh violence, a lot of this resonates -- and comes from the southeastern part of Turkey where just last year a

ceasefire broke down between the Turkish government and Kurdish militants. And since then, it has been raging and dozens and dozens of people have

been killed with really no end is sight.

LU STOUT: You know, and as the, this wave of attacks continues unabated, it not only undermines people's faith in the government to be

able to protect them, but also the economy as well. How has Turkey's economy been hit?

LEE: Oh, that's right. Tourism has taken a large hit since these -- these waves of bombings have taken place. And it already was suffering,

because Turkey shot down a Russian fighter jets that Turkey said violated its air space. In retaliation, the Russians basically stopped, or advised

Russian tourists not to vacation in Turkey. And then you have these strings of bombings.

And this is the summer, this is when a lot of tourists go to Turkey from all over, and since these bombings have really turned off tourists, and

that has affected the economy drastically.

[08:05:36] LU STOUT: More deadly violence in Turkey this day. Ian Lee on the story for us. Thhnk you, Ian.

Now, in the race for the White House, Hillary Clinton is now the likely democratic nominee, but she isn't celebrating just yet. Now, the

final Super Tuesday is upon us. Voters in six states are deciding who they want as their nominee for president. The big prize this Tuesday, of

course, is California.

And Hillary Clinton and her Democratic rival Bernie Sanders are both fighting hard for every

last vote.

Hillary Clinton is now the first woman in the history of the United States to become the presumptive nominee of a major political party, a big

milestone here.

Now joining me now with more is CNN's Chris Frates. He joins me live from L.A. And, Chris, we know that Clinton has garnered enough delegates

for the nomination, and yet she is still urging her supporters to go and vote today.

Why is that?

CHRIS FRATES, CNN CORRESPONDENT: Well, Kristie, certainly she doesn't want to

suppress voter turnout, right? She wants to make sure that her voters come out and that they vote today. And it's not necessarily how she would have

chosen to make history, getting enough delegates to proclaim the presumptive nominee title before all the votes were even cast.

And so we did see Hillary Clinton and Bernie Sanders not make much of that announcement overnight. They want to make sure their voters come out

and vote today.

(BEGIN VIDEOTAPE)

HILLARY CLINTON, FORMER SECRETARY OF STATE, PRESIDENTIAL CANDIDATE: According to the news, we are on the brink of a historic, historic,

unprecedented moment.

FRATES (voice-over): Overnight Hillary Clinton clinched enough delegates to become the presumptive Democratic presidential nominee.

CLINTON: We're going to fight hard for every single vote, especially right here in California.

FRATES (voice-over): But she is not claiming that historic milestone just yet. Instead, focusing on getting her supporters to the polls in the

final six states holding contests today.

SEN. BERNIE SANDERS (I), VT., PRESIDENTIAL CANDIDATE: In case you haven't noticed, there are a lot of people here tonight. Thank you.

FRATES (voice-over): Clinton's rival, Bernie Sanders, is insisting that the primary contests aren't over yet, his campaign releasing a

statement arguing that super delegates can change their minds before the July convention. Saying, quote, "It is wrong to count the votes of super

delegates before they actually vote at the convention this summer."

The senator not acknowledging Clinton's triumph at a rally in San Francisco but softening his rhetoric when asked about the possibility of

endorsing her.

SANDERS: Let's assess where we are after tomorrow before we make statements based on speculation.

FRATES (voice-over): Clinton is hoping to bring Democrats together quickly after this long and bruising primary season.

CLINTON: I'm going to do everything I can to unify the Democratic Party, an I certainly am going to be reaching out to Senator Sanders and

hope he will join me in that because we have got to be unified going into the convention and coming out of the convention.

FRATES (voice-over): Clinton is poised to get a major boost from President Obama, who sources say could endorse her as early as tomorrow and

is itching to take on Donald Trump.

(END VIDEOTAPE)

FRATES: Now, while we wait to see when the president comes out to endorse Hillary Clinton we do know that she got a big endorsement just this

morning from House Democratic leader Nancy Pelosi. Pelosi announcing that she voted for Hillary Clinton here in her home state of California, that

she is endorsing her for president. And we also know that on Sunday the president called Bernie Sanders. Sanders didn't want to talk a lot about

what that phone conversation entailed. And going forward, neither side really wants to talk about the fact that she has now clinched enough

delegates to become that presumptive nominee.

Both Clinton and the Sanders campaign, Kristie, want to make sure their supporters come out to the polls today. They want to leave it all on

the field. And so they're not talking about what we all know to be the math at this point, Kristie.

LU STOUT: Yeah. As you said, I mean, Bernie Sanders, he is still pushing for votes in California. But what is his goal now? What does he

want to achieve?

FRATES: Well, certainly, you know, he has said for the last few days that he's going to take this campaign all the way to the convention,

because, remember, some of the delegates that Hillary Clinton has that helped get her to that magic number of 2,383, the amount of delegates she

needs to clinch taht nomination are super delegates. Those are elected officials, former elected officials, essentially the big Democratic Party

big wigs, and they can change their minds at anytime.

Sanders trying to say, look, I want -- the time to change their minds before the convention in

July. But that's going to be a really tough climb for him. He was a little bit more conciliatory yesterday when asked if he would endorse

Hillary clinton. He said, let's wait and see what happens today. And as you know, Kristie, things always tend to change very quickly after a big

election night. So, we'll see where we stand tomorrow morning.

[08:10:12] LU STOUT: Yeah, this has been a very, very interesting and fluid race all along.

Chris Frates reporting for us live from Los Angeles, thank you.

And be sure to stay with us for the final Super Tuesday of the election season. We'll be bringing you the latest results, speeches,

analysis, it's all day coverage happening right here on CNN.

Now, international aid groups say civilians who escaped from the Iraqi city of Fallujah, they are in desperate need of help. They say it's a race

against time to provide them with food and water.

Some 60,000 people are now taking shelter in overcrowded camps. And, remember, they are just kilometers away from the front lines where Iraqi

forces are battling ISIS. Aide workers say it is critical that they be moved to safer areas.

The Fallujah campaign is part of a larger fight to oust ISIS from the region. And at the forefront of America's air offensive in the USS Harry

Truman now based in the Mediterranean Sea.

The aircraft carriers launched more bombing runs on ISIS than any other U.S. ship, and the assaults are getting more intense.

Fred Pleitgen has been onboard, he joins me now from the Greek island of Crete. And, Fred, we know that the USS Harry Truman is front and center

in this fight against ISIS. You've been onboard. What did you see?

FREDERIK PLETIGEN, CNN INTERNATIONAL CORRESPONDENT: Yes, Kristie, the numbers are actually really staggering when you look at what USS Harry

Truman has already done in the fight against ISIS. You're talking about more than 1,800 sorties flown by its pilots, more than 1,500 pieces of

munitions dropped on ISIS targets, that's over the period of the past six months alone.

And as we noted yesterday, the carrier is even more effective now that it's here in the Mediterranean Sea very close to those ISIS targets. And

when we were onboard, we really saw 24/7 operations night and day. Here's what it looked like.

(BEGIN VIDEOTAPE)

PLEITGEN (voice-over): Even in the night, the U.S.S. Harry Truman's operations never stop. A relentless around-the-clock bombing campaign

against ISIS now in a critical stage.

Many missions means lots of bombs need to be ready all the time. Aviation ordnance man Ronald Kennedy from Baltimore, Maryland, shows me

some of the most common munitions, like this 500-pound guided bomb.

RONALD KENNEDY, AVIATION ORDNANCE: This is a UB-38 right here. Most common. We drop these on the regular. We also hold some air-to-air missiles

but air-to-ground right now and bombs are the favorite.

PLEITGEN (voice-over): Ordnance men and women constantly haul bombs and missiles into elevators headed to the carrier's flight deck, where

they're mounted to the jets.

KENNEDY: First we get the call then we have to build the bomb and stuff like that. And first with a bomb body then we have to actually

assemble the tailpiece, then we actually, you know, configure the nose piece of the bomb, put it all together, assemble it.

PLEITGEN (voice-over): This carrier has targeted ISIS more than any other ship in America's fleet, first from the Persian Gulf and now closer

to Syria in the Mediterranean.

The crew of the U.S.S. Harry Truman has dropped more than 1.5 million pounds of ammunition on ISIS targets over the past couple of months. And

now that the ship is here in the Mediterranean, the bombing runs are continuing at a high pace.

That's helped push ISIS back both in Iraq and in Syria where allied forces seem close to liberating several of the group's strongholds.

But the fast pace of operations also means working overtime for maintenance and logistics crews, repairing aircraft and moving them in and

out of the hangar bay.

Now in the seventh month of the Truman's deployment, commanders say they try to make clear to all those on board that they're making a

difference as ISIS continues to lose ground.

UNIDENTIFIED MALE: We try to explain so that each sailor knows, as they get their different job, they know that, OK, I think the initial

numbers were 25 percent and now we're up to ISIS losing 45 percent of the ground that they had in Iraq. So those numbers are tangible to them.

PLEITGEN (voice-over): The Truman's crew will remain here for several more weeks, continuing their intense aerial campaign against ISIS, no

matter what time of day.

(END VIDEOTAPE)

PLEITGEN: So, you can see there, Kristie, a very complex operation that they're running there. They're also a very efficient operation. Of

course, those men and women who are onboard have been doing that for several months there in those theaters of operation.

Right now you can really see how that fight is intensifying as the jets there, very much concentrating especially on the north of Syria, the

Mabiej (ph) area where of course those anti-ISIS forces are trying to cut off ISIS from the Syrian-Turkish border to make sure they can't replenish

their fighters, and then there's also Fallujah, which is really shaping up to be a tough and bloody battle there on the ground -- Kristie.

LU STOUT: The pressure and air power certainly being ramped up against ISIS. Fred Pleitgen reporting live from Crete, thank you, Fred.

You're watching News Stream, and still ahead: France is stepping up security for the Euro 2016 football championship. And we'll tell you what

measures they're putting into place.

Also ahead, the Japanese boy who went missing nearly a week has been released from hospital. We'll tell what you he had to say after his

ordeal.

(COMMERCIAL BREAK)

[08:17:24] LU STOUT: Coming to you live from Hong Kong, you're back watching News Stream.

We are just three days away from the start of the European football championships and security forces are on high alert across the host nation

France. There are serious concerns that terrorists could try to launch attacks while the games are on. Ukrainian security services say they

already foiled one plot. They arrested a Frenchman who say -- they say had acquired an arsenal of weapons and explosives.

Our senior international correspondent Jim Bittermann joins me now live from Paris,

And, Jim, Euro 2016 it kicks off at the end of the week. What kind of security plans are being put into place now?

JIM BITTERMANN, CNN INTERNATIONAL CORRESPONDENT: Well, we've seen a lot of them, Kristie. In fact, yesterday we saw them upgrade the security

out of this Stade de France. They're adding another 3,000 security agents out there plus another ring of security that's going to make it three rings

of security that's going to make it three rings of security taht you'll have to go through if you're a ticket holder to get into the Stade de

France and get to your seat.

So, a kind of a sign of nervousness on the part of the French authorities here as the days approach when this is all going to get under

way. And, of course, that arrest in the Ukraine yesterday did nothing to calm the fears here. There's been a great deal of anxiety about the

possibility of a terrorist attack during the game. It's a month long, spread out between ten stadiums in all parts of the

country. There's also ten fan zones that have to be kept under and secure. There's also hotels and practice grounds. So, there's a lot of things for

the security folks to worry about, 90,000 in all have been mobilized. And of course the question is all the time is that enough -- Kristie.

LU STOUT: Jim, definitely a lot of anxiety. I mean, security is certainly on the minds of many people ahead of Euro 2016.

So, among the organizers, are there concerns that fans won't be in the fan zones and there will be empty seats?

BITTERMANN: There's always that possibility. And we've heard anecdotal stories about tickets being put up on the internet for sale that

fans have -- are deciding not to come over or not come to France for the games.

There won't really be a sure sign of that until we see who shows up. But the fact is that it is the kind of thing that people would worry about,

but there's also other things going on including the transportation strikes and to some extent the floods, which may deter people from coming over. We

just saw a travel advisory for British citizens coming here.

It doesn't warn people to stay away, but it does outline all of the problems, including some problems up at Calais, and problems in other parts

of the country that want to -- that people might want to be thinking about as they come over for the games.

So a lot of kind of dissuasive things there that the French would like to overcome. This is very important to pull this off and pull it off well

is something that they really need to help improve their image, at least in terms of terrorism -- Kristie.

LU STOUT: Yeah, absolutely. And facing so many challenges like cleaning up after the floods, the immense challenge of securing itself to

avert another attack. And despite these challenges, is there still a sense of hope that this upcoming contest and that sport can be used to unify and

to bring people together?

[08:20:36] BITTERMANN: Well, it's always been the case that sport has brought people together. And I think that is certainly what the hope is

here. We we saw back when the World Cup in 1998, the coalition on the team that brought people together, that brought a mixture of ethnic groups together on the team, and throughout the

country afterwards there was a great feeling of spirit and of cooperation amongst various people that's gone away in the time since.

But nonetheless, there is that possibility that sport will bring people together. It has in the past, it certainly could this time. And

it's too early to be too negative about things.

The French are saying that normally this will take place in a good fashion. The key word there is normally, that's the word they use when

they are crossing their fingers and they're looking for wood to touch on -- Kristie.

LU STOUT: Yeah. Crossing my fingers indeed, too. Jim Bittermann reporting live from Paris. Thank you, Jim. Take care.

Now a British pedophile has been handed 22 life sentences in London after he pleaded guilty

to 71 child abuse offenses while in Southeast Asia. Now, police say the 30-year-old committed most of his crimes in a poor community in Malaysia

where he posed as a teacher preying on those who trusted him most. The youngest victim, believe it or not, a 6-month-old baby.

Now, he confessed to abusing almost 200 children on his blog that he published on the dark web. But how is that abuse of such magnitude, how

can that take place for so many years apparently undetected in Malaysia?

I posed that question to a Melissa Sasdaran of Lawyers for Liberty, a human rights group based in the country.

(BEGIN VIDEO CLIP)

MELISSA SASDARAN, LAWYERS FOR LIBERTY: It really raises a questions as to whether our authorities were really in the dark or was there a cover-

up of complaints, perhaps, you know, that were botched with the authorities. And it raises questions, why didn't our police, you know,

release a statement about it? Why weren't the public informed of it? Why were the victims and the homes or the church where these incidents, these

crimes took place, were kept a secret from us?

(END VIDEO CLIP)

LU STOUT: Now, turning now to Bangladesh where police there are investigating yet another

hacking death, this time a Hindu priest was killed.

Now, let's bring up some video -- video of police at the scene of the crime in southwest Bangladesh.

Our New Delhi bureau chief Ravi Agrawal has been following the story for us and he joins us now live. And Ravi, yet another hacking death in

Bangladesh, this time a Hindu priest. Why was he killed?

RAVI AGRAWAL, CNN NEW DELHI BUREAU CHIEF: Well, Kristie, the honest truth is we actually don't know. We don't have a motive. What we do know

is that this man's name was Ananda Gopal Gangly (ph). He was a 70-year-old Hindu priest. He was on his way to work this morning when he was stopped

by a group of assailants. They were armed and it appears that they hacked him to death. Police say that he almost decapitated when they found him.

There were no witnesses, but police are still sort of deconstructing what happened today by looking at that body.

What's unclear to us, though, is a sense of motive. This is a part of Bangladesh in the southwest where there haven't been that many crimes like

this before. The only thing that we do know is that the mode of killing, Kristie, brutal, using machetes, sharp knives, it puts it in line with the

spate of murders that we've been following in Bangladesh for the last 18 months.

LU STOUT: That's right. And there has been this chilling spate of, killings of secular activists, of bloggers, of intellectuals in the

country. Why does this continue to go on in Bangladesh?

AGRAWAL: Again, Kristie, the honest truth is we just don't know.

I was in Bangladesh recently and chatting with a number of government officials, with opposition party members, with analysts, terrorism experts

and none of them had a really clear answer as to who's responsible for these killings. We've had some of these killings benig claimed by the

likes of ISIS, even though the government denies that IS has a presence in Bangladesh.

Other fringe groups have also claimed some of these murders.

But what is strange, Kristie, is that these murders, which began last year with targeting high profile authors, bloggers, people who are

connected to the U.S. embassy, foreign journalists, really high profile targets. Now, in the last five or six weeks what we're seeing is that the

targets seem to be more random, spread out across the country, not high profile, some of them are religious minorities, but it's difficult to gauge

what exactly is going on and why.

[08:25:11] LU STOUT: And Ravi, separately, we've learned that two militants can killed in a shoot-out in Dhaka today. They were members of

the JMB, the Jamaat-ul-Mujahideen Bangladesh. What is it this group? What threat does it pose?

AGRAWAL: So, this is a group that is actually banned in Bangladesh. They're an Islamist group. They've been in existence for maybe about 15

years iB bangladesh, and this is a group whose stated objective is to replace the existing Bangladeshi regime, the

government, with its own regime that would impose sharia law across the country.

Now, the reports we've heard from the police is that in a shoot-out in Dhaka, two JMB militants were killed, some police officers injured as well.

And really if these JMB militants are senior figures then this would be a real boost for the government, which has come under a fair amount of

criticism, Kristie, over the last few months, for seemingly not doing enough to really put an end to the killings that have shaken Bangladesh,

have really sort of put all kinds of people -- bloggers, journalists, professors, at real unease in that country and dented the image of this

country abroad.

LU STOUT: Ravi Agrawal reporting live for us, thank you.

Now, the Japanese boy who went missing in the woods for nearly a week, he has been released

from the hospital today.

Now, police have also decided not to charge his parents, who say they left their son in the wilderness as a form of punishment.

Alexandra Field has the latest.

(BEGIN VIDEOTAPE)

ALEXANDRA FIELD, CNN CORRESPONDENT: It's finally time to go home for Yamato Tanooka, the 7-year-old boy lost in the woods for six days leaving

Japan's Makudate (ph) city hospital. He bravely says, he's OK.

Doctors treated him for signs of dehydration and malnutrition but they say he's in good condition for someone who survived for so long without

food.

Tanooka found shelter and water, but nothing to eat in an empty Japanese military base. 200 rescue workers and Japanese self-defense

forces searched for him after his father lift him on the side of a road, punishment for being naughty on a family trip, says the man who tells

police his son was throwing rocks at other cars and people.

The boy had disappeared by the time he returned. His father has apologized for what he says was meant to be a lesson.

TAKAYUKI TANOOKA, FATHER (through translator): I never thought the situation would end like this. I deeply regret my actions which were too

extreme.

FIELD: Police are not pursuing criminal charges against the Takayuki Tanooka father. He bowed deeply to doctors before taking his 7-year-old

home.

But social services will still investigate whether there was psychological abuse against a boy who says he's just eager to get back to

school.

Alexandra Field, CNN.

(END VIDEOTAPE)

LU STOUT: Nice to see him doing well.

You're watching News Stream. And still to come, economic tensions are high between the U.S. and China. We'll look at what U.S. officials are

saying about China's attitude towards foreign businesses.

And it is an exam so intense that the country shuts down factories and businesses near schools to make sure that the students aren't disturbed.

We've got more more on China's Gaokao, next.

(COMMERCIAL BREAK)

(HEADLINES)

[08:32:03] LU STOUT: Now U.S. and Chinese officials are wrapping up their annual talks and the talks came against the backdrop of rising

tension over the territorial dispute in the South China Sea.

Now, the U.S. Secretary of State John Kerry called on China to help find a diplomatic solution on an array of economic matters That was also

discussed.

Now, our Asia-Pacific editor Andrew Stevens has more on that side of the talks. He joins us

now live from Hong Kong.

And Andrew, did we get anything new out of these strategic talks?

ANDREW STEVENS, CNN ASIA-PACIFIC EDITOR: Well, we've just had a press conference from Jack Lew, the Treasury secretary, Kristie. And there was

what looks like at least something of a breakthrough. One of the big contentious issues going into these talks was

that China's -- or accusations that China is dumping steel on the world markets, it's keeping its own steel plants open at the expense of closing

others elsewhere in the world in the U.S. and Europe because they just can't compete against cheap Chinese steel.

Now, the Chinese have said that they are going to abide by an earlier they decision made, or an earlier they made in cutting back this excess

capacity. And Jack Lew said it was a strong agreement with the Chinese. And he also said that China was prepared to engage in talks with the OECD,

that the rich group of countries about a united front on cutting back the amount of steel available washing through the world at the moment.

So, there was a bit of a breakthrough there. But certainly on South China Sea, other bit issues like that, nothing really to speak of.

LU STOUT: And also today, Andrew, we know that Secretary Jack Lew said that there are concerns about doing business in China,. He said this,

quote, "concerns about the business climate have grown in recent years with foreign business confronting a more complex regulatory environment and

questioning how welcomed they are," unquote.

And Andrew, apparently there was more evidence of that out today?

STEVENS: Yes, absolutely, Kristie. I mean, those quotes from Jack Lew coming a little earlier, and lo and behold, the European Chamber of

Commerce coming out with a pretty devastating report surveying its members about what it's like to do business in China at the moment, and it is a

pretty pessimistic outlook, if you look at numbers.

Basically something like 40 percent of the companies surveyed, and there are more than 500 companies who were surveyed, saying that they are

going to be looking at pulling back, pulling back a bit in their expansion plans, which could possibly mean cutting jobs as well.

As you see, things like 56 -- more than one in two, says business is becoming more difficult, nearly three quarters say that they feel let

welcome in China than they did ten years ago. It's a long-running story and there has been constant complaints, not just from Europeans, but also

from the U.S., but obviously you look at numbers like that, certainly they are

feeling less and less loved there. And as China gets closer and closer to the international community, they are saying something has to

give. We can't keep operating like this, Krsitie.

LU STOUT: Now growing pessimism about doing business in China from the west.

Now, back to U.S./China ties and the strategic talks that just wrapped up. Another major point of contention between the nations is tension over

claims in the South China Sea.

Where does that stand now? What happens now?

STEVENS: Well, no further forward really. As you said earlier, John Kerry asking, pleading, for a diplomatic solution to this, and the Chinese

are saying that reasserting their right to sovereignty in the South China Sea.

They both agree that there should be freedom of navigation, there should be freedom of overflights, but China sort of says, well, this is our

sovereignty so obviously, that changes if it's ours it's not an international overflight, an international freedom of navigation.

So really no change there. The Chinese haven't shown any indication that they are prepared to back down on any of its expansion plans and the

South China Sea is, it's an enormous claim that they've made, it's angered, as we know, many, many of China's neighbors. The U.S. has sent warships

into contested areas, its sent military flights over the island, which have been created by China. But

at this stage, there has no change of China's strategy and certainly, Kristie, no indication that it could change anytime soon.

LU STOUT: Now, Andrew Stevens there reporting on the latest on very important ties between the u.S. and China. Thank you very much indeed,

Andrew.

Now, wild and deadly storms are leaving this incredible path of destruction across the east

coast of Australia and in some cases washing away entire backyards. Just take a look at this.

A powerful king tide dragged this swimming pool into the sea. This happened on Sydney's northern beaches.

And the erosion is remarkable. You can see from this drone footage the large swells have

literally eaten away at this famous coastline and we know three people have died, thousands have been evacuated as widespread flooding effects some

four states.

Now, imagine sitting through a two-day exam that could change the course of your life, and

even affect your family's future? I mean, that's what millions of students in China are going through right now. I'll tell you more about it, next.

(COMMERCAIL BREAK)

LU STOUT: Welcome back.

Now it was only a few years ago that Myanmar opened its doors to foreign investment and one of the world's biggest beer breweries decided to

tap into the market.

Now Heineken is proving to be a case study for those thinking of investing in the Asian nation by turning some unique challenges into

opportunities.

(BEGIN VIDEOTAPE)

LU STOUT: In 2013, the economy of Myanmar officially opened for business. For the first time in decades, foreign companies started to tap

into one of Asia's most isolated countries. Joining that race, international brewers.

LESTER TAN, MANAGING DIRECTOR, HEINEKEN MYANMAR: Myanmar is really the final frontier in Asia. It's attractive. It's got a large population,

50 million people, a young population. And these are all key components to a good beer growth story.

LU STOUT: In 2015, Heineken, the world's third largest brewer, invested in a $60 million brewery just outside of Yangon. This wasn't the

first time the company set up shop there.

20 years ago, Heineken had to leave Myanmar due to international sanctions. But times have

changed, and so has the thirst for the craft.

[08:40:08] SOBIR DJAFFAR, SALES DIRECTOR, HEINEKEN MYANMAR: In emerging markets like Myanmar, the beer choice was never there. I mean it

was always about one beer by default.

What we're trying to do differently, what we're trying to bring into this market, is the choice.

And to challenge dominance of the state-backed Myanmar brewery, Heineken has introduced a portfolio brands to the market, including Regal

7, a brew tailored to local tastes.

But entering an untapped market comes with is beer consumption in the country is one of the lowest in Asia.

DJAFFAR: This is a pretty much typical beer station, which is actually a biggest channel in the beer market in Myanmar.

So we have a lot of outlets like this, but not all of them are capable to invest enough or able

to invest enough into the assets. We are helping these guys to grow their outlets, to recruit more consumers.

LU STOUT: Building the retail infrastructure is one hurdle. Another, finding the right workforce.

DONALD OTTEN, SUPPLY CHAIN DIRECTOR, HEINEKEN MYANMAR: At the moment we are in one of the training rooms in the brewery. In total, we have

three, because if you are looking to a supply chain, around 90 percent has never had any experience in the brewing industry.

UNIDENTIFIED MALE: Does anybody know what that means, service charge?

LU STOUT: Heineken claims to have invested over $2,000 per person in training, all costs the company deems important to their regional strategy

establishing breweries in each country rather than creating a single export hub.

TAN: In the beer market, there are local nuances that we need to cater to in each individual

market. For many companies coming to Myanmar, they're -- we're here for the long-term. If you're looking for short-term immediate gains in this

market, it's the wrong approach to take.

(END VIDEOTAPE)

LU STOUT: You heard it from that one exec. for brewers, myanmar is the final frontier.

Now, in China, more than 9 million students are taking what is posibly the most intense exam of their lives. It is a two-day college entrance

test known as the Gaokao. It provokes everything from anxiety to sheer panic.

As you can see, there are indeed police on patrol in schools to make sure nothing disturbs the students. And strict measures are also in place

to keep students honest.

It is now a criminal offense to cheat during the Gaokao.

Now, an academic superstar is now a champion for the Chinese students. Stephen Hawking wished them success on Weibo, telling them, be fearless in

the pursuit of your aspirations and some students in China responded by asking for Hawkings help in the physics portion of the exam.

Now, we want to explain why the Gaokao is just so intense. Well, it covers a wide range of topics testing students on world history, science,

languages, politics and so on. And many of the questions essay answers.

And passing the Gaokao is the only way students can get into college and they believe nail down a good paying job.

Now, if you want to see if you can pass this test, just go to our website and there you will find it. You can take our mini Gaokao exam.

And that is News Stream. I'm Kristie Lu Stout. But don't go anywhere, World Sport with Christina Macfarlane is next.

END