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NEWS STREAM

U.S.: Kim Jong-un is begging for war; Putin calls for dialogue, saying sanctions won't work; World leaders mull next step on North Korea; Tense lifestyle in Korean DMZ; U.S. calls for strongest possible sanctions; CNN: Trump to end program protecting Dreamers; Caribbean Islands brace for Hurricane Irma. Aired 8-8:30a ET

Aired September 05, 2017 - 08:00   ET

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


[08:00:00] (COMMERCIAL BREAK)

KRISTIE LU STOUT, CNN ANCHOR: I'm Kristie Lu Stout in Seoul and welcome to the special edition of News Stream.

(BEGIN VIDEO CLIP)

LU STOUT: Could Pyongyang be preparing for another missile launch when a South Korean lawmaker tells CNN an ICBM appears to be on the move?

Now tensions are escalating, we speak to the villagers who live light on North Korea's door step. And a tour of nuclear bunker that's up for sale

in Japan where homeowners are considering all precautions.

(END VIDEO CLIP)

LU STOUT: Looks like global condemnation is doing little to slow down North Korea's military ambitions.

(BEGIN VIDEO CLIP)

LU STOUT: A South Korean lawmaker tells us, intelligence shows the North is moving a ballistic missiles suggesting a new test is on the way.

South Korean warships carried out a live fire drill, the second day of military action after the north claimed to successfully tested a hydrogen

bomb.

The U.S. has agreed to increase the pay load of South Korean missiles. Meanwhile, at the U.N., the U.S. ambassador called for the strongest

possible sanctions on North Korea saying that Kim Jong-un is quote, begging for war. The leaders in Russia and China wrapped up a meeting with other

BRICS nations.

(END VIDEO CLIP)

LU STOUT: We have got our CNN's Matt Rivers in Beijing, Jill Dougherty standing by in Moscow. Let's go to, Jill, first.

And Jill, closing up that conference in Xiamen, Putin addressed the issue of North Korea and he call the sanctions useless and ineffective, why is he

dismissing sanctions and what is he proposing instead?

JILL DOUGHERTY, CNN CORRESPONDENT: Well, he thinks the sanctions simply won't work and the reason at least to the outline today is the mentality of

the North.

He brought the example of Saddam Hussein and he said remember when Saddam Hussein essentially he would argue was set up with allegations of weapons

of mass destruction.

And then he was brought down and he died in the process, and what he's saying is look, we all remember that certainly this is something that Putin

has talked about for a long time, and the North Koreans remember that, and understand it, too.

And then until they really feel secure and secure from attack by the United States, they're not going to do anything. Let's listen to the sound that

he said is quote, about that specifically.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): they will -- they will eat grass but they will not turn away from the path that will

provide for their security. What will restore their security, restoration of international law.

We should -- we should aim toward dialogue from all sides. We should aim toward -- that all participants, including North Koreans, will not have any

threat of their destruction.

(END VIDEO CLIP)

DOUGHERTY: So now the president of Russia is not saying that the North Koreans are carrying out or have a legal right to be doing what they're

doing.

On the contrary, he's condemning it, Russia has condemned it and he said it's very provocative but on the other hand, what he is talking about is

what he would say is actions, military threats coming from the United States.

Although he didn't specifically mentioned President Donald Trump or the United States but military threats which he believes are destabilizing and

shouldn't be used. Kristie.

LU STOUT: Got it. So the Russian president calling out for dialogue instead of what he sees and destabilizing moves. Now let's cross over to

Matt Rivers standing by in Beijing.

And Matt, Vladimir Putin address North Korea and Xiamen today but we didn't here from the host of the Summit. We did not hear from Chinese President

Xi Jinping. So where does China stand on the issue of the stopping new strong sanctions against North Korea?

[08:05:00] MATT RIVERS, CNN CORRESPONDENT: I think generally speaking, the Chinese are going to be against really levying the kind of sanctions that

countries like South Korea and the United States and Japan want levied as a result of that six nuclear test.

What China argues is that look, we've already done enough. Consider what we have done just this year alone. We've been imports of North Korean

seafood to China. We have been imports of coal. We have been imports of iron ore. We have done things that will hurt the North Korean regime to

the tune of a billion U.S. dollars a year according to U.N. estimates.

And China says look, were already doing enough and it believes that the United States needs to be doing more and so to the end, President Xi

Jinping did not address North Korea specifically at the closing remarks that he gave at the BRICS Summit currently being held in Xiamen in Port

City on the East Coast of China.

But he did talk in a not so veiled way about the United States. Let's play you a little bit of what the president said.

(BEGIN VIDEO CLIP)

XI JINPING, PRESIDENT OF CHINA (through translator): Multilateral trade negotiations are making progress only with great difficulty and the

implementation of the Paris agreement has met with resistance. Some countries have become more inward looking and their desire to participate

in global development cooperation has decreased.

(END VIDEO CLIP)

RIVERS: I thought he's clearly talking about there is the United States and specifically we can infer that the President Donald Trump's tweets

suggesting that perhaps the United States would call off all trade with any country that themselves choose to trade with North Korea.

Most experts would call that a bluff but clearly China is not in favor of anything like that and it feels that the United States is not doing enough

with his inward looking stance as if as China's government puts it to solve this tense situation on the Korean Peninsula. Kristie.

LU STOUT: All right, Matt Rivers. Let's cross back to Jill Dougherty standing by in Moscow. And Jill, before I let you to go, I want to ask

about that Xi meeting that's coming up tomorrow. It's not about stock, it's this economic forum.

We know that the Russian president will be there. He will be there along with the South Korean President Moon Jae-in. We know where stands on the

issue of North Korea.

It wants dialogue, South Korea, the key ally of the GLA the United States. Do you think Russia will be able to somehow convince South Korea to embrace

more of its dialogue approach?

DOUGHERTY: I think it will be difficult because the Russian and the Chinese position to join position is what they're calling freeze-freeze,

what they say is look, we can have a deal where the North Koreans stop the testing of nuclear weapons.

And the United States would stop military exercises with its allies such as South Korea in that part of the world but if South Korea has faced with the

potential of an attack from the North, it seems now very likely that they want -- would want to suddenly say will stop any type of exercises.

In fact, look what South Korea is doing today. Exercises that are even more serious, so I don't think that will get very far that said, this push

toward dialogue is really something that I think a lot of countries would like to do ultimately. But the fear right now is that it's not possible

under these very tense circumstances.

LU STOUT: Yes, very interesting at push for dialogue is something that Russia wants, is what China wants, is what even some elements here in Korea

wants as well. Jill Dougherty joining us live from Moscow, Matt Rivers, live in Beijing, a big thank you to you both.

Now our next guest played a key role in implementing south Korea's policy of engagement with the North during the last decade.

Moon Chung-in is from the special advisor to the South Korean president and he joins us now. Mister Moon, welcome back to CNN and thank you for joining

us.

First, I need to ask you about the alliance. The alliance searching U.S. and South Korea dated back seven decades. It has been tested by North

Korea. Where does the alliance stand now?

MOON CHUNG-IN, SPECIAL ADVISER, SOUTH KOREAN PRESIDENT: The South Korea- U.S. alliance remains strong and cohesive. For example today, President Moon Jae-in has a telephone conversation with President Trump for 40

minutes.

They refund the collective actions, cooperation and coordination, if I don't see any (Inaudible), the sanction within the alliance system.

LU STOUT: You say that the alliance is strong but it has been tested by President Trump. President Trump sent tweet, criticizing South Korea's

appeasement -- a talk of appeasement. He's also told South Korea to go pay for THAAD by itself.

There's also report that Donald Trump is considering ending the free trade agreement with South Korea. How did South Korea do with that and doesn't

that under cut the alliance?

CHUNG-IN: South Korea has said somewhat disappointed by President Trump's tweets and the whole issue over policy of appeasement. South Korea has

never taken any policy of appeasement.

[08:10:00] South Korea has taken side with United States 100 percent since the inauguration of President Trump. Therefore we do not understand how

and why President Trump would come up with that kind of tweet.

LU STOUT: Another factor that's challenging the relationship, domestic politics and domestic forces here inside South Korea. We do have a new

liberal government empowered here in South Korea. Are there more calls growing for embracing engagement with North Korea?

CHUNG-IN: Yes.

LU STOUT: Very different from what the U.S. wants.

CHUNG-IN: That's true. President Moon is a product of candlelight rallies.

LU STOUT: Yes.

CHUNG-IN: And the candlelight people have a strong desire to have a peaceful settlement of North Korean nuclear issue. From President Moon,

it's he's kind of sandwich by this liberal progress desire from South Korea and American handling the policy.

LU STOUT: Yes.

CHUNG-IN: Really, President Moon has been agonizing all of these sandwich dilemma.

LU STOUT: So he's in the sandwich dilemma which faces (Inaudible) put forward when he meets with the Russian tomorrow and must talk.

We know that Mister Putin says no sanctions, stop the military provocations. We should focus on dialogue. Will the South Korean

president agree?

CHUNG-IN: President Moon Jae-in maybe clear today in his interview with a Russian official news agency cast and he said that he would like to pursue

(Inaudible) North Korea in what forms. Therefore he wanted to speak to his earlier position that (Inaudible) approach.

LU STOUT: Yes.

CHUNG-IN: Dialogue on the one hand and sanctions in crisis and on the other hand, he believes that he can (Inaudible) -- the countries can

reconciled these two country key approaches.

LU STOUT: Yes. And that's something that Donald Trump doesn't want to hear.

CHUNG-IN: I hope not.

LU STOUT: Now we have news that this potential new ICMB test that's going to take place perhaps as early as this weekend. Why does this keep

happening? What can deter, what could stop North Korea?

CHUNG-IN: Dialogue, recognition -- tell you what North Korea wants that I would be very hard for the U.S. to come forward in the direction.

LU STOUT: We'll have to see if that direction is the way forward, if that's going to happen. Again, that's not what the Trump the

administration wants.

CHUNG-IN: I hope so. I hope the President Trump would come up with more corrective attitude to the North Korea in such a way to set the North Korea

nuclear issue peacefully.

LU STOUT: All right, Moon Chung-in, top presidential adviser to the South Korean President, many thanks indeed for joining us and the program.

CHUNG-IN: Thank you.

LU STOUT: Take care. Now, keep it here. You're News Stream it is a lifestyle built with curfews, check points, a custom broad propaganda but

for the people who live in Korea's militarized zone is also home. Paula Hancocks has more on the new level of tension in one small village.

(BEGIN VIDEO CLIP)

PAULA HANCOCKS, CNN CORRESPONDENT: It's a class in the local village school. Today it's all about making felt bags. This seem could be

anywhere in the world but just so happens to be on North Korea's door step.

Daeseong is the only South Korean village within the DMZ, the demilitarized zone between North and South Korea. North Korea is just about 500 meters

away from this village. Its closest point and so residents would really been any increase in tension far more that anybody in the rest of the

country.

And another thing they have to deal with 24 hours a day it's going to (Inaudible) is the propaganda broadcast coming from North Korea. All of

the (Inaudible) have special sign and very thick walls to try and get them some kind of a spike in the 24/7 broadcast.

A hundred and ninety-seven people live in Daeseong, also known as Freedom Village, mostly farmers who the South Korean military escort every time

they go to their fields, one step too far and they're in the north.

Very few residents want to talk on camera saying the situation is too tense. Cho Young-sook who runs the one restaurant in the village tells me

this the most concern she's been in 38 years of living here.

CHO YOUNG-SOOK, RESTAURANT OWNER (through translator): Although the North was threatening Guam, she says, we still see this as quite negative. We

lock our doors at night now which we never did before.

HANCOCKS: Only resident are allowed in, check points in the night with curfew at midnight, part of the daily routine. As our regular evacuation

drills to the shelter soaked with blast masks as emergency supplies.

The propaganda war between the two Koreas is not (Inaudible) here increasing the size of their threat holes over the years, North Korea's

currently in the lead with a pole of 165 meters.

There have been two abductions of Daeseong residents by North Korea soldiers over past decades but no one is thinking of leaving and it's the

soldiers, the mines, the incessant propaganda music. This is still home.

(END VIDEOTAPE)

[08:15:00] LU STOUT: And that was Paula Hancocks reporting and we will be speaking with you shortly here in the South Korean capital.

Now meanwhile, the lives as 800,000 people in the U.S. could be have turned upside down and President Trump ended immigration policy that protects them

from deportation. We will just have a closer look at the decision that did remove people from the country they called home.

Also ahead, Puerto Rico and a string of Caribbean islands are now under hurricane warning and just ahead people are preparing for a very powerful

and possibly very dangerous category five storm.

(COMMERCIAL BREAK)

LU STOUT: Welcome back to this special edition of News Stream. We are live from Seoul. It's the rift between North Korea and the international

community deepens.

But Pyongyang apparently determined to advance its nuclear capabilities and I as mentioned, the U.S. ambassador to the U.N. is calling for the

strongest possible sanctions against North Korea.

Let's bring in our Pentagon Correspondent Barbara Starr for more. And Barbara, Nikki Haley, the U.S. Ambassador to the U.N., we heard her calling

for only the strongest sanctions. Does that reflect the entire administrations approach North Korea to exert maximum pressure?

BARBARA STARR, CNN CORRESPONDENT: Well right now, really is maximum pressure on the diplomatic side -- the sanctions side and she reflected

that but she wanted did go on and say that North Korea in her words appears to be begging for war.

And this is something that were constantly hearing from U.S. administration officials. This trade-off of we don't want war. We want sanctions. We

want diplomacy to work but also warning that there are viable military options on the table.

President Trump continuing to say all auctions are on the table. So this is an effort to really try and ensure that the messages delivered to Kim

Jong-un that the U.S. does have military options and might actually be willing to use them in certain circumstances.

You know the conventional wisdom has always been that the U.S. would not because it might provoke a counterattack against South Korea. So I think

what you're seeing is the message is being pushed on several fronts now.

LU STOUT: Got it. And Barbara, this -- the latest nuclear test and appears some additional ICBM test, there a lot of concerns about safety and

protection in Japan and South Korea. What can the U.S. do to protect and to shield these nations from potential attack?

STARR: Well, if you're talking about a missile being launch by North Korea, this has been a long-standing program for U.S. missile defenses.

The U.S. has multiple layers for defending against North Korean missiles air, land and sea. And they also -- they also have increased cooperation

and increase missile defenses with both Japan and South Korea.

[08:20:00] South Korea just yesterday saying it would accept additional THAAD U.S. missile defenses on its territory. The Japanese coming out and

saying they were going to be THAAD missile defenses.

So very much again a multi pronged approach. Is missile-defense perfect? No. But it is the best they have right now to try and position themselves

to demonstrate to North Korea that they do have the ability to shoot down an incoming North Korean missile. Kristie.

LU STOUT: Barbara Starr, live from the Pentagon. Thank you. Now in the coming hours, the Trump administration is expected to announce that it will

end an immigration policy that could affect hundred of thousands of people living in the United States. Supporters of that policy protested and said

will U.S. cities on Monday. Joe Johns has more.

(BEGIN VIDEO CLIP)

JOE JOHNS, CNN CORRESPONDENT: President Trump taking to Twitter Monday night touting a big week ahead. A gross understatement considering the

wide range of issues on the president's plate, starting with today's announcement on the fate of so-called Dreamers.

The president is expected to end the Obama era program created through executive order protecting some 800,000 young undocumented immigrants from

being deported, this possibility already drawing backlash from both sides of the aisle.

REP. MIKE COFFMAN (R), COLORADO: I hope the president says tomorrow is that he supports the policy of the DACA program and once Congress to pass

it a law.

SEN. BERNIE SANDERS, U.S. INDEPENDENT: To end the DACA program is one of the most cruel and ugly decisions ever made in the modern history of this

country by a president.

JOHNS: But the president promised during the campaign that he would end protections for Dreamers. Attorneys generally from 10 states threatened to

sue if Trump does not announce repeal of the policy by today.

Sources tell CNN the president punt the fate of Dreamers to Congress, delaying the enforcement for six months so that lawmakers can pass

legislation to address the status of those affected.

REP. ADAM KINZINGER (R), ILLINOIS: There's a lot of Republican support for a program like this. I'm not as pessimistic as some people. I think we

can actually get this done in the next six months.

JOHNS: The New York Times is reporting that President Trump has asked aides for a way out, comparing Trump's approach on Dreamers to President

Obama's first promise as president to close Guant namo Bay, which he was not able to accomplish.

Congress returns today to a daunting to do list with a limited timeframe to get anything done. The most challenging tasks include passing a spending

bill with or without money for a border wall.

Republicans looking for complete overhaul of the tax code, the first in three in decades. Emergency funding for victims of Hurricane Harvey, a

bill to raise the debt ceiling is expected and possibly another try at repealing Obamacare.

(END VIDEOTAPE)

LU STOUT: CNN's Joe John's reporting from Washington. Now across the United States, millions of people are from clinging out from or preparing

for a series of natural disaster. Inspectors from the Environmental Protection Agency have arrive in Texas.

They're checking out any damage and toxic waste sites flooded in Hurricane Harvey. And on the West Coast, firefighters finally have the upper hand

against the largest wildfire in L.A. history, rain and moderating temperatures have helped them gain control.

But right now all eyes on another monster hurricane as Irma barrels across the Caribbean. People are emptying store shelves. They're sacking up on

generators and batteries, South Florida also bracing for a possible landfall there. Our meteorologist Chad Myers has the latest on Irma's path

and its power, and Chad, what should we expect for this one?

CHAD MYERS, CNN METEOROLOGIST: I think we are going to see some very disturbing pictures out of Anguilla, Saint Maarten, maybe the U.S. Virgin

Islands, the BVI.

The storm now is 280 kilometers per hour. It is a buzz saw looking storm. It really just looks to me like a Western Pacific typhoon. Rarely do we

get a storm that's this round. Round means is breathing.

The air is coming out of the eye and through all the way around the storm getting stronger and stronger, and the core, the eye wall, if it goes over

your island or any island that you care about with loved ones, they need to be in the strongest place possible.

Probably above about 4 meters high above sea level because that maybe the storm surge, storm surge is maybe 5 meters high on these islands here in

Anguilla, the British Virgin Islands, St. Kitts, and Antigua this is the area that is going to see the strongest surge possible.

And I -- I think it's 3 meters but it's going to be higher than that. This has been a category four or five for a very long time.

That's just the National Hurricane Center's forecast. There is the eye itself. Let's move it ahead right over the islands here and if you get the

island -- the eyes to truly your island.

[08:25:00] That's where the strongest winds are, 280 right there for about 5 miles wide, about 8 kilometers wide as were that wind is there. Now you

get away from it even -- even 30 kilometers. Your winds are only going to be about 150 kilometers per hour.

So it's that eye wall that truly will do all the damage here. You know to Jost Van Dyke to Peter Island right there in the BVI, then finally, to the

north of Puerto Rico and very close to the DR in Haiti.

Something is going to go on here at the Dominican Republic, is the mountainous areas that we have here. Very high mountains almost -- let me

think about this. I think it was somewhere in the neighborhood of 4000 meters high.

So as the air circulates around, spins around, that rain will develop and really ran those mountain tops and we have a flash flooding possible there.

That same story, there are some higher elevations here in Cuba that may tear this storm up but even as it approaches South Florida and maybe even

Eastern Florida.

I'm not sure yet where the storm goes. It is going to absolutely turn. Will it turn before it gets to Florida in two central and southern Florida,

Miami-Dade or does it get in the Gulf of Mexico and get stronger, and hit the west coast of Florida?

That still five days out, so we don't exactly know whether that is going to be one side of the storm, one side of the eye or the other side of the eye.

But certainly Floridians are taking care, Turks and Caicos, the Bahamas and Cuba, certainly in the way of a very dangerous, what we call category five

storm, what you would know on the western side of the Pacific as a super Typhoon.

LU STOUT: Yes, this is a very, very dangerous from (Inaudible), just minimal casualties. We thank you for the forecast and for you reporting.

Chad Myers, take care.

You're watching News Stream, coming to you live from Seoul and when we come back, the latest on top new story. The stand off over North Korea, how the

U.S. and South Korea are joining forces to contain the military threat and a Japanese builder business is booming as whether from the North renews the

demand from bomb shelters. Stay with us.

(COMMERCIAL BREAK)

LU STOUT: This is Kristie Lu Stout in Seoul, you're watching News Stream. And there are your world headlines.

(BEGIN VIDEO CLIP)

LU STOUT: South Korean warships perform a live fire drill and response to the North's latest nuclear test. And South Korean lawmaker tells us that

intelligence shows the North is moving a ballistic missile, suggesting a new test is on his way.

United Nations official in Bangladesh says clashes between Myanmar's military and local militants have force nearly 125,000 Rohingya Muslims to

flee across the border.

Most of them arrived in the below Beirut. And to say another 30,000 Rohingyas are trapped in Myanmar right now without access to food, water or

medicine.

Hurricane Irma has strengthened into a category five stork. That is the most powerful category. Warnings are out across the Caribbean islands, and

people are stocking up on food, batteries, generators. Still it's not clear where the storm will go, but it could reach the U.S. state of Florida this

weekend.

The duke and duchess of Cambridge have won their lawsuit against French journalist. The court is ordering fine of up to $60,000 dollars for each of

the six defendants, believing Catherine had been seeking over one-half million dollars damages. The French magazine Closer published photos of

Catherine sunbathing topless.

Let's return to our top news story this hour, the stand up in North Korea. Paula Hancocks joins me now for more on the story. Paula, let's talk about

what happened this morning. Another day, another live fire drill this time by the South Korean navy. What happened and what was the show of force,

this additional one, all about?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, it's interesting that you have two in three days brought by (ph) the South Koreans. This was

a joint show of force with the U.S. which is clearly what South Koreans would like. What we saw at this point, it was the navy. They had, like,

2,500-ton frigate. They had guided missile ships. It was very visual. The exact same thing that we saw yesterday. It's very visual. They want North

Korea to be able to see this.

They said they had a good (INAUDIBLE) actually which was really reminiscent of what you hear from North Korea saying, wherever it is, on or underwater,

if North Korea provokes, we will immediately destroy them and bury them at sea. This rhetoric is strong. This is South Korea trying to show a stronger

hands on North Korea. Yesterday, it also happened. They have a willingness to destroy the leadership if need be.

LU STOUT: Yes, very traumatic rhetoric there. And coming from Seoul, not from Pyongyang. This time yesterday, we were talking about -- what was

looking like the gap in the relationship between South Korea and U.S. We are waiting for -- is this phone call going to take place between the South

Korean president and U.S. president? Few hours later, that phone call did happen. Where does the alliance send now? (ph) How are the U.S. and South

Korea pledging to work together to exert pressure on North Korea?

HANCOCKS: If you look at the readouts from the Blue House and the White House, the South Korea and U.S. respectively, they are on the same page.

They are both saying let's use maximum pressure, let's use everything at our disposal in order to bring North Korea into line, but of course we know

that that is not necessarily the case.

We had White House -- senior White House official telling CNN that President Trump is frustrated with Moon Jae-in because he feels that he is

a bit too soft on North Korea. So we know that there is a gap in that relationship. Certainly the military alliance is strong as it ever been.

But when it comes to the two leaders, even KCNA say (INAUDIBLE) mentioned that, you know, it may not be as close as normal.

LU STOUT: So we've seen a more muscular South Korea Moon Jae-in with a show of force, with this -- we are talking about just lifting the restrictions

on how powerful ballistic missiles can be in South Korea, the U.S. and South Korea agreeing on that. But we have this meeting happening tomorrow

between the Russian president as well as South Korea President Moon Jae-in.

The Russian president is promoting dialogue. What kind of face the South Korea is going to purport? Are they going to say, well, we kind of want

dialogue too?

HANCOCKS: President Moon wants dialogue. He always want a dialogue. His policy hasn't changed for many, many years when he was chief of staff of a

president who orchestrated a sunshine policy. He wants dialogue with North Korea. He believes that is the (INAUDIBLE). Now he has become a little

stronger in his rhetoric, stronger in ordering the military to have the show of force possibly to placate America, to be on Washington side.

But the fact is it would be interesting. You left to be a fly on the wall (ph) because they effectively have the same song. We just heard as well

that there has been an interview (ph) between Moon Jae-in and (INAUDIBLE) in Russia. And he said yes, I would like to talk, but now is not the right

time. So he hasn't changed. He still wants to talk.

LU STOUT: That's the meeting to watch next. Paula Hancocks watching it all for us. Thank you so much. Take care.

Now, sales of a nuclear bomb shelters are growing in Japan as the threat of North Korea's missiles and a possible nuclear attack arose. CNN's Kyung Lah

tells us how the fiery rhetoric between U.S. President Donald Trump and Kim Jong-un is fueling those fears.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): Down this skyline staircase, through an airlocked steel door, Inchiro Nishimoto (ph) welcomes us into

his insurancea against Kim Jong-un and Donald Trump.

LAH: Tell me what we're sitting in.

"A shelter against nuclear fallout; 55 years ago when I started selling shelters in Japan, people thought I was crazy," he says.

"Who's crazy now?" he asks.

As North Korea edges closer to a long-range missile capable of hitting the U.S., America's new president engaging in a war of words with Kim Jong-un.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They will be met with fire and fury

[08:35:00] like the world has never seen.

LAH (voice-over): Japan caught in the crosshairs of any conflict. In Trump's first six month as president, Nishimoto (ph) has sold more than a

dozen of his tropical-themed, concrete-fortified shelters. While that's not a lot, that's more than he sold in 55 years. Housing developer Kazumi

Yoshiyama (ph) wants in.

LAH: Are customers asking for this?

KAZUMI YOSHIYAMA (PH), HOUSING DEVELOPER: Yes.

LAH: How many of these are you thinking of building?

YOSHIYAMA (PH): Maybe 100 homes.

LAH (voice-over): It may not seem as ridiculous as it sounds. In a suburban neighborhood in Wakayama, Japan, nestled behind this traditional Japanese

home.

LAH: What is this made out of?

UNIDENTIFIED MALE: Concrete.

LAH: Concrete. So three layers of reinforced concrete right here.

LAH (voice-over): Yoshihiko Kuratori (ph) bought this small shelter, fearing earthquake, tsunami, and the neighbor to his north.

YOSHIHIKO KURATORI (PH), SHELTER OWNER: I always worry about the nuclear by North Korea.

LAH: Having the shelter, does it give you peace of mind?

KURATORI (PH): That's right. I feel very peaceful in my mind.

LAH (voice-over): Selling that personal peace in these shelters that range from tens to hundreds of thousands of dollars. But you won't hear Nishimoto

(ph) celebrate the windfall.

"Trump's extreme rhetoric has heightened tensions with North Korea," he says.

"You don't know what he is going to do next. It's good if it goes well but if it doesn't, it could lead to a national disaster."

Go ahead and say they're prepping for the impossible. But for a region watching two unpredictable leaders, they call it just being realistic.

Kyung Lah, CNN, Osaka, Japan.

(END VIDEOTAPE)

LU STOUT: Now, the tiny Southeast Asia nation of Brunei is topping into the tourism industry using its treasure trove of shipwrecks off its shores

which boosts its economy. I am able to take a closer look at a country that sees its own potential after the break.

(COMMERCIAL BREAK)

LU STOUT: Welcome back. The tiny Southeast Asia country of Brunei is trying to transform its economy. Now, in it's fifth year recession, the oil-rich

sultanate wants to diversify by boosting tourism and hopes to get a boost from the ASEAN market.

(BEGIN VIDEOTAPE)

LU STOUT: The warm waters of Southeast Asia. Famous the world over for scuba diving. But these divers aren't in the Philippines, Malaysia, or even

Indonesia. They are in Brunei.

WONG THYE SING, FOUNDER, PONI DIVERS: People that come to Brunei, they always think it's like the rest of Southeast Asia, which is a lot of rich

diving. So they were surprised to know that -- just a lot wrecks. We got over 30 wrecks. We got (INAUDIBLE) wrecks.

LU STOUT: Wrecks barely explored until now. Thirty-three-year-old Wong Thye Sing started Poni Divers in 2009, because back then, virtually no one knew

about the diving in Brunei.

SING: Southeast Asia is the diving capital of world.

[08:40:00] And Brunei is not sort of known to be part of that. So you got that sort of mystery factor a little bit, so that's kind of nice.

LU STOUT: To demystify his country's shipwrecks, Wong hired (INAUDIBLE), a Malaysian artist to sketch them. It's a way to both map the dive site and

boost Brunei's profile to diving destination. Today, Wong says the company certifies around 400 divers a year. Most foreign divers coming from nearby

countries.

SING: Southeast Asia is our backyard that would be the most important market for us.

LU STOUT: Due to falling global oil prices and finite resources, Brunei is trying to diversify its economy by ramping up its tourism sector. Key to

the initiative, marketing the country's ecology from mangroves to untouched rainforests as well as leveraging Brunei's religious and cultural assets.

In 2016, the country welcomed 218,000 tourists. More than half of them came from Southeast Asia. By 2020, the government says it wants to double that

total.

WARDI HAJI MOHAMMAD ALI, DEPUTY PERMANENT SECRETARY, MINISTRY OF PRIMARY RESOURCES AND TOURISM: Actually Brunei have a lot of potentials. It's just

we are very, very secretive. We would like people to come and discover themselves our beautiful country.

LU STOUT: One challenge to that might be the country's image. In 2013, the sultan of Brunei announced the roll out of Islamic Penal Code that drew

international criticism for its harsh punishments. Western celebrities boycotted the Beverly Hills Hotel near Los Angeles owned by the sultan. And

human rights groups labeled the move medieval. One of Brunei's tourism heads told CNN that he does not see this law to touring visitors.

ALI: This is a free country. We are very rich in our culture. We also practice our Islam (INAUDIBLE), but I don't see there is any problem for

people to choose Brunei.

LU STOUT: Bandar Seri Begawan. The city started as a water village. Settlement like this one. In the early 1900s, Brunei was forever

transformed by the discovery of oil and other countries trying to expand its contracting economy by welcoming visitors (INAUDIBLE).

(END VIDEOTAPE)

LU STOUT: And that is "News Stream" live from Seoul. We will have more from the South Korean capital tomorrow. I'm Kristie Lu Stout, but don't go

anywhere. "World Sport" with Amanda Davies is next.

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[08:45:00] (WORLD SPORT)

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