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QUEST MEANS BUSINESS

British Student Sentenced to Life for "Spying" in UAE; Jeremy Hunt: U.K. will not Halt Weapons Sales to Saudi Arabia; Theresa May to Return to Brussels Ahead of EU Summit; Gibraltar Emerges as Sticking Point in Brexit Negotiations; Zuckerberg Tells CNN, He is not Stepping Down as Chairman of Facebook Amid Growing Calls for Him to Step Down; NHK: Nissan May Face Criminal Charges in Japan; Trump Thanks Saudi Arabia for Falling Oil Prices; Italy Faces Sanctions After EU Rejects its Budget; Tech Stocks Rebound as Facebook CEO Goes on Defensive; CNN's Matt Rivers Takes a Look Inside China's "Silicon Valley"; Market Rally Fades in Final Hour of Wall Street Trade. Aired 4-5p ET

Aired November 21, 2018 - 15:00   ET

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


PAULA NEWTON, CORRESPONDENT, CNN: Okay, so it is a decent bounce. Can we hang on? Join me all together then. This is what's driving the day on

Wednesday, November 21st.

Mark Zuckerberg tells CNN he's not planning to quit as Facebook chairman. Our exclusive interview with the man of the moment. Wall Street gives

thanks, yes, thanks, for an end to that stock market selling and Italy's budget gets blocked by Brussels. You'll hear Europe's economics

commissioner coming up.

I'm Paula Newton and this is "Quest Means Business."

Good evening, tonight, in a CNN business exclusive interview, Mark Zuckerberg says he has no plans to step down as Facebook chairman, Even as

his company faces a storm of criticism and of course a tumbling share price.

Zuckerberg and his Chief Operating Officer, Cheryl Sandberg have been under fire for their handling of multiple crisis everything from data privacy to

of course that election meddling. Tonight, he tells our Laurie Segall that he hopes to work with Sandberg for decades to come and as for his own

position as Chairman, he says he isn't going anywhere.

(BEGIN VIDEO CLIP)

LAURIE SEGALL, SENIOR TECHNOLOGY CORRESPONDENT, CNN: So you are not stepping down as Chairman.

MARK ZUCKERBERG, CEO AND CHAIRMAN, FACEBOOK: That's not the plan.

SEGALL: That's not the plan. Would anything change that?

ZUCKERBERG: I mean, like eventually over time. I mean, I'm not going to be doing this forever. But I certainly - I'm not currently thinking that

that makes sense.

(END VIDEO CLIP)

NEWTON: 2018 has been the most turbulent year of Facebook's short life. Now the last 12 months have brought accusations of aiding fake news and

Russian election meddling; headline grabbing security and privacy breaches, most notably involving UK data company, Cambridge Analytica; and in just

the last week, outrage, of course, after a child bride in South Sudan was auctioned off on his platform.

Facebook shares are up today, but down more than 20% for the year. Now with investors questioning the company's very future, Laurie Segall asked

Mark Zuckerberg if the future of his Chief Operating Officer Cheryl Sandberg is in jeopardy.

(BEGIN VIDEO TAPE)

ZUCKERBERG: Look Cheryl is a really important part of this company and is leading a lot of the efforts to address a lot of the biggest issues that we

have. So when you look at a lot of the progress that we've made over the last 12 to 18 months on issues around elections or content or security, Cheryl is

leading a lot of that work and she's been an important partner for me for ten years and I'm really proud of the work that we've done together and I

hope that we work together for decades more to come.

SEGALL; But will that role change at all? Are you going to make any changes, not even looking at this crisis, but looking at a lot of the

different ones over the last year, are you making any changes in your top leadership? I know there's been a lot of folks who have left. Many people

say Facebook as it was has gotten to this point, but it needs a new leadership team to get to the next point, what kind of changes are you

going to make?

ZUCKERBERG: Well, if you look at the management team at the end of 2018, it's quite different from what it was at the beginning of the year. On the

product and engineering side, I completely restructured things so now we have a group that's focused on all the apps that we have. We have extra

focus on security and a lot of the infrastructure that we're trying to build and that reflects the issues that we're facing in the world.

On the business side, a lot of the team has turned over. We have new folks in place. We just hired Nick Clegg, the former Deputy Prime Minister of

Britain to come in and run all of our global affairs and policy, so he's certainly going to bring a fresh and outside perspective to the work that

we're doing there, and we've also gotten new leaders in places like partnerships and marketing and comms and a number of these really important

areas as well. So I think we're leaving this year with a much stronger team in place.

SEGALL: You are CEO, you get this question all the time, but I've got to ask you all the time because it's always in the news, but you are CEO and

Chairman of Facebook. That's an extraordinary amount of power given that you rule a kingdom of two billion people digitally essentially, shouldn't

your power be checked?

ZUCKERBERG: Yes. I think that ultimately the issues that we're working on here, you know, things like preventing interference in elections from other

countries, finding the balance between giving people a voice and keeping people safe, these are not issues that any one company can address, right,

so when I talk about addressing these, I always talk about how we need to partner with governments around the world and other companies and

nonprofits and other sectors.

So, yes, I don't think fundamentally that we're going to be able to address all these issues by ourselves. They're too big for society.

SEGALL: So you're not stepping down as Chairman?

ZUCKERBERG: That's not the plan.

SEGALL: That's not the plan.

[15:05:10]

SEGALL: Would anything change that?

ZUCKERBERG: I mean - eventually, over time. I mean, I'm not going to be doing this forever, but I certainly - I'm not currently thinking that that

makes sense.

SEGALL: This idea of transparency is important and we keep hearing it, but then you have these reports coming out that say something otherwise. So,

you know - how, and I guess I ask it again, how do you ensure that you do win back public trust? I think this is an incredibly pivotal point for the

company and for you as a leader, because it certainly seems over the last year, we haven't stopped hearing about, you know, one thing after the next

that shows otherwise that the company hasn't been as transparent.

ZUCKERBERG: Yes, well, look, there are always going to be issues. But if you're serving a community of more than two billion people, there's going

to be someone who is posting something that is problematic, that gets through the systems that we have in place no matter how advanced the

systems are.

We, are unfortunately in the position where you have these foreign nation- state adversaries who are actively using sophisticated attempts to try to interfere and do different things. So I don't think that the right

expectation is that there aren't going to be issues. I think the question is how do we address them?

At the same time, I do think that there is a bigger picture at play, which is what we believe in in the world is giving everyone a voice, giving

everyone the ability to share their experience and connect with the people who they want. And I think by and large a lot of the criticism around the

biggest issues has been fair, but I do think that if we're going to be real, there is this bigger picture as well, which is that we have a

different world view than some of the folks who are covering this and --

SEGALL: But if we've given the world a voice, look at what's happened in the last year? You've had elections in the last year, the election was

manipulated, hate speech that's gone viral and turned offline. It certainly seems like this mission has been accomplished in many ways and

there's a whole new set of problems that, perhaps, you guys didn't foresee and now we're in a very complicated place where there's not an easy

solution.

ZUCKERBERG: Yes, these are complex issues that you can't fix. You manage them on an ongoing basis, but, look, do you think that the world is better

with everyone having a voice and having the ability to express their opinion and being able to connect to who they want? I don't think we're

going back to a world where there were just a handful of gatekeepers who got to control what ideas got expressed and even if we could --

SEGALL: But Facebook is a new gatekeeper.

ZUCKERBERG: I'm trying to make it so we're not. I mean, that's why I'm making it so that we're building this independent governance mechanisms and

things like that are really important and that's work that I really care about. But I think that the world will keep on moving in this direction.

People will - more people will keep on getting a voice. I think that that's good, and I think there is certainly going to be issues that we need

to work through over time, but I think that while we are doing that, we can't lose sight of all of the really positive things that are happening

here as well.

Not just in terms of communities and people being able to connect with groups that are really meaningful to them whether it's around a disease or

community around veterans that they wouldn't be able to connect to otherwise, but even if you just think about the economic impact of what

we're doing.

You know, we serve 80 million small businesses around the world. About half of them have told us that they're hiring people because of using our

tools and that without Facebook and the tools that we provide that their business would be significantly smaller and they wouldn't be hiring as many

people as they are.

So a study came out, the US economy added about 4.5 million jobs over the last year. If you just look at like what people are telling us, the small

businesses who use our tools, we've directly been able to contribute to creating many more jobs than that across the world.

So I think that this is the power of giving people a voice, giving small businesses, giving communities and giving everyone everywhere the ability

to connect with the people who they care about and get their opinion across and giving everyday people the power that previously only big companies

would have had.

So the world is going to go more in that direction and I think by and large that's a good thing. So I'm really proud of the work we're doing on this.

There are big issues and I'm not trying to say that there aren't, that we need to work through, but I do think that sometimes you can get the flavor

from a lot of this - from some of the coverage that -that that's all there is and I don't think that that's right either.

We need to make sure that we address these questions. These are really big and important things for the future of our society and the future of

internet, but we also need to keep pushing in the direction of empowering more people because that's good.

[15:10:09 ]

SEGALL: I mean, it certainly seems like we all know Facebook has done great things. If we look at, you know - and I think the last couple years

is where we're grappling with the unintended consequences. And I think there is a lot of weight to that. It's not just media coverage.

After Cambridge Analytica, you made some strong statements that you said the buck stops with you, so you're ultimately responsible. So what

message does it send to employees or investors or the public that no one in Facebook C-suite has been held accountable in what's been you could argue a

year of crisis?

ZUCKERBERG: Well, I'm not sure what you mean by no one has been held accountable.

SEGALL: Well, have you had --

ZUCKERBERG: If you meant haven't publicly blamed someone else, I mean, that's just not the kind of person I am.

SEGALL; Or have people lost their jobs? Have people lost their jobs?

ZUCKERBERG: On an ongoing basis, I manage performance inside the company. I mean that's not - this isn't like, okay, an issue comes up I'm going to

publicly go blame someone. I don't think that that's the right way to be, but yeah, my job on an ongoing basis is to make sure we have the best team

that is going to be able to address the challenges that we face and the challenges evolve over time.

So I mean, you've seen us do a big reorganization of how our product efforts worked to be able to really focus on all the apps and to focus even

more on security because of some of the issues that we're grappling with that needs to be a bigger focus and on the business side, we've changed a

lot of the leaders.

So, I think that it's pretty difficult to look at the team and the way we're organized at the end of 2018 and to say it is the same as the

beginning of the year.

(END VIDEO TAPE)

NEWTON: And Laurie Segall joins us now. Thank you so much. It is quite an exclusive look inside, really, his head right now and where he's at.

You know, I could be completely wrong, Laurie. I look at that interview and I think, great, he's very forthcoming at the same time he does look

tired. He does look rattled. You've known him for many, many years.

In terms of just that whole perspective, where is his head at right now?

SEGALL: You know, it's funny because there was a report that come out that said he talked to his colleagues and said we're at war right now because

everybody is kind of looking at Facebook with a critical eye and they are dealing with adversaries and nation-states trying to manipulate democracy.

And I think that's a mindset that's inside of Facebook, but also when you look at that interview, you've got to remember, the last time I interviewed

Mark Zuckerberg, he said this to me. It was during the Cambridge Analytica scandal, he said, "I hate doing these, I know I have to do more," and I

think - of course he has to do more. He is the CEO of a company with two billion users and I think he is trying to be more public facing. He's a

very behind the scenes kind of guy. It's not second nature for him to do these things but that's not really an excuse.

I think he's really trying to learn how to communicate, ironically being the CEO of Facebook, he's trying to learn how to communicate, I think

better and be more forthcoming because I think a lot of folks are wondering if they can trust Facebook.

NEWTON: All right, and he's still the leader. He's still --

SEGALL: Yes.

NEWTON: Very much associated with being the trust factor in that organization. I was so interested in the fact that, you know, he said to

you, these are complex issues that you can't fix. You have to manage them. I mean, is he trying to say that, look, it's like cars, right? We all have

cars in the road, they're as safe as they can be and they're regulated, but we still have accidents, people still die in car accidents because that's

going to be a big shift in thinking if he wants people to get there.

SEGALL: And I think that's what Facebook wants. I think Facebook wants people to understand that whether it's Russian interference or another - or

if it's in China, that this is going to be a problem and that this is something that is inevitable because this is a platform. It's like - cars

or the telephone or radio and all of this type of thing and I think that's a shift in mindset and hard for people to grapple with given that Facebook

was really slow to get on top of it and has made too many apologies and not gotten in front of it.

But I do think they're trying to shift the public perception of Facebook as thinking they're going to get on top of it. He says it many, many times.

This is an ongoing war.

NEWTON: In terms of him trying to fight this battle, this is really his - one of his first salvos, this sit-down with you. This isn't just a sit

down. You spent a lot of time at Facebook in the last few weeks. What's it like kind of inside and then them really trying to get outside of their

bubble to understand what all this criticism is about because I have to be honest, Laurie, looking at your interview, I still don't think he quite

gets it.

SEGALL: Yes, I think folks when they look at it sometimes think, there needs to be more humility. I think if you look at Facebook. Maybe the

tech industry in general over the last decade, there's been quite a bit of hubris. We are moving fast and breaking things, Facebook's old motto. We

are changing the world, we're making it better, more open and connected and then now, we're in this really complicated time in this era of unintended

consequences.

And I think Facebook has suffered. Spending some time there, you know, it's not like these are bad people who want to do bad things. There are a

lot of engineers and a lot of folks working at this company who really believe in connecting the whole world.

But I think, you know, there has been a blind spot and there's been a very big blind spot for humanity and understanding the bad things people will do

on these platforms and I think that's something that Facebook is grappling with.

[15:15:04]

SEGALL: I don't think they got there quick enough. And I think that's something, if anything, they suffer from being in their own filter bubble,

where people on the outside think one thing. You'll hear Facebook and folks at Facebook say that we really do great things, we connect small

businesses, we do all this, we help people grow their companies, we're connecting people around the world and you want to say, of course, people

know that.

But, you know, we're in a really unique and scary time with this platform that has gone for so long unregulated without the right structure around it

to help protect democracy and help protect our mental health. That's a big question of, is Facebook even good for our brains, and our minds and our

children.

And so, I think it's a complicated time and I think they've got to burst their filter bubble quite a bit in order to take it on.

NEWTON: Yes, it's an evolutionary process and we still don't know actually if they have enough time to get their hands around it yet. A lot more

controversy to come. You, as I said, have been spending weeks and weeks. It's not just a sit-down interview and this is one exclusive, but Laurie

has others. Her new series, "The Human Code," she sits down with the most influential leaders in Silicon Valley talking about technology and as

Laurie was just saying right now, how it affects our lives. We want everyone to check it out at cnnbusiness.com.

Now switching gears here, you can bet investors are giving thanks for tomorrow's Thanksgiving holiday in the US. Not everybody needs that

breather. The S&P 500 is having its worst fourth quarter since 2008.

Up next, a look at today's very ever so light touch really on Wall Street.

Hey, it's not the biggest of rallies, but, hey, we'll take what we can get. US stocks are trying to find their way back in positive territory one day

before America's Thanksgiving holiday. You see it there. Not quite as high as it was earlier but still up a good half percentage points. Shares

are recovering from what we noted here was a brutal two day selloff.

The Dow though still in negative territory for the year, ever so slightly. Investors are looking at those latest US jobless claims. They climbed to a

four and a half month high of 224,000 and that's adding to worries about growth. Mark Grant is the chief global strategist at investment bank B.

Riley FBR, he is in the warm sunny climate of Fort Lauderdale, Florida, I'm not even going to bother to tell you how cold it is going to be in New York

tomorrow, but oh, well, I am not sure if this will mimic the mood on the market or not.

[15:20:05]

NEWTON: Listen, Mark, you've got to tell us, everybody --

MARK GRANT, CHIEF GLOBAL STRATEGIST, INVESTMENT BANK B. RILEY FBR: It's about 80 here, Paula.

NEWTON: I know, don't rub it in. Seriously, you had to go there, didn't you? So, listen, everybody wants to know is this the bottom because people

there - were some bargain hunters in there, but you know as well as I do, its not like the major players were coming in for a buying fest today.

GRANT: No, I don't think we're at the bottom. I think, as a matter of fact, and I'm without question a very conservative investor. You've got to

wait and see in here. One day's bounce does not make a bottom and we have a number of both national and international themes, if you will, that are

seriously affecting the markets now.

NEWTON: When we talk about those international themes, I notice you're kind of really have your eyes on the Fed and you hope that, you know, Jay

Powell's recent comments that perhaps they're not going to be as hawkish in 2019, you hope they're listening, why? Because some people would say,

"Look, historically when you look at interest rates, they're not that high."

GRANT: Well, historically they're not, but it depends on how far you want to go back. The truth is for the last ten years since the Lehman

bankruptcy, we've had low interest rates and we've had very good reason for doing that which has been trying to climb out of the debacle that was

created by the financial crisis of 2008 and 2009.

We also had the four major central banks of the world create an economy, if you will, that was just the size of the United States GDP right around $21

trillion, that because it's a free cash flow economy, it's around $100 trillion to $120 trillion and so we're trying to climb out of this hole.

The United States Congress and the President have done everything they can in terms of tax cuts and cutting back on regulations to grow the economy.

The Federal Reserve was created by the Federal Reserve Act of 1913. It was created by Congress and the notion that a Congressman, a Senator, the

President shouldn't be able to hold up their hand and say, "One moment, please," is ridiculous. They're independent. They can make their own

judgments. They're elected for 14-year offices.

NEWTON: Okay, but Mark, but they're looking at data and it's a Fed committee at the end of the day, it's not just one guy. What do you see

that should worry us that Jay Powell clearly doesn't and the committee, I might add?

GRANT: Jay Powell and the FOMC committee keep talking about a return to normalcy. My point is that we've had no normalcy for ten years. We have

low inflation. We have good numbers on unemployment and why should they keep rocking the boat by raising and raising interest rates

I make this point, the country's debt, the United States' debt is about $21 trillion, every point or 1% that they raise the interest rates means that

we have to pay - the United States' citizens have to pay another $210 billion and I don't see any point in this and I think they're making a

tremendous mistake that could drive us back into a recession.

NEWTON: And I have to go here, mark, and I will leave you to your sunny Thanksgiving, but your point is the Fed could still screw this up, you

think?

GRANT: That's correct. That's my point.

NEWTON: Got you, Mark, enjoy that sunshine, enjoy your Thanksgiving and we'll see you on the other end.

GRANT: Thank you. Happy Thanksgiving.

NEWTON: Thank you very much. We'll see you on the other end. See if these markets can actually crawl out of this at this time. Mark,

appreciate it. Now a global economic watch dog is out with a new warning.

The Organization for Economic Cooperation and Development says growth is past its peak. The OECD keeps an eye on many of the world's richest

economies so I asked the Chief Economist, Laurence Boone if she sees any of those risks of inflation, especially in Europe in the near future.

(BEGIN VIDEO TAPE)

LAURENCE BOONE, CHIEF ECONOMIST, ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT: What we're seeing is really growth has peaked and looking

ahead and also because tension on budgeting, but also because the support that was provided by monetary and budgetary stimulus is fading throughout

2019 and a little more in 2020. What we are projecting is a soft landing.

Growth should go at a global level from 3.7 to 3.5 which is still pretty healthy.

NEWTON: You know, there's an ongoing debate even now in Europe about austerity budgets versus growth, where does the OECD come in at that point?

What do you advice?

BOONE: So as long as growth continues at a brisk pace that I have just been discussing with you, our advice is build up for the good time, look to

the medium term when you use the budget, please do that for investing in the future and also targeting the poorest population.

[15:25:10]

BOONE: Now, if something, some of those risks were to materialize, if we had a more significant slowdown than what we are projecting at the moment,

then our advice is for government to get around the table and coordinate a budgetary stimulus at the global or European level depending on where it

happens.

NEWTON: I was really interested in the forecast as it pertains to China. You definitely see growth slowing there, but interesting as well, you point

out that the shipping traffic growth at container ports, you say, it's 80% really of all that trade, that the growth will fall to below 3% when it was

6% in 2017. This is a leading indicator as far as you're concerned, right? The fact that those trade disputes are really having an impact on the

global economy.

BOONE: Well, that's right. We really worry about trade. You were mentioning content airport traffic. Let me just give you one number. It

has slowed so much that they're about - that there will be about 25 million less containers that we could have had if it had to continue to grow at the

same pace as the one we were observing last year. That's a big, big number.

NEWTON: It certainly is. And as I said, when you look at it as a leading indicator, it definitely would raise alarm. The other point I wanted to

make on Brexit, you say no matter what, soft Brexit, hard Brexit, it doesn't matter, it will impact growth in the UK at least in the short-term?

BOONE: So what we are assuming in this projection is actually a soft Brexit, that the agreement that's on the table goes through, that the

negotiation will end up happily with a transition period until the end of 2020, but what we have observed is that investment has slowed already and

it's obviously taking a toll on trend growth.

Now conversely, if there was to be a hard Brexit, which is a possibility even if it's not our central scenario, then the UK as it stands is supposed

to grow by about 2.5% accumulated over the next two years, such a shock would make it down to 0.5% only. So that would take a bigger toll.

(END VIDEO TAPE)

NEWTON: US President Trump has warm words for Saudi Arabia when it comes to oil. We discuss what his strategy is when we come back.

[15:30:00]

(COMMERCIAL BREAK)

[15:30:00] PAULA NEWTON, HOST, QUEST MEANS BUSINESS: Hello, I'm Paula Newton, coming up in the next half hour of QUEST MEANS BUSINESS, Europe's

Economic Commissioner tells me why he can't let Italy have its own way on its budget. And we'll take a tour of one of China's busiest gadget markets

where ordinary tech entrepreneurs are trying to take on the big boys.

First though, these are the headlines on Cnn at this hour. The UAE's Attorney General says the life sentence handed to a British PHD student can

be appealed. Matthew Hedges was found guilty of being a British spy, a charge both he and the British government strongly deny. He was jailed

after a hearing that lasted just five minutes.

Britain's top diplomat is warning the UAE, there will be consequences. British Foreign Secretary Jeremy Hunt says the U.K. will not end arm sales

to Saudi Arabia. He says that would mean Britain's leverage in efforts to end the war in Yemen would be in his words reduced to zero.

Saudi Arabia is a key player in the war supporting Yemen's government against Houthi rebels. Now, in the past few minutes, British Prime

Minister Theresa May said she'll return to Brussels for more talks Saturday. Her meeting today with European Union President Jean-Claude

Juncker didn't really reach a deal on Britain's future relationship with the EU.

In addition, a tiny British territory of Gibraltar at the southern tip of Spain has become a sticking point in Brexit negotiations. And Spain is

threatening a veto over the issue.

In an exclusive interview with Cnn, Facebook CEO Mark Zuckerberg said he is not planning to step down as chairman and threw his support behind COO

Cheryl Sandberg despite recent calls from investors to shake-up management. Shares of Facebook have been down more than 20 percent this year.

Prosecutors in Tokyo are considering bringing criminal charges against Nissan Motors, that's according to NHK; Japan's public service broadcaster.

Now, the news comes after two days -- two days after the arrest of Nissan Chairman Carlos Ghosn on suspicion of underreporting his earnings and other

financial misconduct. Nissan did not comment on the report.

Donald Trump has thanked Saudi Arabia for the recent fall in oil prices after he signaled he was going to keep backing that government despite the

killing of Jamal Khashoggi. Now, oil prices are recovering from heavy selling on Tuesday and Brent is now up more than 2 percent.

As you can see there, though, as our current chart shows, it's essentially flat, never a dull moment on oil commodities. Oil prices are getting --

this is from his tweet, "oil prices are getting lower. Great! A big tax cut for America and the world. Thank you, Saudi Arabia, but let's go

lower!"

Instructions directly from the president. Now earlier, I asked our emerging markets editor John Defterios what might be the president's end

game when it comes to the price of oil.

(BEGIN VIDEO CLIP)

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: He's basically suggesting he's going to get political cover to Mohammad bin Salman; the Crown Prince

of Saudi Arabia, wants to get $450 billion of military contracts overtime, and it wants to lower oil price as the bonus for giving Saudi Arabia

blanket coverage here going forward.

Two members of the OPEC community actually sent me that tweet via WhatsAPP with the signals of alarm because this puts undue pressure, Paula, on Halid

al-Falih; who is the Minister of Energy of Saudi Arabia. Remember a week ago, Monday, it was here in Abu Dhabi, we had him on a panel and he

declared it was necessary to take a million barrels a day off the market.

Half of that was going to come from Saudi Arabia itself. One source told me a u-turn would be absolutely catastrophic here for OPEC and non-OPEC in

this alliance they developed two and a half years ago. They even say it's not even good for the oil and gas patch in the United States.

Before OPEC and non-OPEC players intervened, Paula, between 2015 and '16, they had the unemployment rate at just over 8 percent. After 2016 going

into 2017, the oil patch saw the unemployment rate cut in half to 4 percent. Donald Trump has something completely else in mind and that's the

pump for his base, but nothing else I candidly find quite surprising.

[15:35:00] NEWTON: Yes, the clash of the economics and the politics, so this is extraordinary. You're teeing up that very contentious OPEC meeting

quite well. You know, we're used to the tweets from Donald Trump, but how else does he disrupt things?

DEFTERIOS: You know, it's extraordinary here because right now, the momentum is working against the OPEC producers and even Russia because we

had so much intervention coming from Donald Trump. First and foremost, one source said to me we had no idea he was going to give eight exemptions to

Iran.

So that's added at least another million to 1.4 million barrels a day and for the next few months, he has a trade dispute with China. And this could

dampen growth in 2019. China is a major importer of oil, so we could see the surplus growing when it comes to China.

And we cannot forget, Paula, U.S. shale production is booming. Overall, U.S. output last year climbed by 2 million barrels a day, expectations are

in 2019, they're going to add another 1.5. It's like adding a UAE or a Kuwait to the market every single year.

So this is going to keep that downward pressure on prices going forward, I think.

(END VIDEO CLIP)

NEWTON: OK, a budget showdown between the EU and Italy, I know what you're thinking, it's happened before, not this way. Brussels accuses Rome of

breaking the rules. We ask an EU Commissioner if the rules can change.

(COMMERCIAL BREAK)

NEWTON: Italy could face sanctions after the EU officially rejected its budget. Now, Brussels is unhappy with how much the government in Rome

wants to spend trying to revive its economy. But the populist who are now in power are digging in, saying a new approach is needed. The Vice

President of the EU Commission says that approach breaks the rules.

(BEGIN VIDEO CLIP)

VALDIS DOMBROVSKIS, VICE PRESIDENT, EUROPEAN COMMISSION FOR THE EURO: Let me stress the situation in Italy is of common concern. Euro-area

countries are in the same team and should be playing by the same rules. These rules are here to protect us, to provide certainty, stability and

mutual trust.

(END VIDEO CLIP)

NEWTON: The rules, we keep hearing about the rules. European Economics Commissioner Pierre Moscovici says he does have sympathy for the Italians,

but the budget rules are there for a reason. I asked him if he accepted that people in Italy voted for a very different approach to the economy.

(BEGIN VIDEO CLIP)

[15:40:00] PIERRE MOSCOVICI, EUROPEAN COMMISSIONER FOR ECONOMIC & FINANCIAL AFFAIRS: I do not dispute the legitimacy of this government or

the feeling of the Italian people. But I'm there not as bureaucrat, as a political appointee and somebody who is obeying to rule of law, and to

make sure that the common discipline that, again, each and every member state has implemented already is respected by all.

Because if everybody acts as a free rider, you're not any more a union. You're not any more a group. You don't have a single currency and, well,

of course, I think about the Italian people and I think they will be the victims of some mistakes because if public debt raises again, they will pay

the price.

But I'm also responsible for the rest of the Eurozone and, you know, saying that, it's not the commission versus Italy. It's also all the member

states, all the finance ministers, all the heads of governments who are telling the Italian government, well, OK, we fully understand that you

want to fight poverty, we fully understand that you need to invest more in infrastructure.

But you must not do that against the common discipline and with too much increasing of your debt because a public debt in Italy is already 130

percent of GDP which is way too much and this is why --

NEWTON: But some say --

MOSCOVICI: The press attends --

(CROSSTALK)

There are two things --

NEWTON: But some say it's an extraordinary circumstance in Italy, and many people turn to Greece and see the problems that are there as well, saying

that Greece is basically doomed, that it will be years after years of absolutely tepid growth.

From listening to you and I know the rules are the rules, but you know that politically, the government can frame this as you wanting to make an

example of Italy.

MOSCOVICI: No, it's not an example because this has been done by -- again, every member state. We are a rules-based system belonging to the Euro area

implies that these rules are implemented. And it's just what takes us together, it's like the constitution in the United States, which is

something which is very sacred, you need to follow it.

And these rules have not been invented by us, the commission, they've been adopted by all the parliaments, all the governments in the Europe, the

commitments have been taken by all the Italian governments and we do not invent them.

So we need to act with as well the comprehension of what the country needs. And I know the circumstances, I know the needs of the Italian economy, we

love Italy, we want Italy to stay at the corridor(ph) of the Eurozone, but also with the general interest of Europe as a whole of the Eurozone as a

whole.

And my role here is not to interpret the text, it's to make sure that they are respected, but again, I do that with a clear spirit of dialogue. We

have not taken today any kind of disciplinary decision. We have not opened what we call excess deficit procedure.

We have launched a process which could get there, so the ball is clearly in the camp of the Italian --

NEWTON: So --

MOSCOVICI: And my door is --

NEWTON: So you're open to more negotiations --

MOSCOVICI: Open to any kind of meetings --

NEWTON: This is not a final --

MOSCOVICI: With them.

NEWTON: So you're open to more negotiations, and this is not a final declaration --

MOSCOVICI: No --

NEWTON: On a financial measure?

MOSCOVICI: I wouldn't say negotiations, I would say dialogue because we need to understand each other. Again, I understand the fact that -- I know

that there are very many people who are poor in Italy and they need to see something coming from the government.

I welcome the fact that there is a plan for poverty. I don't know if it's this one, but it's necessary. I know that there's a lack of infrastructure

investment, but what I say is that you could do that without damaging your structural deficit, without increasing your public debt.

It's just a matter of political choices, we've done that. We are doing that for our families, we are doing that for national states, we are doing

that for our local authorities. We are doing that in our firms, we cannot spend on each and everything we like, so we need to have choices. We made

our choices and that's why we're here.

(END VIDEO CLIP)

NEWTON: Give us some issue there, as you can see being very politically sensitive knowing that the populist government was elected in Italy. He

was also parsing his words, I followed up and asked him about Brexit and whether or not Spain could actually veto this deal.

We're going to bring you this news because Theresa May as we were telling you earlier, will head back to Brussels on that Brexit deal on Saturday.

Spain is still saying, look, the whole issue of Gibraltar remains in dispute. Pierre Moscovici telling me earlier that, look, we are not

negotiating with Spain and the U.K. over Gibraltar.

That's not what this is. We will sit down at the table and really, he says, refine what is in the deal. OK, off to European markets. They

closed sharply higher Wednesday with shares in Germany leading that region. Airbus jumped 2 percent as the aerospace giant has named Dominik

Asam CFO and Michael Schollhorn, COO in the company's latest major management shake-up.

[15:45:00] Up next here on QUEST MEANS BUSINESS, we'll hear from Mark Zuckerberg on his vision for Facebook.

(COMMERCIAL BREAK)

NEWTON: On the day Mark Zuckerberg told Cnn, he is not going anywhere as company chairman, Facebook has been the best performing FANG stocks so far

today. You know, it's still and I think the right home, we were considering this the slide, but the Nasdaq looks at to snap a three-day

slide, it's up better than 1 percent today.

Although, the rally I have to tell you has faded in the last few minutes. Now, combined, the FANG stocks have lost $1 trillion in value during this

very volatile market. Amid this turbulence, Laurie Segall asked Mark Zuckerberg whether recent events had made him reflect on his own

leadership.

(BEGIN VIDEO CLIP)

LAURIE SEGALL, CNN CORRESPONDENT: Have you as a leader looked at yourself in the last year and reflected and made some hard challenging changes

because you look on the outside and there are a lot of people questioning your leadership, questioning this company.

Have you personally changed in any capacity to be able to be better equipped to handle Facebook now rather than the Facebook that you built in

your dorm room?

MARK ZUCKERBERG, CHAIRMAN & CHIEF EXECUTIVE OFFICER, FACEBOOK: Absolutely, I mean, I'm always thinking about the stuff, and I think the biggest

learning for me, which I'm too slow to, is that when you connect 2.5 billion people, you're going to see all the good that they're capable of,

and incredible things.

But you're also going to have all these people who just try to use those tools to subvert the same ideals that we care about. And now, you know,

we're taking that lens towards everything that we're doing and not only trying to build the good to empower people to give more people a voice, but

in everything that we do, we're working to make sure that those tools can't be misused.

And I think that's something that we're going to come out of this episode - - this series of challenges that we're dealing with, and this will be baked into the DNA of the company of how we operate.

(END VIDEO CLIP)

NEWTON: Baked into the DNA of the company. Samuel Burke joins us now live from London, he's going to tell us what that means in a minute. But

Samuel, stay right there because we did speak with former U.S. Labor Secretary Robert Reich, he told us that for these giants, obviously

including Facebook, data is power.

(BEGIN VIDEO CLIP)

[15:50:00] ROBERT REICH, FORMER SECRETARY OF LABOR, UNITED STATES: What these other high tech companies are doing is they are actually resting

their power on their ability to aggregate huge amounts of data, analyze those data in ways that no smaller company can possibly do and also at the

same time to develop networks that everybody has to join in order to participate.

And that is a recipe for larger and larger economic and also political power.

(END VIDEO CLIP)

NEWTON: And for many, that's a recipe for regulation, Samuel, look, it's an extreme position that the secretary has. He's saying break-up Facebook

and others like them.

But at this point, Europe has already tried to regulate this space. What have we learned and I know that you've really taken a hard look at what

Europe is trying to do and what it's already done?

SAMUEL BURKE, CNN BUSINESS & TECHNOLOGY CORRESPONDENT: Well, it's interesting because you could make the argument that Google collects much

more data from many more platforms than Facebook does. But I think at the end of the day, you could definitely find an appetite for breaking up

Facebook here in Europe.

I was in the European parliament in Brussels the day that Mark Zuckerberg testified, and that was handled so poorly by many people that many of the

people walked away there, many of the most important people in Europe, walked away there, saying exactly that, that they would be willing to at

least look into breaking up Facebook.

At the end of the day, we can only go by what Europe has done already, and that's GDPR, that data protection law, that has really set the standard for

Europe to have the reins of technology to be the police of technology. So I think they've set themselves up very well if they want to go down that

route, Paula.

NEWTON: And you know, I want to get to the business case, Facebook in a moment. But I can't let you go without talking about what you've covered

the last few days, and this was the sale of this poor child bride in South Sudan. It was an auction that happened on Facebook, it wasn't taken down

for two weeks.

I mean, can regulation stop that, and if it didn't stop that, would the kind of regulation you may see punish Facebook for not taking it down more

quickly?

BURKE: Well, before the regulation punishes them, I think the market is already punishing them. And now, I don't want to exaggerate and think that

this terrible case about the Sudanese girl being sold has actually moved the entire market.

But at the end of the day, what I hear from investors is that they believe if enough of these cases happen, which I think many of them think -- enough

have already happened, that Facebook will focus its attention on privacy and regulating itself more than looking at the ads, and that's really what

investors want.

So at the end of the day, the market may push this faster --

NEWTON: OK --

BURKE: Than regulation does.

NEWTON: And in terms of the market pushing this, the business case for Facebook, some people say we've reached peak social, that it wasn't for

Instagram, Facebook wouldn't be doing nearly as well as it's doing. Samuel, at the end of the day, there still is subscriber growth here,

though. I don't see people abandoning their Facebook accounts?

BURKE: Yes, there's a little bit of growth though in the United States, we started to see those numbers wane. But I think an important point to look

at is some numbers that a lot of analysts have been looking at as well as investors that came up from "Axios" a few days ago.

And basically, what it showed if you ask people -- if you asked them last year, do you think social media helps democracy or hurts democracy and free

speech. People overwhelmingly said yes, in 2017, 53 percent said it helped. Those numbers have plummeted now, Paula.

Now 57 percent of people say it hurts, you may be right that people aren't deleting their Facebook accounts, but if there's enough of this sentiment

that people are checking it much less often, which we are seeing that reflected in the numbers, that is what's making investors nervous.

There could be this icky feeling that just grows and grows and grows, Facebook isn't able to stop it and that's eventually not the deleting of

the accounts just not being on it as frequently, not as many eyeballs looking at the ads on Facebook, and that could be what does Facebook in.

That's part of the reason we're seeing the stock price the way it is in the past few weeks.

NEWTON: Yes, it's going to be so interesting to see the way that rolls out. Now, I said it before to you, Samuel, my children are not on

Facebook, don't like it, don't know what it is, don't have anything on about it --

BURKE: We can barely get you on Facebook.

NEWTON: Just like -- what do you mean barely?

(CROSSTALK)

BURKE: That came from you --

NEWTON: I am not on Facebook, we all know this, we've been through this. I would say happy -- have a happy Thanksgiving, but you're here back with

us tomorrow, so all that. Now top White House --

BURKE: I'll be here --

NEWTON: Top White House adviser Larry Kudlow says he anticipates a direct confrontation between the U.S. and China over trade when they meet at next

week's G20 Summit. And a significant asset of that dispute is tech. All this week, we're looking at how it's become the new battleground between

the two countries with the rise of China's own Silicon Valley Shenzhen. Cnn's Matt Rivers brings us more.

(BEGIN VIDEOTAPE)

MATT RIVERS, CNN CORRESPONDENT (voice-over): They say imitation is the most sincere form of flattery, and in China, it can also be a form of

innovation. Take one look around Huaqiangbei and you'll see what I mean. In a city that produces most of the world's consumer electronics, this

shopping district is its heart.

A wholesale market where vendors sell any and every type of tech component you can imagine.

UNIDENTIFIED MALE: These guys are selling sensors --

RIVERS: Most are parts you and I wouldn't even begin to recognize, but this man does. Andrew Huang, who goes by the name bunny is a self-

described hardware hacker who knows this place inside and out.

[15:55:00] ANDREW HUANG, AUTHOR: It's like a web market, like you go to a stall to buy pork or you go to --

RIVERS (on camera): Right --

HUANG: A stall to buy vegetable --

RIVERS: Yes --

HUANG: And so each of these will specialize in some particular trade of some particular component.

RIVER (voice-over): Any sort of consumer electronic you can dream of. A tablet, a drone could probably be built here from scratch. Today, bunny is

going to start with just one smartphone. He buys parts from a number of stalls. To me, all this is daunting, the domain of the MIT graduate, but

to people here, it's just a Monday.

HUANG: In the west, sort of tech is data-fied(ph), it's almost like --

RIVERS (on camera): Yes --

HUANG: A priesthood of tech --

RIVERS: Yes --

HUANG: Here, it's an everyday thing here. It's not scary to take something apart.

RIVERS (voice-over): That's another thing people do here, take things apart. Once you do that, you know how it was produced and then you might

just say, come up with a better or cheaper way to make that very same thing. Some call that copycatting or at the very least trademark

infringement. Here it's open source innovation.

HUANG: So what happens, you come up with an idea and someone copies it. But usually, they don't do just a straight copy, they'll add their little

improvement to it. But fair game is fair, you take their improvement and now you can take their improvement and you can improve upon that.

RIVERS (on camera): And figuring out what makes your competition's product tick, is easy. Bunny shows us that very Chinese concept in the most

American of places.

HUANG: Well, some parts and --

RIVERS: Yes --

HUANG: Well, you fuel up and build up.

(LAUGHTER)

RIVERS: It takes a bit of trial and error. Snaps together --

HUANG: It snaps together like that, so that's --

RIVERS: But before too long --

HUANG: Using this coin here --

RIVERS (voice-over): We've got a working smartphone, selfies and all. Imitation, innovation, whatever you call it, there is ingenuity here. So

come on down to Huaqiangbei market with your next big hardware idea, just don't expect someone not to copy it. Matt Rivers, Cnn, Shenzhen.

(END VIDEOTAPE)

NEWTON: Wall Street may be getting some pre-Thanksgiving cheer. We'll give you an update after the break.

(COMMERCIAL BREAK)

NEWTON: OK, the last few minutes of trade on Wall Street and while investors do need to be thankful here that there was no big selloff, but

look at that. That rally is fading a bit in the last hours of trade. Now all indices are still up as investors took advantage of those markets

weaknesses to kind of do bargain hunting.

Tech shares especially had a turnaround after recovering from those selloffs. But the Dow as you can see there, well off its highs of the

day. The Nasdaq still up more than 1 percent. U.S. markets, I remind everyone here, will be closed Thursday for the Thanksgiving Day holiday and

it's a half day on Friday.

I will be here tomorrow, I will be here on Friday, this is QUEST MEANS BUSINESS, I am Paula Newton and the closing bell is ringing there on Wall

Street, taking us into that Thanksgiving holiday. "THE LEAD" with Jake Tapper is next.

(BELL RINGING)

END