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China Proposes Controversial Hong King Security Law; Hong Kong Stocks Drop as Beijing Pushes for New Security Law; Unemployment Aid Exceed Normal Salary for Some; Floodwaters Recede Leaving Destruction in Michigan; Memorial Day Weekend Traveling Could Bring Risks. Aired 4:30-5a ET

Aired May 22, 2020 - 04:30   ET

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

[04:30:00]

ANNA COREN, CNN ANCHOR: Welcome back to our viewers in the United States and around the world. I'm Anna Coren. You are watching CNN NEWSROOM.

Well, China is moving to pass a controversial security law aimed at Hong Kong. It's under consideration right now at China's highly choreographed National People's Congress. The law aims to ban actions that China considers to be sedition, succession and subversion of the central government in Beijing. The proposal is being met with fierce criticism from Hong Kong's pro-democracy activists as well as the U.S. State Department. Our Kristie Lu Stout joins us now from Hong Kong with the very latest. Kristie, this move by Beijing caught everyone by surprise. Is this the end of Hong Kong as we know it?

KRISTIE LU STOUT, CNN CORRESPONDENT: Well, those are the words from one opposition lawmaker here fearing that this would be the end of Hong Kong as Beijing moves to tighten its grip on the territory. On Thursday China's Parliament introduced this national security legislation which would give Beijing more control over Hong Kong. And today we saw the National People's Congress kick off in Beijing. And they were set to rubber stamp and pass this legislation that would curb sedition, succession and foreign influence in Hong Kong.

Now there was phrasing in this legislation that has captured a lot of attention. And that is enforcement mechanisms. And observers say that that is referring to China's plan when this bill is passed to allow China's ministry of state security to establish themselves inside Hong Kong and to enforce this new security legislation. As you can expect, a lot of people here in Hong Kong are outraged including opposition lawmaker Dennis Kwok. This is what he had to say.

(BEGIN VIDEO CLIP)

DENNIS KWOK, CIVIC PARTY LAWMAKER: I just want to say to the international community, that this is the end of Hong Kong. This is the end of one country, two systems. Make no mistake about it. That Beijing, the central people's government, has completely breached its promise to the Hong Kong people. A promise that was enshrined in the Sino-British Joint Declaration and the basic law.

(END VIDEO CLIP)

LU STOUT: In the last hour the Hong Kong chief executive, the top leader here, Carrie lam, issued a fresh statement offering support of this legislation. And she writes this, we'll bring it up for you.

Quote, the Hong Kong SAR government supports the NPC's deliberation of the decision to establish and improve at the national level the legal system and enforcement mechanisms for the Hong Kong SAR to safeguard national security.

Now, Anna, there has been, as you know, a lot of anger directed at Beijing, directed at the government here in Hong Kong which many people here see as agents of Beijing. Especially after the recent arrests of hundreds of people who during the pandemic have taken part in flash mob protests and singing the pro-democracy anthems and shopping malls. Anger after the arrests of 15 high profile pro- democracy activists add in a single day. Including the 81-year-old founder of the Democratic Party, Martin Lee. All of these arrests in addition to this national security legislation just adding fuel to the fire setting the stage for another explosive protest season here in Hong Kong -- Anna.

COREN: Yes, obviously, this new law, Kristie, is supposed to stop that protest movement --

LU STOUT: Yes.

COREN: -- that has upset Beijing so much. And yet you would think this move is only going to further inflame the situation.

LU STOUT: In fact, according to the chatter that we've been monitoring on the telegram app, there are already plans for protests this Sunday. You know, after a pandemic induced pause in the Hong Kong protests there is still anger. The tension is palpable. We also know a number of key and very sensitive anniversaries are coming up including the June 4th Tiananmen anniversary. The June ninth anniversary, that's one year since a million people turned out to march against a controversial extradition bill. June 16th, when 2 million people turned out to march. July 1, another flashpoint date.

And just around the corner next week, May 27th, that's when lawmakers in the Hong Kong legislative council are set to debate again a controversial national anthem bill that would make it a crime here in Hong Kong punishable with jail time to mock or insult the national anthem. You know, there's a lot of fear brewing that there will be a brutal summer here in Hong Kong -- Anna.

COREN: Yes, a lot of fear but certainly a lot of anger. Kristie Lu Stout, great to see you. Many thanks for the update.

Well, Asian markets are being stirred up by the news out of Beijing. The Hang Seng in Hong Kong taking a real beating finishing the day down more than 5 percent.

[04:35:00] You can see the Nikkei down almost 1 percent. The Shanghai Composite down almost 2 percent. The Seoul Kospi down almost 1.5 percent. Well, Kaori Enjoji is joining us now from Tokyo. And as we can see We are joined from Tokyo. As we can see, Kaori, the Hong Kong markets certainly spooked by this new security legislation. But it has filtered through the rest of the markets here in this part of the world, in Asia.

KAORI ENJOJI, JOURNALIST: Absolutely, Anna. Its risk felt throughout the region as Beijing is moving to impose the new security laws. And first and foremost, the Hang Seng at closing in its second week will, off by more than 5.5 percent. A big tumble on the Hang Seng index led by property stocks. And that rippled through particularly in the afternoons as some of the bigger markets in the region like Japan which also moved lower.

I mean, investors remember the pro-democracy movements of 2019 and a whiff of the new restrictions on autonomy, the civil liberties that Hong Kong has enjoyed since 1997 are prompting investors to take profits because of the rally, particularly since we've seen since the March lows.

I think on top of that the fact that we didn't get a GDP forecast from China weighed on sentiments as well. You're seeing a move in other equity markets as well, lower. You're also seeing Dow futures move lower by about 1 percent. Other commodities like oil, WTI is down more than 6 percent on the risk off mood. And as you would expect in a situation like this, people are taking to the dollar and the yen as a safe haven and also to U.S. treasuries.

And I think people are concerned that this is going to be the new flash point in U.S./China relationships just in a time that when people were starting to think about restarting the economy in many of these countries. So it is a very risk off mood again across the Asian financial markets with the Hang Seng leading the way lower -- Anna.

COREN: Kaori Enjoji, many thanks.

President Trump says there probably will be a second stimulus package to assist Americans struggling with unemployment. He gave no mention of what it would include but Senate majority leader, Mitch McConnell, did say what it won't.

(BEGIN VIDEO CLIP)

TRUMP: I think we will. I think we're going to be helping people out. We're going to be getting some money for them during the artificial -- because it really is, it is an artificial closure. I would say there could be one more nice shot. One more nice go.

SEN. MITCH MCCONNELL (R-KY): I think there's a high likelihood we will do another rescue package. It's not too far off. Let me tell what you it won't be. It won't be a $3 trillion left wing wish list that passed the House that almost couldn't get all the Democrats to vote for that Senator Schumer is in favor of. That's not in the past the Senate. Not going to become law. (END VIDEO CLIP)

COREN: Well, the stimulus package is meant to help Americans cope with losing their jobs and help businesses staying afloat. But despite the high level of people filing for unemployment, it seems some are actually reluctant to get back to work. CNN's Kyung Lah explains why.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Hello.

ANDRES NUNEZ, JOB DEVELOPER, RELIABLE STAFFING: How's it going? My name is Andrew and I'm calling from Reliable Staffing.

KYUNG LAH, CNN CORRESPONDENT (voice-over): As businesses look to reopen --

NUNEZ: I will work with you during the COVID situation.

LAH: -- job recruiters like Andres Nunez search for people to take the jobs. Yet, one out of every five calls he makes --

NUNEZ: They don't want to come out. They don't want to come out because the price isn't right.

LAH (on camera): How does unemployment fit into that piece?

NUNEZ: People would rather just get the unemployment.

LAH (voice-over): Because in many cases, it pays more.

Unemployment benefits average more than $350 a week nationwide in state benefits, plus, an additional $600 per week in federal stimulus funding.

UNIDENTIFIED FEMALE: Before Unemployment, I was lucky to make between 250 and $300 a week.

LAH: This recent college graduate, who asked her name not be used, was laid off from a bowling alley in Ohio in March. Her untaxed unemployment is three times her old take-home pay.

UNIDENTIFIED FEMALE: I've been able to pay off my car three months early.

LAH (on camera): You are making more money not working. What does -- what do you think about that?

UNIDENTIFIED FEMALE: It's lessening the stress of going back to work.

LAH (voice-over): Exposure to the virus is the biggest concern, she says, as the economy reopens.

(on camera): If the bowling alley calls and says, we want to hire you back, but you have this option of unemployment, which one do you choose? UNIDENTIFIED FEMALE: See, that -- that's actually a hard question. This is the first time I felt financially stable in a very long time. But then again, I'm very much the type of person where I like to feel like I'm earning my money in the same way. Like, everyone has, in my mind, a right to live comfortably and not have to worry. And I think this level of unemployment money is allowing that to happen.

JOSH SOUDER, DIRECTOR OF OPERATIONS, I.E. ENTERTAINMENT GROUP: How you doing, guys?

LAH (voice-over): But that doesn't help employers like Josh Souder.

SOUDER: I have, you know, employees that won't return my calls. I had one employee show up and quit two days later to go back on unemployment.

[04:40:00]

LAH: Souder runs a Drunken Crab in North Hollywood, California. When we met him at the beginning of the coronavirus crisis, he had just laid off 75 employees.

SOUDER: I'm worried about having a heart attack, to be perfectly honest with you.

LAH: Today, his dining room sits empty. Carry out only.

Unemployment verification requests are delivered by the handful.

UNIDENTIFIED FEMALE: OK. Would you like ranch with your Cajun fries?

LAH: A few employees are back. As far as the others?

SOUDER: The amount of money that people are making on unemployment right now, quite honestly, is more than what we were paying them before.

LAH (on camera): Do you feel like you're competing with unemployment?

SOUDER: No question. I don't blame them. But we do need workers to come back eventually. This is a limited amount of money that you will receive for a limited amount of time that will run out.

LAH (on camera): The federal stimulus money, the $600 per week, is set to expire at the end of July.

The unemployed woman you heard from in our story, she said that this entire experience has taught her that her wages, and the wages of people who might work in a theater behind me, well, those wages simply are not high enough in this country, especially if you consider college loans and health care.

Kyung Lah, CNN, Los Angeles.

(END VIDEOTAPE) COREN: The Trump administration is withdrawing from yet another arms control deal. The Open Skies Treaty was signed in 1992 during the administration of U.S. President George H.W. Bush. It came into effect in January 2002. 34 nations are signatories to the deal. It allows member countries to conduct reconnaissance flights over each other countries to gather data on military forces and activities. The treaty was meant to ensure transparency by informing each other of the intent to conduct brief reconnaissance flights. Signatories would be reducing the risk of misunderstandings that could lead to war. Several of the U.S. European allies have urged President Trump to reconsider the administration's decision to withdraw from the treaty.

Still to come, an evacuation with complications. Some Michigan residents had to race from their flooded homes while maintaining social distancing. Those details next.

(COMMERCIAL BREAK)

[04:45:00]

COREN: The extent of damage is becoming clear as flood waters recede in Midland. Michigan. Thousands of people abandon their homes after two dams failed on Tuesday. On Thursday President Trump issued a federal emergency declaration to free up resources. He said he will visit the area at an appropriate time.

Ryan Young reports on the tricky evacuation amid the COVID crisis.

(BEGIN VIDEOTAPE)

TOM LESSL, EVACUEE: It's kind of hairy, you know? I mean you're right in the middle of damn pandemic, but you know, you come here.

RYAN YOUNG, CNN CORRESPONDENT (voice-over): About 11,000 evacuated across central Michigan, 100 of those people, forced into this shelter in Midland High School, waiting for the water to go down.

UNIDENTIFIED MALE: I've seen other floods, but not like this.

YOUNG: This is why. Intense rain caused the nearly 100-year-old Eatonville and Sanford Dams to breach Tuesday, sending water crashing downstream.

UNIDENTIFIED MALE: There was actually a small house floating in the river, a blue house, that was going down river, and it was just tragic, the amount of people that are affected by this.

YOUNG: Parts of the city of Midland, Michigan, underwater. Businesses and homes, flooded. Stop signs are below the surface, and kayaks paddle down the streets.

LONNIE MILLS, EVACUEE: It's heartbreaking.

YOUNG: These drone pictures are the first time Lonnie Mills has seen his houses since the flood.

MILLS: It's just kind of confirmed to us, come here, expecting the worse and then I saw it, so.

YOUNG (on camera): Would you be back? Do you think you'll going to rebuild?

MILLS: I have to.

YOUNG (voice-over): But this disaster may have been preventable, the federal government warned for more than a decade, the Eatonville Dam could not handle a massive flood, and in 2018, it revoked the owner's license to operate it. A local task force was given a preliminary permit to take over the dam. But for now, the shelters are trying to keep people who can't go home safe, while avoiding spreading the virus.

JERRY WASSERMAN, SHELTER ORGANIZER: We have a very senior population here. So, the consequence, I was not going to become, for lack of a better word, a New York nursing home. We're not going to have that on my shift here, and so we are taking extra precautions.

YOUNG: Everyone's temperatures are checked at the door, surfaces are constantly scrub down, and beds are cleaned.

(on camera): When you can see stickers like this one, that's say cleaned. The reason why, is when they put the bedding together, they make sure they wipe it all down with Clorox, they use fresh sheets, and they want to make sure each one is indicated, so they know it's safe.

(voice-over): So far, shelter organizers say they have not seen anyone with symptoms of the virus. Though, across Michigan, the number of cases continues to go up, while Midland waits for the water to go down.

Ryan Young, CNN, Midland, Michigan.

(END VIDEOTAPE)

COREN: The man who recorded disturbing video showing the shooting death of a black Georgia jogger is now facing charges himself. 50- year-old William "Roddie" Bryan was arrested on Thursday. He is charged with felony murder and attempted false imprisonment in connection with Ahmaud Arbery's death. Bryan recorded the shooting of the 25-year-old on his cell phone. His attorney says he committed no crime.

TV star, Lori Loughlin and her fashion designer husband are agreeing to prison sentences, hefty fines and community service in the U.S. college admissions scam. The couple fought the accusation for months but now they'll say they'll soon plead guilty to conspiracy charges. They're accused of paying half a million dollars to get their two unathletic daughters into the University of Southern California as rowing team members. Under the deal, Loughlin would serve 2 months in prison and her husband five months. A source says they want to put the affair behind them.

Coming up, Americans are gearing up to celebrate Memorial Day weekend. We'll talk about how to enjoy the long weekend while staying virus safe.

[04:50:00]

(COMMERCIAL BREAK)

COREN: Apple has released a new iPhone and software update, IOS 13.5. And you're going to want to make sure you download this one. They made it much easier to unlock your iPhone when wearing a mask. When mask wearing users swipe up, they can immediately input their pin code. Previously face I.D. would try to recognize your face multiple times before prompting for your pin. And that's not all. Apple also added technology for digital contact tracing and exposure notification apps.

Well, the long Memorial Day weekend now just hours away is the unofficial start of summer in the U.S. Americans usually hit the road, go to parks and beaches and have outdoor cookouts with family and friends. Well, top U.S. Dr. Anthony Fauci said it's OK to be outside but take care.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: Go out. Wear a mask. Stay six feet away from anyone so you have the physical distancing. And go out. Go for a run. Go for a walk. Go fishing. As long as you're not in a crowd and you're not in a situation where you can physically transmit the virus. And that's what the mask is for. And that's what the physical distance. I plan to go out for nice walks and hikes over Memorial Day and I'm going to do it with care with a mask on.

(END VIDEO CLIP)

COREN: Well, even with everyone taking precautions, this year's Memorial Day weekend comes with risks. As CNN's Peter Muntean explains.

(BEGIN VIDEOTAPE)

PETE MUNTEAN, CNN TRANSPORTATION CORRESPONDENT (voice-over): I set out on I-95 towards Virginia Beach. It, along with some beaches in New Jersey, Delaware and Maryland are open for the holiday weekend.

(on camera): This is always the big lynchpin in 95. We're breezing through right now. This is easy.

(voice-over): But University of Maryland researchers say road trips are nearing pre-pandemic levels. Last weekend climbing 18 percent in Maryland and Virginia alone. Travel firm INRIX thinks typical traffic will return in some spots this weekend. A driving holiday that's become difficult to forecast.

UNIDENTIFIED FEMALE: For the first time in nearly two decades AAA is not releasing a travel forecast because economic data is just not readily available for us to do so.

MUNTEAN: Researchers do say that the car is about the safest way to get around right now but it's when you stop where things get more difficult.

[04:55:00]

(on camera): We're going to see what this is like.

(voice-over): Rest stops are open in Virginia but that can vary state to state. The CDC underscores wearing a mask and washing your hands when traveling. Here crews are cleaning bathrooms every hour.

KELLY HANNON, VIRGINIA DEPARTMENT OF TRANSPORTATION: We want people to be reassured that they can come in here and they have a place that is going to be clean for them.

MUNTEAN (on camera): Of course, an essential part of a road trip is a snack and AAA say be mindful of the buttons that you present a vending machine. Maybe use a card instead of cash. They say especially after you use something like that, make sure you hand sanitize afterwards.

(voice-over): Weekend gas prices are the lowest in more than 15 years according to AAA.

(on camera): One more thing to think about on your road trip. All of the things you touch at the gas pump, the nozzle, the keypad. One researcher telling me, maybe use a knuckle to hit these buttons or use it on a touchscreen that's better than your fingertips. They emphasize, make sure that you wash up afterwards or maybe touch all of this with a paper towel or even gloves.

UNIDENTIFIED MALE: Well, I don't think the people understand the risk very well.

MUNTEAN (voice-over): The big concern from health experts that quarantine fatigue will lead to more travel and spread coronavirus even further.

UNIDENTIFIED MALE: I think people are just getting fed up with being closed in all of the winter months and now they're getting out.

MUNTEAN (on camera): Doing any traveling for Memorial Day?

UNIDENTIFIED MALE: No.

MUNTEAN: No, staying home?

UNIDENTIFIED MALE: Staying home.

(END VIDEOTAPE)

COREN: That was CNN's Peter Muntean reporting there.

And finally like many attractions. A llama sanctuary in Wales has had to close its doors because of the coronavirus. But it's owner still found a way to bring some joy to local people. Well this is Matt and his llama Max. They've been making food deliveries to remote places during the lockdown. Matt says it's an eco-friendly way to help vulnerable people. Good for them. That wraps up this hour of CNN NEWSROOM. Thanks so much for joining

us. I'm Anna Coren. "EARLY START" is coming up next.

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