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Biden Prepares For G7 Summit; U.S. Senate Passes Bipartisan Bill To Compete With China; U.S. Vice President Wraps Up Latin America Trip; Europol Praises Global Crackdown on Organized Crime; Major Websites and Apps around the World Go Dark; Island Dealing with Worst Drought in Decades. Aired 2-2:45a ET

Aired June 09, 2021 - 02:00   ET

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

[02:00:06]

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Hello and welcome through our viewers around the world. I'm Anna Coren in Hong Kong. Coming up on CNN NEWSROOM. Face to face for the first time in more than a year. G7 leaders will meet in the U.K. this week to talk about the pandemic America and Russia.

Plus, the U.S. Senate approved a massive bill aimed at countering China's economic ambitions.

And the climate crisis in Taiwan. How an island-wide drought is causing major problems for one of the world's largest chip makers.

In just a matter of hours, the U.S. President will embark on his first overseas trips since taking office. Joe Biden and the leaders of the wealthy G7 countries will meet in England later this week to try to solve some of the world's biggest problems. COVID-19 clearly top of the list. This will be their first in-person summit since the pandemic. And after members prioritize vaccinating their own people. They're now casting a wider look at the world.

The setting for the summer, Cornwall in England's scenic Southwestern Peninsula. Well, CNN's Nic Robertson comes to U.S. live from Carbis Bay. And Nic, enormous agenda awaits President Biden. Where does he begin?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: He begins first with a bilateral with Boris Johnson. Boris Johnson wants to have a strong relationship with the United States and improve the special relationship, if you will. He wants the United States support for his sort of post-Brexit wrangling over the Northern Ireland protocol. He wants that support from President Biden because at the moment, President Biden does seem to support the Irish and E.U. position on that.

But that's really a sort of a starting step. The real meat of the G7. That begins on Friday, that's when the other leaders will be here. And we heard overnight from Scott Morrison of Australia, the Prime Minister there weighing in on one of the issues that will be a subject of conversation here and that is relations with China. There will be calls for an aligning of the United States allies, not just the G7 but countries like Australia, South Korea, India, who've been invited to come along and observe at the at the G7 and contribute to counter China's coercive trade practices as Scott Morrison put it.

And also their human rights abuses as seen through their treatment of Uyghurs. So China definitely will be one of the topics for discussion that central to President Biden, central to his agenda too will be Russia. But the bore -- the broad big brushstroke issues that will get disgust first COVID vaccine for the globe. Boris Johnson has set out. He of course is for hosting, he has set out a target of having everyone on the planet vaccinated against COVID-19 by the end of 2022.

There will be funds for improving women's education and in developing nations. And also we heard from the G7 finance ministers meeting just a couple of days ago, they've agreed a global corporate minimum tax of 15 percent. So that'll be another topic up for discussion, as well as the climate. So, a packed agenda but big things in there for both Boris Johnson to have a sort of a big position, Britain as global Britain, his opportunity to do that.

And certainly for President Biden to kind of reach around some of the issues that are key to him.

COREN: And Nic, I guess this is a reset in the U.S. relations with its allies after a tumultuous four years under Trump.

ROBERTSON: It is a reset. We've heard President Biden talk about how he'll work with allies that he'll try to win their support. And China is sort of -- is the big ticket item there. And he's certainly got an increasing alignment of the European nations after he gets done here with his first face to face G7 in almost two years. He'll go to summit with NATO in Brussels, with the E.U.-U.S. summit in Brussels before having a face to face with Vladimir Putin on one on one in Geneva in Switzerland a week and a half from now.

But certainly that sort of reset to bring support for the United States on its key issues and China being -- China being the principal, one of those is going to be part of President Biden's agenda across all of this. Thinking back to that that stormy G7 in 2018 in Quebec, Canada, where President Trump refused at the end of it to sign the joint communique.

[02:05:08]

ROBERTSON: Everyone now expecting the -- President Biden will be signing the communique, that he and his -- and his -- the members of his -- of this government have had such a hand in crafting already.

COREN: I'm sure a far more harmonious gathering. Nic Robertson joining U.S. from Carbis Bay. Good to see you. Many thanks for the update.

Well, a rare moment of bipartisanship in Washington, D.C. after the U.S. Senate passed a bill aimed at curbing China's growing economic influence. The bill would invest more than $200 billion in U.S. technology, science and research to boost America's ability to combat rising competition from China. Well, President Biden is praising senators for working across the aisle to get it passed. The bill heads to the House next.

For more on the bill and what it means for U.S.-China relations, we're joined by Geoeconomics founder, Robert Koepp. Robert, great to have you with us. This is obviously a rare of bipartisanship and an otherwise polarized capital. I mean, fundamentally, this is a U.S. taking on China which both Democrats and Republicans believe is a threat to global stability and American power.

ROBERT KOEPP, FOUNDER, GEOECONOMICS: Absolutely. And what's interesting, I guess, about this particular act is that it isn't just focused on military preparedness, as is more typically the case in China threat discussions in Washington. This is looking at science and technology, really industrial policy, which the U.S. has shied away from for many years.

COREN: Yes. What are the implications do you think for the U.S.-China relationship following this quarter of a trillion-dollar investment over the next five years into, as you say, scientific research and development?

KOEPP: Well, it's hard to tell. I mean, China obviously isn't happy with these sorts of moves, especially when it cites China is the reason for all this investment. It's not just the U.S. doing on its own, but it's doing it against China as it were. So there's obviously a heightened tension one sense but another sense, you can see how actually the U.S. is following China's lead. China has been doing this sort of investment in science and technology and industry for many years, and been quite successful at it. So in a way, it's a backhanded compliment.

COREN: I want to ask you, that Senate Majority Leader Chuck Schumer said if we do nothing, our days as the dominant superpower may be ending. I mean, we've all been watching the rise of China. But how far has the U.S. lagged behind? And is this the U.S. playing catch up?

KOEPP: Well, it's definitely U.S. playing catch up in the sense of policy initiatives. Of course, it's a different system, right? So it's not just China. If we look back further and say a generation ago it was Japan was in this driver's seat of innovation and technological advance but also pursuing an East-Asian economic development model heavily focused on government intervention in the markets.

So the U.S. hasn't gotten as far as what those East-Asian economies now led by China are doodling. But it is, you know, entering a new phase. And it's true that -- I mean, in terms of Senate Majority Leader's Schumer's comments, the U.S. hasn't been playing that game. So it's definitely a catch up to that game. Now, the U.S. has been doing all sorts of investments in the private sector.

So in that sense, it's maybe not as far behind as one might think. But in terms of government leadership, it's definitely been off.

COREN: Some analysts say that China is investing more than two percent of its GDP annually in research and development. How does the U.S. feel? KOEPP: Well, U.S. is as in one percent. So yes. I mean, again, it -- when you compare it that way, size of GDP now at the same time, China's GDP is about 60 percent of the U.S. So, you know, it means it's a little more than the U.S. invest but not as much as that figure might imply and just a headline basis. Be that as it may, if the U.S. wants to stay in a leadership position, and undeniably will need to invest more. Also, there's a role for government in any economy.

That's one of the things the Biden infrastructure plan is also emphasizing. And Republicans are also waking up to in a way that we didn't see in previous administration. So, I think this particular bill plus other bills that are being pushed through Congress really show there's been a sea change in Washington.

COREN: Rob, the bill opens the door for new sanctions targeting Beijing's votes. Human rights abuses. Commission's on a new study about the origin of COVID and calls for a diplomatic boycott of next year's Winter Olympics to be held in China. We're yet to get any Chinese reaction. Obviously, the Ministry of Foreign Affairs is due to speak in the coming hours but how do you think China will respond to all of this?

KOEPP: Well, I think there's a kind of short term likely response scenario and then a longer term.

[02:10:01]

KOEPP: Short term, they're going to criticize the U.S. that that's been a favorite foil of China's just as China's a foil for the US. So, there'll be criticism, there'll allegations of China bashing, there'll be heightened tension. The same time a new initiative has come from no less than the ultimate authority and China's Xi Jinping, chairman of the Communist Party himself who has been saying we need to present a more lovable image.

So one wonder is, will they pivot a bit here? In the past they've just really doubled down on criticism of perceived enemies. I wonder if they might try to make a kind of more friendly approach, you know, in trying to reengage the U.S. perhaps. But that would be played out longer term, especially leading up to like you mentioned the Beijing Olympics. That would be a time they want to be much more embraceable and then perceived as hostile.

COREN: I guess we need to watch this space. Robert Koepp, great to have you on the show and giving us your perspective. Thanks so much.

KOEPP: Thank you.

COREN: A sweeping crackdown on political opponents in Nicaragua. Police there have detained at three more opposition figures ahead of November's presidential election. Well, this is Felix Maradiaga, who was arrested on a Tuesday. Juan Sebastian Tamara Garcia was also seized by authorities. He's the cousin of yet another detained opposition figure, Cristiana Chamorro. And Tuesday, police arrested a well-known businessman connected to the opposition party. In all, at least five major adversaries to this man President Daniel Ortega have been arrested over the last week. A top U.S. State Department official says the arrest confirmed Mr. Ortega is a dictator and called for an urgent international response.

Well, Kamala Harris' first overseas trip as U.S. vice president isn't going according to plan. She is now facing pressure to visit the U.S.- Mexico border. White House Correspondent Jeremy Diamond has been traveling with Harris and has more from Mexico City.

JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Vice President Kamala Harris wrapping up her first foreign trip as vice president. It's a three-day swing through Guatemala and Mexico which she declared a success in terms of addressing those root causes of migration, which have been her central focus during this trip. There were tens of millions of dollars of new investments for Central America.

An anti-corruption task force to fight corruption in Guatemala, as well as an agreement with the Mexican government to address development together with U.S. in Central America. All of those the Vice President arguing will help at least in the long term to give the people of Central America hope that they can have better lives in their own countries. But this diplomatic test for the Vice President certainly quickly turning into political quicksand.

And that is because she drew criticism initially from the left when she warned would be migrants in Guatemala, not to come to the U.S.- Mexico border telling them that they would be turned back. And then there was another issue when she was asked why she hasn't visited the U.S.-Mexico border. Initially she equivocated. Comparing it to not having gone to Europe yet, as Vice President which was frankly, neither here nor there.

I asked the Vice President again whether she would commit to visiting that border. Here's what she said.

(BEGIN VIDEO CLIP)

DIAMOND: Can you commit right now that you will indeed visit the U.S.- Mexico border and will you do it soon?

KAMALA HARRIS, VICE PRESIDENT OF THE UNITED STATES: Jeremy, let me tell you something. But yes, I will. And I have before.

(END VIDEO CLIP)

DIAMOND: And I also asked the Vice President about another item in her portfolio. An assignment from the President to tackle this issue of voting rights. The Vice President's telling me that she is not giving up on this despite these new comments from Democratic senator from West Virginia, Joe Manchin that he will not weaken the filibuster, he will not support one of these key pieces of voting rights legislation.

And so while the Vice President's insisting that this is a fundamental fight for democracy, and she will press on not being entirely clear on what the how is to get that done. Jeremy Diamond, CNN traveling with the Vice President in Mexico City.

COREN: Coming up on CNN NEWSROOM. While most of Brazil is struggling to get vaccinated, once more city has become a case study and how to successfully contain the pandemic. How do they do it?

Plus, Tokyo Olympic officials are studying how the upcoming games will impact Japan's COVID-19 crisis. Their findings in a live report from Tokyo coming up.

(COMMERCIAL BREAK)

[02:16:33]

COREN: More restrictions are easing in France and Belgium as COVID-19 cases full. Starting today, cafes and restaurants are allowed to serve customers indoors. It's the first time they've been allowed to welcome customers inside their dining rooms since last year's closures.

Europe appears ready to open up more borders. The European Parliament is considering a special pass to allow travel across the E.U. Parliament members voted on the deal Tuesday and results are expected to be announced today. The travel certificate will prove that a person has been vaccinated against COVID tested negative for the virus or has recovered from the disease. The pass is expected to go into effect by July 1st in all E.U. countries. Some non-E.U. countries are also in the pipeline to start using the certificate.

One small city in Brazil sees hope for the end of the pandemic after vaccinating almost its entire adult population. Researchers say it's a case study and how to successfully fight and contain the virus. Shasta Darlington reports from Sao Paulo.

(BEGIN VIDEOTAPE)

SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT (voice-over): in Serrana, Brazil the focus of a clinical study of vaccine immunity. These parishioners fears of the deadly coronavirus have given way to hope for a new beginning.

ELAINE APARECIDA DE OLIVEIRA, SERRANA RESIDENT (through translator): I think our city is privileged. The vaccine is a hope, a light in the midst of all this darkness.

DARLINGTON: The campaign by Butantan Institute in partnership with Sao Paulo University of Medicine to vaccinate almost all 30,000 residents of the City in Sao Paulo State with the Chinese Sinovac vaccine began in February, when roughly one out of every 20 people in Serrana had COVID-19.

MARCOS DE CARVALHO BORGES, PROFESSOR, RIBEIRAO PRETO MEDICAL SCHOOL, USP (through translator): More than 10,000 people go to work in other cities. This leads to these infectious and contagious diseases. So, this series of factors makes Serrana almost ideal.

DARLINGTON: And while full results will not be published until July. The preliminary data from the study has given a glimpse into the very real possibility that the COVID-19 pandemic can be contained through mass vaccination.

RICARDO PALACIOS, CLINICAL RESEARCH MEDICAL DIRECTOR, BUTANTAN INSTITUTE (through translator): The reduction rate for hospitalizations obtained with the study is 86 percent in the entire population of Serrana. And the reduction in deaths was 95 percent.

DARLINGTON: In Brazil, a country with the second highest death toll from COVID-19 struggling to cope as the virus ravages its population. Those figures giving researchers reason to celebrate.

PALACIOS: We were able to affirm with the study, it is possible to control the epidemic through vaccination. We do not need to isolate. Prevent the transit of people to control the epidemic. Vaccination is the key.

DARLINGTON: These vaccine shortages throughout Brazil and most of the developing world replicating that success is easier said than done. Reaching a level of predicted herd immunity like what appears to be on display and Serrana researchers say still requires vaccinating a minimum of 70 percent of the population. And with vaccine reluctance throughout the globe added to the mix, the order becomes even taller.

But here in Serrana there's reason to be grateful. Father Juliano Gomez, who once saw his parishioners united in grief, his COVID took root and stole the lives of so many loved ones. Sees light returning to his community

[02:20:03]

REV. JULIANO GOMEZ, SERRANA RESIDENT (through translator): I see us establishing this opportunity for a new normal, which symbolizes a state of more tranquility, health and hope. It is what the world is wanting. This is happening to us here in Serrana. That is why I'm very happy.

DARLINGTON: Serrana for now on display for what is possible. A spark of hope for the wider world still caught in the deadly grip of the COVID pandemic.

Shasta Darlington, CNN Sao Paulo.

(END VIDEOTAPE)

COREN: For many Germans, David Hasselhoff will forever be linked to his performance at the Berlin Wall. Now he's taking on COVID-19. The Baywatch star is diving into the vaccination campaign. Germany's health ministry posted a video of him urging people to get on board with the vaccine.

(BEGIN VIDEO CLIP)

DAVID HASSELHOFF, ACTOR: What I'm looking for is to get life back to normal is the freedom. The freedom to get vaccinated. And to go around the world. The most important experience of the pandemic for me is death. It causes death. Get vaccinated. The advice I can give to everyone in America and to the world and to Germany is get vaccinated.

(END VIDEO CLIP)

COREN: The organizers of the Tokyo Olympics said the upcoming games will have only a limited impact on Japan's COVID-19 situation. They say models indicate there would be little difference between holding the games with spectators or cancelling the event, which they are getting enormous pressure to do. Well, this comes as later today the International Olympic Committee will meet for the second day of a three-day summit. CNN's Blake Essig joins us now live from Tokyo.

And Blake, only 3-1/2 percent of the population has been vaccinated. The majority of Japanese do not want these Olympics to happen. But it's still happening. What's the latest from the IOC?

BLAKE ESSIG, CNN INTERNATIONAL CORRESPONDENT: Yes. You know, that sentiment hasn't changed, Anna. And health and safety remain the big concern of majority but the Tokyo 2020 organizers are saying that hosting the Olympics will have little impact on COVID-19 cases. They point to analysis conducted by Tokyo University that determined hosting the games will only result in 15 new cases in one severe new case per day that adds up to 240 cases and 16 severe cases over the course of the 16 days that the games will take place.

But the context here is key. And that data is a bit misleading according to the associate professor who conducted the analysis who is an economist and not an epidemiologist says those numbers are only limited to the to the potential impact of the roughly 100,000 foreign visitors, including the athletes expected to participate in the games. It is also based on the worst case scenario of Olympics-related staff not quarantining.

Now the second part of the analysis which wasn't mentioned by organizers has to do with the general public. There are roughly 40 million people living here in Tokyo. He says that their movement is likely to increase due to the Olympics, as some might attend competitions and watch parties throughout the course of the game. So, the potential impact as the result of hosting the games is far greater than the additional 15 cases per day laid out by Olympic organizers.

Now, the professor who did the analysis says limiting the movement of the general population is the key to holding a safe games and avoiding a rise in infection. The analysis also doesn't take into account the roughly 70,000 volunteers some of who will be working inside the Olympic Village or various competition venues and likely interacting with athletes and foreign delegates. Organizing officials say they're considering vaccinating these volunteers but for now, the only protection provided will be in the form of two masks, hand sanitizer and a request to socially distance.

And currently only about 3-1/2 percent of the population has been fully vaccinated. While the Japanese government is doubling down to improve those numbers. It is unlikely that the majority of people in Tokyo will be vaccinated by the time the games begin.

COREN: Yes. Hard to believe, isn't it? Blake Essig joining us from Tokyo. Great to see you. Appreciate the update. Thank you.

Well, the International Olympic Committee announced an expanded refugee team for this year's games. 29 athletes will compete in 12 Sports under the Olympic flag, and this group is nearly three times as large as the inaugural refugee team at the Rio 2016 Games. The athletes will represent many countries with members from Syria, South Sudan, Afghanistan, Eritrea and more. They will march into the stadium during the opening ceremony in the second spot behind Greece where the games originated.

Israeli officials will allow a controversial right-wing march in Jerusalem's Old City to go ahead next Tuesday. Prime Minister Benjamin Netanyahu's Cabinet approved the parade with the route to be agreed on between the police and march organizers.

[02:25:08]

COREN: The police had canceled the event over concerns it could renew the conflict with Hamas in Gaza. The confidence vote for the coalition government that would ask Mr. Netanyahu is set for Sunday. If it succeeds, it will be up to coalition partners Naftali Bennett, and Yair Lapid to decide whether the march proceeds.

Israel's military says it destroyed a building housing. The Associated Press and Al Jazeera offices in Gaza because it was also an electronic warfare site for Hamas. The al-Jalaa building collapsed after an airstrike conflict last month. The A.P. says it has not received evidence to support Israel's claim and is calling for an independent investigation. A.P.'s CEO met with Israel's ambassador to the U.S. and that U.N. on Monday to discuss the incident.

CNN's Hadas Gold has the details from Jerusalem.

HADAS GOLD, CNN CORRESPONDENT: The Israeli military is giving more details into why they struck and destroyed a building in Gaza that hosted the offices of the Associated Press and Al Jazeera during that 11-day conflict with Hamas-led militants last month. Now according to the Israeli military, Hamas was using the building known as the al- Jalaa building to develop new capabilities that they said could electronically jam Israel's Iron Dome missile defense system.

This is the system that intercepts rockets mid-air before they can land in civilian areas. The Israeli Air Force gave occupants of the building an hours' notice to evacuate before they struck the building leading to its collapse. And according to the Israeli military, they say the target was of a high military value to Hamas and that the equipment was in the building at the time that it was struck and the building collapse.

But the move was widely condemned by news organization and international journalism organizations called an unacceptable and a threat to freedom of the press. The Israeli ambassador to the United States Gilad Erdan met on Monday with the A.P. leadership in New York, he said to try to restore the relationship and give this information and he said that Israel does not think that the Associated Press knew that Hamas was possibly operating out of the building. The A.P. says that it had no indication that Hamas was operating out of the building and has called repeatedly for an independent investigation so that the facts are fully known. Hadas Gold CNN Jerusalem.

COREN: Still to come. Details of how one app helped authorities deal a major blow to organized crime across the world. And from the Americas to Asia, an outage takes a number of major Web sites offline. More on that coming up.

(COMMERCIAL BREAK)

[02:30:00]

ANNA COREN, CNN NEWSROOM: Well, it reads like the ending of a Hollywood thriller only it is true. Global authorities executed a massive sting operation across multiple countries, seizing more than 30 tons of drugs, hundreds of weapons and more than $48 million in global currencies.

We are learning more about Operation Iron Side, the three-year affair Europol calls one of the most sophisticated law enforcement operations to date. In a joint news conference with the FBI, Swedish, Dutch and Australian Police, Europol's deputy director called for a global network of law enforcement to keep fighting against organized crime. He laid out what the operation has accomplished so far.

(BEGIN VIDEO CLIP)

JEAN-PHILIPPE LECOUFFE, DEPUTY EXECUTIVE DIRECTOR OF EUROPOL, OPERATIONS DIRECTORATE: This information over the last week, hundreds of law enforcement operations on a global scale, from New Zealand and Australia, to Europe and the USA, with impressive results, more than 800 arrests, more than 700 locations searched, more than eight tons of cocaine and more.

(END VIDEO CLIP)

COREN: Well, here is what Calvin Shivers, Assistant Director of the FBI's Criminal Investigative Division, told CNN about the operation.

(BEGIN VIDEO CLIP)

CALVIN SHIVERS, ASSISTANT DIRECTOR, FBI CRIMINAL INVESTIGATIVE DIVISION: Collectively, with the countries that were participants, we made a decision to end the operation now because, again, these were ongoing criminal enterprises involved acts of violence, narcotics distribution, narcotics that were flowing into communities around the world, potential acts of violence that would occur all around the world. And so we made this decision to end the operation now.

But one of the things I would like to emphasize is that just because we conducted these arrests over the last few days does not mean that the operation is there. There is additional intelligence that will be developed. I would imagine there are a number of individuals would choose to cooperate to help us understand and identify additional subjects to be arrested.

So I would anticipate for the next few weeks, if not, even months, that our operations will continue based on what we did a few days ago.

(END VIDEO CLIP)

COREN: Well, some major websites and apps around the world are back up after briefly going down on Tuesday. The problem was caused by an outage at Fastly, a cloud-computing service provider. CNN's Anna Stewart reports the disruption is yet another reminder of how vulnerable the internet is to outages.

ANNA STEWART, CNN REPORTER: This was a huge web outage, albeit short- lived. Now, it wasn't the result of a cyber or a ransomware attack. This was due to a malfunction at a company that many people will never have heard. Of it is called Fastly. It is a CDN, a content delivery network. And it's a company that essentially helps websites and services to run fast, so websites load quickly. They have a network of servers distributed around the world. It means that those service are closer to the end user.

Now, the problem on Tuesday, according to Fastly, was some sort of configuration error. They identified it, they fixed it and many of the websites that were up and running within the hour. But this isn't the first time that something like this has happened. It's happened to other CDN companies, like Amazon web services and Cloudflaire, perhaps not outages quite in a scale that we saw on Tuesday, but it highlights just how reliant the internet really is on some of these companies and how a problem, just one, can have a huge global ripple effect.

Anna Stewart, CNN, London.

COREN: Well, the climate change alarm is sounding in Taiwan. Coming up, the global implications of the island's worst drought in more than 50 years.

(COMMERCIAL BREAK)

[02:35:00]

COREN: Welcome back. Taiwan is dealing with its worst drought in decades. Recent heavy rains prompted officials to ease some tough water restrictions, but the economy minister warrants the drought is not over. And it's impacting Taiwan's agriculture, electricity management, and globally viable semi-conductor industries.

For more now, let's turn to Will Ripley, who joins us from Taipei. And as we just mentioned, the government has eased those water restrictions due to some rain over the last few days, but it's not enough to break the drought.

WILL RIPLEY, CNN CORRESPONDENT: The problem is, Anna, is that when it does rain here, its tendency is to be much more severe in terms of the amount that falls all at once. But the climate models suggests that rainstorms will be few and far between. So when you get a big dose of rain after long periods of dryness, then you have flooding. So that is one of a number of climate related issues that are posing a direct challenge to the global chip supply, many of those chips made right here in Taiwan.

(BEGIN VIDEOTAPE)

RIPLEY (voice over): Taiwan's worst drought in more than half a century, making this island look more like a desert. Cracks snaked across the bottom of Sun Moon Lake, Taiwan's largest body of water parched, reservoirs across the island evaporate.

Recent rains put a small dent in a big problem, a problem scientists predict will only get worse.

HUANG-HSIUNG HSU, CLIMATE RESEARCHER, ACADEMIA SINICA: Our prediction show that it is going to become more and more serious in the future.

RIPLEY: Climate change models paint a dire picture for Taiwan, stronger typhoons, more flooding, less frequent rain, future droughts far more severe.

This mural gives you an idea of what Baoshan Reservoir usually looks like. This is what it looks like now. Water levels are right around 30 percent. They were less than 3 percent before monsoon season kicked off in mid-May.

Taiwan is experiencing its worst drought in decades. That's a big problem, because this reservoir is the primary water source for the Hsinchu Science Park, home nearly 600 electronic companies, including the world's leading semi-conductor manufacturer, TSMC.

Why is this drought a problem for Taiwan's semi-conductor industry?

JEFFEREY CHIU, ELECTRICAL ENGINEER, NATIONAL TAIWAN UNIVERSITY: Every layer, it needs a lot of chemical process, you need to clean the surface. You need it clean it by water, flowing pure water.

RIPLEY: Semi-conductor manufacturers are searching for solutions, water recycling, purifying seawater, both years away from quenching the insatiable thirst of chip factories.

Making chips also requires huge amounts of energy. Taiwan, like the world, is trying to fight the climate crisis, cutting its carbon footprint while phasing out nuclear power. The island's semi-conductor industry is investing big in green energy. Hundreds of giant wind turbines line the coast. Solar panels dot the landscape.

HSU: We need to cut down our carbon dioxide emissions. But on the other hand, we need to generate more electricity.

RIPLEY: Just after we arrived, rolling blackouts hit the Taiwanese capital. Energy demand grows as temperatures rise. Taiwan's top energy consumer, semi-conductors, vital to the global economy, powering everything from cars to computers. If Taiwan's power and water supply is in peril, the whole world can feel the pain.

(END VIDEOTAPE) RIPLEY (on camera): This issue really is interconnected, Anna. Because as you reported earlier, the United States has passed this Innovation and Competition Act, which includes more than $50 billion to encourage semi-conductor manufacturing in the United States.

[02:40:09]

That could potentially be a risk for Taiwan's economy, because semi- conductors are the number one employer, in addition to the number one energy consumer.

And so it is really a challenge and a crisis for this government on this island to find a solution and to find it fast, since the world can continue to feel that they can rely on Taiwan to supply the chips that the world needs, and, of course, complicating all of it is a very delicate relationship with the mainland, pressure from the U.S. to kind of stop selling to China, but, of course, China is a vital part of the chip supply chain as well, Anna, so, climate, geopolitics, all combining to create some really big challenges.

COREN: Will Ripley joining from Taipei, we appreciate the report, thank you.

Well, let's now get more from our Meteorologist, Tyler Mauldin. Tyler, what is the outlook for Taiwan?

TYLER MAULDIN, CNN METEOROLOGIST: It's not looking good, Anna. One of the most concerning side effects from climate change for Taiwan is the fact that we are seeing the number of typhoons impacting Taiwan decrease over the last several decades.

The reason being is there is an area of high pressure in the Western Pacific that typically would steer typhoons towards Taiwan and parts of the Eastern Asia. But that area of high pressure has weakened and is causing the typhoons to go a little more to the east and to the north, north of Taiwan. I mean, just last year, they were not impacted by any typhoons, zero land falling typhoons for Taiwan last year? Why is that important? It's important because Taiwan picks up 50 percent of their annual rainfall from typhoons.

Just last week, the fourth tropical storm took form in the Western Pacific, did have an impact on Taiwan. It brought them about 200 millimeters of rainfall, very beneficial there, but not enough to dent the drought. We are in a typhoon season now, so, hopefully, we get some close calls or some brushes that will provide some rainfall. We are also in monsoon season.

I just mentioned climate change is impacting the typhoon season for Taiwan, but it's also impacted the monsoons as well. It's causing the monsoon season to start a little later and shortening the amount of the rainy season in Taiwan. That means fewer, in a way, of rainy days for Taiwan.

And over the next coming days, we do see a little bit, in a way, of rain, about 15 to 100 millimeters, but not enough to really dent the drought here in Taiwan. Another factor that we are looking at here with climate change is how it causes the extremes to become more extreme. So when we do have a heavy rainfall, then it will be even heavier, Anna, because of climate change. And that could lead to flooding because those dry grounds just do not want to soak in that water.

COREN: It's all interconnected, isn't it? Tyler, we appreciate the update. Thank you so much.

Well, a herd of wandering of elephants has taken a respite from its worldwide celebrity to squeeze in a little nap. The elephants, now famous around their world for their trek across China, was spotted snoozing in the woods in Yunnan Province. Only the baby couldn't seem to settle down.

Well, these giants have been on the move since March last year, traveling approximately 500 kilometers from the nature reserve. And along the way, they have done a little bit of damage to homes and crops, totaling more than $1 million damage. That's what happens when we ruin their habitat.

Well, thanks so much for your company and for watching CNN Newsroom. I'm Anna Coren. World Sport is coming up next.

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