Return to Transcripts main page
First Move with Julia Chatterley
Musk Aiming to find Twitter Successor by "End of this Year"; China Denies Japan's Accusation of Airspace Infraction; Growing push to get Life- Saving Supplies to Quake Zone; Suntory Reports Record full Year Results; Delta CEO: Strong Demand Helping Offset Higher Costs; Pharrell Joins Louis Vuitton as Men's Creative Director. Aired 9-10a ET
Aired February 15, 2023 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
RAHEL SOLOMON, CNN HOST, FIRST MOVE: A warm welcome to "First Move", I'm Rahel Solomon in today for Julia Chatterley great to have you with us. Just
ahead on today's show dramatic rescue is still taking at this place in earthquake ravaged Turkey and Syria. The death tolls they're now surpassing
41,000. We're live with the latest.
Plus, a surprise development in U.K. politics Scottish leader Nicola Sturgeon announcing her resignation, Sturgeon is the longest serving
Scottish First Minister, she says it's simply time to move on. We have a live report. But first important economic out numbers just out in the U.S.
and they've come in surprisingly strong retail sales up by a much better than expected 3 percent in January.
That's after two straight monthly drops, sales excluding autos also beating expectations, Americans apparently still ready to shop despite a stubbornly
high inflation. As we found out Tuesday, consumer prices still not coming down as fast as the Fed but like food and energy prices in fact heading in
the opposite direction.
U.S. stocks are on track for a lower open as investors try to debate how the Fed will respond to all of this new data. You can see the DOW; NASDAQ
and S&P futures all off by about three tenths to half a percent. Let's call it economist fearing that the U.S. Central Bank will have to hike rates
much higher than expected in the months ahead.
Investors of course, had been hoping for a Fed rate hike pause. Let's get more on today's economic numbers. Paul R LA Monica joins me now. So Paul,
will you look at this report. Look, it's the biggest retail jump and almost two years what stands out to you? Where are people still spending strongly?
PAUL R. LA MONICA, CNN REPORTER: Yes, this was an amazingly strong report Rahel, you have to look at the fact that consumers clearly are willing to
go back out into the real world, if you will, and spend on things like dining out you saw the surge in the sales, retail sales numbers for food
and drinking establishments.
So people clearly willing to spend money despite the fact that inflation remains persistently high. And it was a very strong report across the board
across so many different categories like clothing, autos, it was very solid, but it's going to probably give the Fed more reason to raise rates,
as you mentioned, for a longer because they want to get inflation down and cool off the economy just a little bit.
SOLOMON: And we're so in the environment where good news is bad news. And I think this report falls squarely in that camp. Paul, I want to switch gears
a bit Elon Musk making some news saying that he hopes to find a successor for Twitter by the end of this year, finally putting a timeline on it. But
some analysts already slamming that timeline, essentially wondering, Paul, why so much longer?
MONICA: Yes, I think it is troubling to a lot of people who want to see Musk focus more on Tesla and maybe SpaceX, to be waiting this long to
potentially find someone to take over at Twitter. He tweeted a joke this morning. That is a Shiba Inu dog Floki is the new CEO. We know that even
though that'd be the cutest CEO in corporate America. It's not for real. Here's what he did actually have to say, at an event in Dubai this morning.
(BEGIN VIDEO CLIP)
ELON MUSK, CEO OF TWITTER: I think I need to stabilize the organization. And just make sure it's a financially healthy place and that the product
roadmap is clearly laid out. So I don't know I'm guessing probably towards the end of this year. Should we be good timing to find someone else to run
the company, because I think it should be in a stable position around the end of this year?
(END VIDEO CLIP)
MONICA: Now there are a couple of things to note there, Rahel. One, Musk is notorious for not meeting deadlines. He'd be a terrible journalist, even
though he's a great entrepreneur. And also, he has talked in the past on Twitter, most notably about no one in their right mind would want this job
because it's so difficult.
So is Musk really going to find a CEO by the end of this year? Or is he just going to throw in the towel and say, you know what, I'll just keep
running this like everything else that I've got on my plate.
SOLOMON: And critically important, will he be able to stabilize the company by the end of this year? Paul La Monica so many questions.
MONICA: Yes --.
SOLOMON: That's a big question, too thank you. Speaking of retail sales, we're actually going to speak to CNN Chief Business Correspondent Christine
Romans a bit more about retail sales coming up in about 30 minutes. Paul R LA Monica, thank you.
[09:05:00]
SOLOMON: Now to a dramatic announcement in Scotland, where First Minister Nicola Sturgeon has just said that she's stepping down. Sturgeon has been
facing increasing tension over Scottish independence as well as Westminster's decision to block a Scottish law to let people change their
gender without a medical diagnosis. She says she stands by the work that she's done.
(BEGIN VIDEO CLIP)
NICOLA STURGEON, SCOTTISH FIRST MINISTER: I am proud to stand here as the first female and longest serving incumbent of this office. And I'm very
proud of what has been achieved in the years I've been in Bute House.
However, since my very first moments in the job, I have believed that part of serving well would be to know almost instinctively when the time is
right to make way for someone else. And when that time came to have the courage to do so, even if too many across the country, and in my party, it
might feel too soon.
(END VIDEO CLIP)
SOLOMON: And Bianca Nobilo is with us now. Bianca, good to have you on the program! So what more she's saying about what led to this decision because
it feels like it came pretty abruptly?
BIANCA NOBILO, CNN CORRESPONDENT: That's what shocked people, Rahel. It was the abruptness of the decision. There's been chatter that perhaps Nicola
Sturgeon wouldn't be leading the party into the next election, which has to be January 2025, and Scotland at the latest, but the speed of this came
entirely unexpected.
Journalists were scrambling to be there for the announcement this morning. Now, the reasons that Sturgeon gave were a mixture of personal and
political, she did say that she wanted to spend more time focusing on Nicola Sturgeon, the person being able to see her friends and taking some
of the burden off her family.
She spoke about how the political climate had become more brutal in recent years, and that people perhaps don't understand the toll that that can
take. But her reasons were also political, and she said that she didn't want to be taking key decisions for the party if she wasn't 100 percent
sure that she'd be leaving it in months or years to come that she wanted them to be able to have a fresh start.
But of course, behind all of this Rahel, is inextricably linked to Sturgeon and the SNP the question of independence and whether or not sturgeons
continued role at the helm of government and the party is really the best thing to try and achieve that.
SOLOMON: Bianca, I wonder this is yet another example of a woman very high in politics stepping down. It makes you think of New Zealand's Prime
Minister stepping down last month citing burnout. Did Nicola say more about that, I know you just mentioned some of the stress of the job and maybe
focusing more on her personal life?
But that you say more about that, because it's hard not to make the connection when they've happened so quickly next to each other.
NOBILO: Yes, I think this is an important and interesting point. Obviously, perhaps more details will be revealed which might explain the sudden nature
of Sturgeon's decision. But if we learn nothing new, then we could perhaps interpret as part of a trend or perhaps normalization of the idea of
leaders stepping down and acknowledging when they feel burnout rather than clinging on to the very last having to be pushed out.
Like for example, Former Prime Minister Boris Johnson, all politicians that deny that they've lost an election. It's interesting that they are both
female leaders. As you mentioned, Ardern, who's in her 40s, Sturgeon is in her 50s, saying that she just didn't have enough gas left in the tank and
Nicola Sturgeon also talking about the fact that it does take a toll.
And I've been working in politics and covering politics for more than a decade. And there has definitely been a worsening of conditions in some
respects for members of parliament and politicians. Of course, people are justifiably critical of their leaders, but the fact that you can't escape
this criticism, whether it's trolling on social media, or concerns about your personal security, or the security of your family.
It's hard to ever get a break from it. And I think it is more all-consuming and all encompassing. And perhaps these two leaders have acknowledged that
and recognize that the political calculus means that they just not in the best position to achieve what's most important to them in that role.
SOLOMON: A lot to consider and a lot to think about. Bianca Nobilo, good to have you on the program today, thank you. Well, in the last few minutes,
the U.S. Defense Secretary said that he has not been aware and he's not aware of any additional objects in U.S. airspace in the past couple of
days.
It's after the U.S. shutdown three unidentified objects and a suspected Chinese spy balloon in recent days. Well, now China is vowing to retaliate
against the U.S. saying that it will take countermeasures against U.S. entities for violating its sovereignty and security and slapping Chinese
sanctions and Chinese entities with sanctions.
Ivan Watson is here now on the story. Look, Ivan, this story just continues to develop lots of moving parts here and now you have Japan saying that it
strongly suspects China has flown these types of spy balloons over its airspace.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Rahel, a growing number of governments saying that they think they've seen spy balloons over
their territory.
[09:10:00]
WATSON: Japan's Defense Ministry saying that between November of 2019 and September of 2021 that they detected three balloon-shaped objects that they
suspect were unmanned Chinese surveillance balloons. Not clear why they haven't said anything about that until now.
But Japan's Defense Minister has basically said that he does not rule out the possibility of shooting one of these out of the sky, if it's detected
again. The Chinese Foreign Ministry did not like this accusation, it firmly rejected this and accused Japan of participating in a smear campaign
against Beijing.
And of course, the tensions continue to between Washington and Beijing ever since that Chinese balloon was detected at the beginning of February,
flying nearly across all of the U.S. and then being shut down by a U.S. fighter jet. And last week, the U.S. slapping sanctions on 6 Chinese
companies linked to China's Military Aerospace Industry.
We heard this threat from China that it might take some kind of actions, unspecified, against entities in the U.S. that are threatening China, this
back and forth continues to go on where China has accused the U.S. of flying balloons over Chinese airspace something that Washington denies.
And that Washington says that it has seen a suspected Chinese spy balloons over dozens of countries across five continents. Not clear where his
controversy will take us next. But we're learning an awful lot about countries and their balloon programs right now, Rahel.
SOLOMON: And it's really interesting, Ivan, because it seems the tone from China has really changed since the beginning of this discovery. And
initially, it started with confusion about the balloon and it has grown increasingly more aggressive.
Ivan, China's top diplomat now in Europe as part of an 8-day trip, which as I understand that will also include a trip to Russia, a bit of a balancing
act here. Ivan, on the one hand, trying to boost relations with the West, on the other hand, trying to maintain its close ties with Moscow.
WATSON: That's right and Wang Yi, the most Senior Chinese Diplomat he's been in Paris, he's been meeting we believe, the French President Emmanuel
Macron. You know, China's reputation has taken a hit in Europe in recent years for a number of different reasons.
It hasn't helped, of course, that it has refused to condemn Russia's invasion of Ukraine. And just weeks before that invasion, in February of
last year, the Chinese and Russian leaders stood side by side and declared that they had a friendship, a partnership with no limits.
So not only is Wang Yi visiting France, but he will also visit Italy, Hungary, which has taken a much softer position on Russia's invasion of
Ukraine. And he is expected to address the Munich Security Conference this weekend. And that's going to be attended by NATO countries that are rushing
weapons like tanks and anti-aircraft defenses to Ukraine.
So it'll be interesting to hear what kind of align he will take at that meeting. And then he's expected to go meet with senior Russian officials in
Moscow as well. That's coming up to the one-year anniversary of this disastrous war. One final note, Rahel, U.S. Secretary of State Antony
Blinken will also be at that Munich Security Conference.
We're not sure whether or not it's possible these two officials could meet. Blinken had to postpone his visit to Beijing, because of the controversy
over the Chinese balloon over the U.S., Rahel.
SOLOMON: Critically important point, Ivan that discovery was I think days before that visit and so lots to watch here and a lot to watch from that
trip. Ivan Watson thank you. To Turkey and Syria now where the death toll they are has climbed to more than 41,000, that's after last week's
earthquake.
Even amid despair and debris though hope rescuers are still finding people alive in the rubble. This woman here was rescued 203 hours after buildings
came crumbling down and take a look here. This woman was saved 212 hours after the quake hit. She was hugged by family members who had been waiting
at the scene of her rescue.
These are just some of the stories of survival amid unimaginable loss. But now survivors are also coming to terms with a painful new reality. Nada
Bashir joins me now from Istanbul with more. Nada, what is the latest here because we know the need there still remains quite large?
NADA BASHIR, CNN REPORTER: Absolutely, there is a huge need for those impacted by the earthquake. But that search and rescue mission is still
continuing. You mentioned two cases there we are still seeing survivors being pulled out of the rubble.
According to state media, a woman and her two children have now been rescued 228 hours after the earthquake. And so there is still some hope
that more survivors could be rescued. But of course the window for finding survivors is closing very, very quickly.
[09:15:00]
BASHIR: And there is now more of an emphasis on providing support to those who have survived into those of course lost everything in that earthquake.
There has been a huge groundswell of support across the country and internationally and we've seen that here in Istanbul.
We've seen people from the Southeast being evacuated to the city huge A- distribution centers being set up and we were able to visit one family who had to flee their home seconds before it collapsed and are now resettled
here in temporary accommodation in Istanbul. Take a look.
(BEGIN VIDEOTAPE)
BASHIR (voice over): More than a week on and the scale of the destruction is still difficult to grasp. The landscape permanently changed, the death
toll still rising. Those who made it out alive now grappling with a devastating new reality for Semir and Amal; it is a reality that's painful
to come to terms with.
They fled their apartment with three-year-old Lena, and seven-year-old Yusuf seconds before the building collapsed. Now they found temporary
shelter in the home of one generous Istanbul resident living overseas, but their trauma is difficult to overcome. And memories of the quake still
haunt this family.
SEMIR CEKIC, EVACUATED FROM QUAKE ZONE: Our friends and relatives are still under the rubble. The whole family is gone.
AMAL CEKIC, EVACUATED FROM QUAKE ZONE: Yusuf tells me mom, I don't have a room. I don't have a house, no toys, and no friends. I want to go back to
school. Lena is constantly crying. She's my only daughter. She's changed a lot.
BASHIR (voice over): The chances of finding survivors beneath the rubble are getting slimmer by the hour. But in Turkey, hope persists with more
miraculous rescues over the past 24 hours. But as the days passed by, the focus is shifting to recovering the dead and helping the living.
BASHIR (on camera): But as you can see here, these volunteers have formed a human chain to carry these boxes of donations into this truck. They're
being loaded. Ready to leave this distribution center in Istanbul head straight start these tagging.
According to coordinators at this center, there are some 20,000 volunteers working around the clock across two centers here in Istanbul. They've been
working for the last week sorting through thousands of boxes of donations all ready to be sent to people impacted by the earthquake.
BASHIR (voice over): The coordinators here say they need more support and fear they will be forgotten by the international community.
BASHIR (on camera): Do you scared when it happened?
UNIDENTIFIED MALE: Yes.
BASHIR (on camera): Scary?
UNIDENTIFIED MALE: Very.
BASHIR (on camera): Very scared?
UNIDENTIFIED MALE: Yes.
BASHIR (on camera): And well, acts of generosity may go some way to help for those who have lost everything. The rebuilding is just beginning.
(END VIDEOTAPE)
BASHIR: Look Rahel, there is a huge challenge ahead for the Turkish government to provide support to the thousands of people now left
vulnerable following that earthquake. And also of course, there are huge infrastructural challenges as well. Authorities now saying there are some
50,000 buildings that are unsafe and needs to be demolished immediately.
SOLOMON: This cannot even imagine what the road ahead will look like and how long it will take? Nada Bashir, thank you. For the first time in a
week, the Turkish stock market open for trade today had been closed due to the quake disaster, the main Turkish stock index rising almost 10 percent,
9.8 percent there.
Investors say that government efforts to help prop up prices were responsible for the move higher. And we'll have more "First Move" after the
break.
(COMMERCIAL BREAK)
[09:20:00]
SOLOMON: Welcome back to "First Move", where we're looking at some of the latest global earnings. Japanese beverage giants Suntory home to brands
like Orangina, Maker's Mark and Jim Beam reported a record four-year revenue and profit. And that's despite global economic challenges including
the pandemic rising oil prices and a spike in supply chain related costs.
Revenue jumping more than 16 percent to nearly 3 trillion yen and its alcoholic beverages segment Beam, Suntory achieved record sales like many
companies around the world. Suntory is also supporting relief efforts after the deadly earthquake in Turkey. Joining me now is Takeshi Niinami; he is
the CEO of Suntory holdings. Welcome to the program, welcome.
TAKESHI NIINAMI, CEO OF SUNTORY HOLDINGS: Thank you for having me this morning.
SOLOMON: Yes, so congratulations on the quarter walk me through some of these numbers in terms of the food and beverage segment. What trends are
you seeing there that led to those strong numbers?
NIINAMI: Oh, definitely, we've performed pretty well in the United States and Asia, including Japan, and emerging Asia. And India did a great job
because a lot of people started to drink high end up beverages and the Europe as well. So all over the world, except that the huge challenges we
face to like, our supply chain challenges, but we overcame pretty long. So I just feel so proud of my people, thank you.
SOLOMON: Congratulations and let's stick with spirits because I saw that spirits grew more than 20 percent year over year, according to the report.
Does that tell you anything about the health of the consumer or I wonder do spirits do well in times of economic growth, but also times of economic
downturns as well? Does it tell you anything about the health of the consumer?
NIINAMI: I think the consumer confidence has been a bit the waning, that's a concerning that population level has been slipping up a little bit. And
we see some discount campaigns in these standard alcoholic beverage businesses. But a silver lining is the trading down has not been seen as
significant. So I don't see that will happen. So still, the market is resilient and I think consumers still love about premium spirits.
SOLOMON: Certainly benefiting brands like yours. Take - let me ask in terms of the Japanese, your Japanese employees, many, as you know, haven't seen a
wage increase in decades. Help me understand how Suntory is trying to change that in terms of wage increases and what the plan is there?
NIINAMI: First of all, Suntory and asked to raise the wages by at least 6 percent which means it could be 7 percent to support our employees. The
reason behind this, the inflation is around the focus set, which is causing to get the other people suffering from disinflation, so people are
suffering from this inflation.
And I think our announcement as well as other you know, beer companies are creating kind of ripple effect to the other major corporations are key
thing is whether SMEs can follow this trend will note that's a huge issue because 70 percent of Japanese labor force comes out of SMEs.
[09:25:00]
NIINAMI: So SMEs must increase wage high I mean wages so that the Japanese economy will be better off.
SOLOMON: I know you mentioned that inflation is hovering around 4 percent. I wonder do you think 6 percent is high enough to be competitive, because
there are other large Japanese companies. I think fast retailing is one of them that are increasing wages much more significantly. I think the number
there was up to 40 percent. Is 6 percent, enough?
NIINAMI: I think it's on average and they depend on the structure of the pay scale. And a 6 percent is very much competitive. But I think it depends
on how people performed and the 6 percent on average. I think some people can enjoy the run 20 percent, some people 10 percent and some people 5
percent.
So at least, I think, 3 to 4 percent to cover the amount that they suffer from the inflation. That's a guarantee. We call that's based on the salary.
SOLOMON: And Take, I want to ask before I let you go I know Suntory is also trying to help with relief efforts in Turkey. Help me understand what your
company is doing to try to help the people there?
NIINAMI: First of all, we don't have big businesses there and first of all, I like to express my deepest condolences to those who lost the families and
friends. And we have announced that you donate around $280,000 to those who are in need.
SOLOMON: $280,000 where every dollar counts. Takeshi Niinami, excuse me, the CEO of Suntory, thanks for being on the program today.
NIINAMI: Thank you.
SOLOMON: He is the CEO of Suntory. I'll have more "First Move" after the break.
(COMMERCIAL BREAK)
[09:30:00]
SOLOMON: Welcome back to "First Move". Major flight delays and cancellations as German airline Lufthansa suffer a massive IT outage. The
company says that all departures and arrivals and Frankfurt had been suspended until at least early evening. Lufthansa says that the problem was
caused by damage to fiber optic cables during construction work in Frankfort.
Meanwhile, Delta Airlines saying that strong demand is helping offset higher costs, the company announced a 5 percent raise for its workers last
week. CEO Ed Bastian told our Richard Quest, why his staff deserves it.
(BEGIN VIDEOTAPE)
ED BASTIAN, CEO, DELTA AIR LINES: Our people are the ones that got us through this challenging time, it was an incredible year of creating
stability in the U.S. Air travel system. And now we're moving more globally, as we end the year and going into 23. Cost pressures are
considerable.
There's cost pressures across every class of costs, you could imagine, particularly commodity costs with fuel prices still meaningfully above
anything that we were dealing with pre-pandemic. And as a result of that, we need to continue to be more efficient, we need to continue to ensure
those costs of production make their way into pricing and they do.
At the present time, the demand has also been strong. So to some extent they're connected. The inflationary pressures are partly due to the amount
of money that's out there in the system that consumers are sitting with, which enables us to continue to advance our revenues in terms of having
pricing keep up with those inflationary costs.
RICHARD QUEST, CNN BUSINESS CORRESPONDENT: You clearly do have pricing ability; you have the ability to recoup some of the higher costs of
operations through the fairs.
BASTIAN: Well, we need to, we need to, we can't justify growing our business, if we're not able to cover the cost of that growth and of that
business. We are seeing as you know an amazing rebound in demand on the consumer front. The demand we were seeing here in the U.S. is unlike
anything I've ever seen in my 25 years in this business.
And fares are continue to be quite healthy because of that, combined with the fact that it's also difficult. Well, relative to capacity, the OEM
challenges are getting new planes, the training requirements to get pilot staff properly. So as a result of that, we're in a kind of a great
equilibrium between supply and demand, which enables us to pass through those cost pressures in terms of pricing.
QUEST: You were blunt, in your criticism of bureaucracy and air traffic, navigation and air traffic control from the bureaucratic side, over the ATC
failures. And at the same time, the infrastructure snafus that just prevent the U.S. aviation industry from growing as perhaps it would like to.
BASTIAN: The system is fragile, by the way, it's not just in the U.S., it's in Europe, it's in other parts of the world as well. Anytime you take
system as complex and as large as the air traffic system globally, and essentially shut it down for the better part of a year and a half and then
start to bring it back up again. It's hard, it's hard on your people, it's hard on your customers, it's hard on the authorities, the regulators.
So I think there is a there's an element of we all need to be understanding that said, we need to get the investments that for the long term to improve
the infrastructure. We're doing it with respect to our business model. We need our government partners to be doing it with respect to infrastructure
that we ride on the backs of.
QUEST: If you look at your expansion, you've got the domestic network really up and running quite nicely now. And your main trunk routes and your
main internationals are a solid. So what do you grow? Which part of the world you like the look of?
BASTIAN: Well, the growth that we're implementing this year is to Europe, the Transatlantic. Interestingly, despite some of the economic challenges
in Europe, we're seeing the greatest demand, again we've ever seen even stronger demand to Europe than within the United States itself, will be
operating this summer, probably a 20 percent greater amount of capacity or supply across the transit line than we did pre-pandemic.
So you can see the significance of that. The next thing clearly is China. We're all watching to see what's going to happen there. We know when China
really does open up, there's going to be an enormous amount of demand both into and out of China. And we're going to do our very best to be prepared
for that.
[09:35:00]
QUEST: How have you done it? I mean, how have you managed to have these investment jayvees, or much smaller investments made it to Mexico, Ericsson
Islands, or Virgin, which is a long one. And you've managed to make them work.
And I'm not being unduly flattering to you. But you have managed to make them work. Whereas anybody who studied this industry knows that the history
of one airline, buying a minority stake or an investment in the other usually means you lose your shirt.
BASTIAN: Well, the investments that we made or not to invest in Airlines for the sake of airlines. If that was the case, we would buy more of our
own airline and grow and grow Delta. We know international travel is the future. We know long term, the U.S. marketplace is going to get fairly
constrained over the next decade, there's a not new place to fly within the U.S. or new markets.
We're building bigger airplanes and maybe bigger airports, but the air traffic, the congestion in the sky is going to restrict how much additional
growth we can have. But the world at large, that's our opportunity. And by investing in our partners, we have a seat at the table inside the boardroom
inside the management team of these companies to ensure that we're doing the right thing for our joint customers.
(END VIDEOTAPE)
SOLOMON: And outside not the only travel related firms seeing continued strong consumer demand. Airbnb reporting its first ever annual profit, it
says that bookings for vacation rentals remain strong. It's also up in its first quarter revenue forecasts. The consumer truly front and center on
Wall Street today, the U.S. reporting a surprisingly strong read on consumer spending up 3 percent in January.
Let's take a look at the market reaction. U.S. stocks are lower across the board DOW, NASDAQ, S&P all off by about half a percent, the NASDAQ is off
one quarter of a percent. A resilient consumer willing to pay higher prices will only make the Feds inflation fight harder in the months ahead? That's
what you're looking at in the market reaction.
Deutsche Bank predicting that the U.S. central bank will hike borrowing costs not only in March and May but also in June and July as well. The hope
had been for a Fed rate hike pause by the summer. Christine Romans joins me now. Christine, good to have you on the program! So help me understand what
we think is behind the strong numbers. Is it the strong labor market? Is it cooling inflation? What do you think?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: It's a whole bunch of things. It's also warmer weather in the northeast; it's also increases in
the minimum wage and also increases in social security benefits tied to inflation. So social security checks were a little bit higher, there was
deep discounting after the holidays. So they were sales that Lord people to buy things they might have put off at the end of the year.
So you see this roaring back of consumer spending, even accounting for inflation. This isn't just higher prices for what you're paying for things,
its higher prices and buying more of it. And this is the strongest growth we've seen from month to month since March 2021. So the feels, to me a
little like reopening kind of euphoria, food, bars and restaurants for cars.
So there's some pent up demand for cars. So that's part of this number is a car sales. So that could be temporary. I mean, you don't buy a new car and
then buy another new car, right. So that could taper off a little bit here, but certainly a strong number overall.
And 6.4 percent year-on-year, I mean, again, outstripping really kind of inflation. So it's a lot of different things at play here. And you know,
I've been looking my sources, you know, emailing, you know, this is a stake in the heart of recession fears. Another one says a surge in sales eases
the first quarter recession fears.
I mean, this is not recessionary kind of behavior. And of course, that means the Fed will have to step in, and maybe be more aggressive because
these, this consumer is defying gravity, no matter what they say in the polls, that they feel terrible about the economy, they're still spending
money.
SOLOMON: They may feel terrible, but they're still spending to your point and, you know, sort of pushes off the conversation of a recession right
now. But you have some like Deutsche Bank saying it means a harder landing at some point because of what the Fed will have to do. Christine,
unfortunately, we'll have to leave it here. Thank you.
ROMANS: Nice to see you.
SOLOMON: Christine Romans there. And from Wall Street to the rest of the world, the World Trade Organization says that trade volumes will increase
by just 1 percent this year, is a significant drop on last year's three and a half percent. As part of our series connecting Africa, Eleni Giokos spoke
to the Head of the World Trade Organization to ask about what this means when it comes to Africa's prospects.
(BEGIN VIDEOTAPE)
ELENI GIOKOS, HOST, CONNECTING AFRICA: Ngozi Okonjo-Iweala, amazing to see you again. Trade is synonymous with globalization. But globalization for
the last few years has been vilified. Could you break down for us just how important trade is in poverty alleviation specifically in the African
context?
NGOZI OKONJO-IWEALA, DIRECTOR GENERAL, WTO: There's a lot of talk of vilification of globalization. Yes, trade is part of it, is not all of it.
But trade we cannot live without trade. Trade is what moves goods from one part of the world to another. Trade it is what helps us to be resilient.
[09:40:00]
OKONJO-IWEALA: So in the African continent on the European continent or the U.S., you cannot have everything you need to survive. That means that you
need to get it from some other parts of the world. And that's why we need trade. And in spite of all the talk about the demise of globalization, they
still robust trade among countries, among all us, one since the four member countries going on.
Let's say that globalization has helped to lift more than 1 billion people out of poverty, we shouldn't forget that. But there's also no doubt that
not everyone benefited. There were poor people in rich countries that were left behind when manufacturing or other jobs were taken. And the poorer
countries are many on our continent that have not yet benefited.
But does that mean that we cannot benefit in future? The answer is no, I think we need a new type of globalization. I call it re-globalization that
is going to benefit our countries by pulling in all those who are left behind.
GIOKOS: The year ahead for the continent, what are you expecting?
OKONJO-IWEALA: We have forecast that trade; global trade is going to be to fall to 1 percent this year 2023 from 3.5 percent, the growth in global
trade is going to fall dramatically. So that feeds into the forecast from the IMF, the World Bank, the African Development Bank, or the multilateral
showing that we are heading for very low growth, perhaps recession in some parts of the world, in the coming year.
And once we have that, of course it impacts on the continent. What I would say is, look, there are also countries on the continent that are not doing
badly. And what we need to do is look, look at these opportunities to support the bright lights on the continent, and try to make those things
work for us.
(END VIDEOTAPE)
SOLOMON: And finally, on "First Move" musician Rob Williams certainly has something to be happy about. Pharrell is joining luxury brands. Louis
Vuitton is the new creative director for Menswear. His resume boasts not only music but collaborations with brands like Adidas and - seems like a
fitting match. And that is it for the show. I'm Rahel Solomon, Marketplace Asia is up next.
(COMMERCIAL BREAK)
[09:45:00]
(BEGIN VIDEOTAPE)
KRISTIE LU STOUT, HOST, MARKETPLACE ASIA (voice over): Fun and Games on Hong Kong's Harbor front. This Carnival is back open for the first time
since before the COVID 19 pandemic. In its first three weeks, the funfair attracted around 90,000 visitors, including tourists from Mainland China,
organizers say. In early 2023, China reopened its borders.
Outbound Travel Bookings on trip.com is Chinese platform rose 640 percent year-on-year over the Lunar New Year holiday in January, the company says.
And destinations in Southeast Asia especially were on --.
STOUT (on camera): Sandiaga Uno is Minister for Tourism and Creative Economy in Indonesia, Southeast Asia's largest economy. We discussed
recovering the tourism sector as strategies for 2023. Plus Fast Food Innovation, we discovered the complex digital strategies behind viral pizza
toppings in Taiwan. I'm Kristie Lu Stout, and this is Marketplace Asia.
STOUT (voice over): Jogjakarta known as the soul of Indonesia. The region on the island of Java is famous for its volcanic skyline, ancient temples
and traditional arts. In early February that was on display at the Association of Southeast Asian Nations tourism forum.
It is the region's biggest annual tourism event, and the 2023 forum marked the start of a promising year for the sector. Indonesia's Minister for
Tourism creative economy Sandiaga Uno tells us what the future holds.
SANDIAGA UNO, MINISTER OF TOURISM AND CREATIVE ECONOMY, INDONESIA: After a very difficult two and a half years, we will recover better, we will
recover stronger.
STOUT (on camera): Before the pandemic China was a major source of revenue for the tourism industry in your country. So how is Indonesia rolling out
the red carpet for Chinese travelers?
UNO: Before the pandemic, China contributed as the second largest number of foreign visitors from the pre-pandemic number of around 2.5 million. We are
starting with a modest target of 255,000 Chinese tourist's arrival this year. As we ramp up number of flights, as we continue to roll out packages
that we will offer to our Chinese tourists, we are very optimistic.
STOUT (on camera): How does the risk of global recession threaten the recovery of Indonesia's tourism sector?
UNO: We believe with the slowdown in some of the key economies. We need to focus on the growing markets such as India, China, and also within ASEAN.
Indonesia itself will grow north of 5 percent this year. And we will have to focus on the backbone of this robust recovery by the movement of
domestic tourists. And we will focus on the quality aspects, people who would stay longer in destinations and better quality of spending into the
local economies.
STOUT (on camera): And when you want to attract better quality tourists, tourists who would stay longer and spend locally, how is your strategy
changing?
UNO: It is evolving immensely. It's doing a fundamental shift from the 3S of Sun, Sea and Sand to a new 3s of Serenity, Spirituality and
Sustainability. Borobudur, which is in Central Java, the largest Buddhist temple Mandalika, whereby you have the Moto GP and the pristine beach, side
by side - eco-tourism heaven that is now focused on conservation based tourism that has Komodo in the Komodo Island.
These hidden gems located in some of the most beautiful spots in the country and it is not suitable for mass tourism. So we have for a specific
area, an integrated tourism master plan that would basically limit the number of tourists. The infrastructures will have to be sustainable.
STOUT (on camera): A number of international visitors and potential international visitors to Indonesia have questions about new legislation
that was recently passed in your country. In December of 2022, Indonesia passed legislation that band cohabitation and sex outside marriage, it's a
law that applies to overseas visitors as well.
[09:50:00]
UNO: We guarantee the private affairs of tourists arriving into Indonesia will be protected, as simple as that, Kristie. And I have fed up across
ministries and across government task force to ensure that hotels will not impose this law because this is a wrong interpretation of the law. Tourists
when they arrive, Indonesia will be able to carry out their tourism activities safe, well protected and not going to be disturbed.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
STOUT: No trip to the funfair would be complete without some delicious carnival snacks. Now this is a twist of a Hong Kong street food classic,
The Egg Waffle or with seaweed and --poor plus inside and can't wait to dig into it. Now the fast food space is well known for experimenting with
unusual flavor combinations. But there was just one pizza chain in Taiwan, that's taking fusion to a whole new level. My colleague Will Ripley has
more.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): A piping hot slice of pizza one of life's simple pleasures. Personally, there's
nothing I love more than double pepperoni with extra cheese. But when I pick up a pie in Taiwan, some of the toppings they offer are a little
unusual. This one's the white filling Oreo and this is the dark chocolate Oreo.
Pizza Hut Taiwan has been tickling taste buds and trending on social media, putting unexpected ingredients on limited edition pizza, including pig's
blood cake, bubble tea and Oreos. The chain says these pizzas regularly go viral selling out. But they're not just for shock value. Pizza Hut Taiwan's
General Manager Antony Leung tells me bizarre flavors are big business.
ANTONY LEUNG, GENERAL MANAGER, PIZZA HUT TAIWAN, JARDINE RESTAURANT GROUP: A lot of travelers are coming to our website. And we find actually both
Taco Bell and Trova has reached to the peak level that we used to have Chinese New Year and Christmas. So it's like how the whole thing start to
turn around a business from, I would say very little flat growth to double digit growth.
RIPLEY (voice over): Pizza Hut Taiwan started releasing its limited flavors in 2019. Leung says they allowed the company to grow during two years and
COVID-19 dining restrictions. It reflects the success of fast food in Taiwan during the pandemic. Government figures showed fast food sales
rising by 5 percent in 2021, despite a 40 percent downturn in the wider food and beverage industry.
LEUNG: I will tell you all this pizza first without advertising, so we just put on social.
RIPLEY (voice over): Besides using social media to spread the word about its surprising creations. The company also tracks buzzy online food trends,
finding out which ingredients they should try in their pizzas and taking inspiration from Taiwan's night markets, hubs of traditional flavors and
culinary innovation. I'm with Vegan Chef Adrian Wu on the hunt for one special topic in particular.
RIPLEY (on camera): We are on a sinking ship from mission.
ADRIAN WU, CHEF: That's the only one at this corner.
RIPLEY (on camera): Is it good? Is it stinky? Is it super stinky? So let me ask you this, OK. You've traveled all over the world. Have you ever found
anyplace in your travels that compares to the feeling that you get when you come into a night market in Taiwan?
WU: Well I would say it's the fault of food, that the food you're familiar with. Because like every time I'll get different countries, they have their
own specialties.
[09:55:00]
RIPLEY (voice over): Pizza Hut Taiwan is one of many international food brands trying out new local flavors, covering their bases amid economic and
supply chain challenges. The company wants to shift the way people think about pizza as a whole, from a shared novelty food to more every day
personal choice.
GRACE CHIANG, OPERATION DIRECTOR, PIZZA HUT TAIWAN: We want to be - sales of other mainstream pizza through the increased talk ability. We hope to
make customers come back more frequently, from three months to two months to every day.
RIPLEY (voice over): That's the thinking behind this new takeaway focus Pizza Hut restaurant in Taipei, the main focus ordering with a QR code
watching your pizza being prepared, taking it home with you or getting it delivered like - pizzas here. So I'm giving it a go in ordering a surprise
new flavor.
RIPLEY (on camera): Fish and chips, we might as well just dig in here. Surprisingly good, I'm not just saying that because it's on TV looks
actually pretty good. It's not my double pepperoni. But you know we've got a little, little.
(END VIDEOTAPE)
STOUT: Now there may not be pizza on the menu. But across Asia and early spring it is a time of indulging in food and in leisure. Now the spectacle
that you see around me is all done to celebrate 2023 The Lunar New Year, The Year of the Rabbit. And on this month segment of in the market, we take
a look at the most important festival on the Chinese calendar.
(BEGIN VIDEOTAPE)
STOUT (voice over): Red Lanterns, symbolic fruits and banners bearing auspicious messages. After three years of anti-COVID restrictions, families
here in Hong Kong hoped for good fortune as they brought in the 2023 Lunar New Year.
Traditional festivities also include eating longevity noodles, which symbolizes long life. One noodle maker in Hong Kong says business was up 20
to 30 percent ahead of the holiday period, which began in late January.
TANG PUI SUM, DIRECTOR, YAU KEE NOODLES: Many people including families and companies will gather and eat together before and during Lunar New Year,
and they would have longevity noodles on these occasions.
(END VIDEOTAPE)
STOUT: And that is it for this month's show. Thank you so much for watching. For more on these stores and others, just check out our website
you go to cnn.com/marketplaceasia. I'm Kristie Lu Stout here in Hong Kong. Thanks for joining us. I'll see you next time.
(COMMERCIAL BREAK)
[10:00:00]
END
