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Negotiations Ongoing in Effort to Free 17 Missionaries; War Escalates as Ethiopia Conducts More Airstrikes; Evergrande Stock Falls After Property Management Deal Fails; Colombia Works to Ramp Up Pot Exports; South Korea Launches First Domestic-Made Rocket; One Win Away from the World Series. Aired 4:30-5a ET

Aired October 21, 2021 - 04:30   ET

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

[04:30:00]

ISA SOARES, CNN ANCHOR: Welcome to CNN NEWSROOM. I'm Isa Soares. If you're just joining us, let me bring you up to date with the top stories this hour.

Authorities have found what they say are human remains in the search for Gabby Petito's missing fiancee Brian Laundrie. The family's attorney said it's very likely the remains are Laundrie's.

And U.K. doctors -- a U.K. doctors union says the British government is willfully negligent -- their words -- in handling the pandemic amid a surge of new cases. We'll continue to follow these stories throughout today right here on CNN.

Now, negotiations to free 17 missionaries kidnapped in Haiti will stretch into another day, the power grab for 400 Mawozo is demanding $17 million to release the group. But some are warning against paying such a large ransom. CNN's Joe Johns is following developments from Port-au-Prince.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: The wait is for information on the American missionaries who were snatched off the road near Port-au- Prince here in Haiti on Saturday. At last report, the kidnappers were asking for $17 million. That's $1 million each for every man, woman and child they took.

I spoke to Father Rick Frechette. He is a Catholic priest that's best known for the medical care he gives to sick children here. But also, has been called in repeatedly to help deal with kidnapping cases, including four cases involving the group that is alleged to have created this latest situation. He said he's very concerned that if a large ransom is paid, it could mean a price on the head of other Americans in this country.

FATHER RICK FRECHETTE, FOUNDER, ST. LUKE FOUNDATION FOR HAITI: If there's big ransom paid for these people, you can kiss all of us good- bye. Because there's not go to be hope for anybody. An 8-month-old child is in their hand, a 3-year-old child is in their hands, And it's different. And it's taking on a whole symbolic -- it's taking on a symbolic nature that the individual cases haven't had.

JOHNS: More information also is slowly trickling out about the mission of these missionaries in Haiti. We're told that of late, they had been helping people whose homes had been destroyed in the last earthquake to rebuild.

Joe Johns, CNN, Port-au-Prince, Haiti.

(END VIDEOTAPE)

SOARES: Now, North Korea is accusing the U.S. and the U.N. of tampering with a dangerous timebomb. That's the new response to a Security Council meeting Wednesday to discuss Pyongyang's latest submarine launched missile test. Ireland, Estonia and France are strict enforcement of existing sanctions against the law. And the U.S. ambassador in the U.N. says Washington hasn't given up on diplomacy, take a listen.

(BEGIN VIDEO CLIP)

LINDA THOMAS-GREENFIELD, U.S. AMBASSADOR TO THE UNITED NATIONS: These are unlawful activities. They are in violation of multiple security council resolutions and they are unacceptable. Each new advancement of the DPRK's weapons of mass destruction and ballistic missile programs destabilizes the region and threatens international peace and security.

(END VIDEO CLIP)

SOARES: Now, experts say this latest launch and the latest of a hypersonic missile last month. It could make North Korea a much bigger threat to the U.S. forces in the region and allies of course including South Korea and Japan.

I'll stay in the region. U.S. President Joe Biden's nominee to be ambassador to China says he's concerned about signs that Beijing can be building up its nuclear arsenal. Nicholas Burns told Senators that the confirmation hearing that he favors a long-standing one China policy but wanted Beijing to stop bullying Taiwan. And Burns had this assessment of China's capabilities.

(BEGIN VIDEO CLIP)

NICHOLAS BURNS, U.S. AMBASSADOR TO CHINA NOMINEE: There's no question in the 21st century, given the Chinese power -- and we've talked about that this morning -- China is the greatest threat to the security of our country and of the democratic world.

(END VIDEO CLIP)

SOARES: Meanwhile, President Biden acknowledged his concerned about China's reported test of a hypersonic missile launched in space. China claims it was a spacecraft, not a missile.

Now, the conflict Ethiopia's Tigray region is escalating with another day of air strikes on Wednesday. Black smoke blanketed part the regional capital Mekelle. The government says their strikes target weapons sites used by the Tigray's People's Liberation Front. But the TPLF said the strike hit residential areas and injured civilians. Reuters report that the government also carried out a second strike about 80 kilometers away.

Let's get more in the story. David McKenzie is in Johannesburg with the latest. Good morning to you, David. What is the Ethiopian government saying this hour about these air strikes and those claims by the TPLF that civilians were targeted here?

[04:35:00]

DAVID MCKENZIE, CNN CORRESPONDENT: Well, Isa, the government is saying that they struck armed caches of the TPLF in an industrial area of Mekelle, the regional capital in Tigray. Now, it seems like there might be a bit of a combination where the truth is. Because eyewitnesses told CNN that, yes, these air strikes which resulted in these black acrid smoke in footage obtained by CNN, blanketing parts of the Mekelle, was near an industrial area but at least some civilian areas including a hotel were damaged. We couldn't independently verify that.

Earlier in the week there were also air strikes in the outskirts of the capital where at least three children were killed and several injured according to the United Nations. Now, this shows after relative calm in the capital since midyear where the TPLF retook Mekelle, that there might be this this escalation with airstrikes, potentially laying the groundwork for a full re-invasion by Ethiopia's forces.

All of this is happening, Isa, while there's an ongoing humanitarian crisis in that northern part of Ethiopia. According to the U.N., more than 5 million people need assistance, and there is pockets of famine because of a lack of access to aid. Which has by many accounts been accusing the Ethiopian government for blocking that aid assistance. Around 100 U.N. staff have been evacuated according to the Secretary- General, because of this latest round of air strikes and insecurity. But they say they're doing the best they can. But the need for more help is definitely needed for a very desire situation -- Isa.

SOARES: Yes, very troubling indeed, the developments unfolding there. David McKenzie do keep us posted. David McKenzie there for us in Johannesburg.

And still to come right here on the show, Colombia is hoping to play a bigger role in the medical marijuana industry and what could for some of the nation's farmers. Take a listen.

(BEGIN VIDEO CLIP)

STEFANO POZZEBON, JOURNALIST: Just standing in a place like this, in a country like Colombia, only ten years ago would have been completely unimaginable. And that is the idea of how profound this turnaround is not just for the economics but also on social terms.

(END VIDEO CLIP) (COMMERCIAL BREAK)

[04:40:00]

SOARES: Now, shares of Chinese real estate giant Evergrande plunged today after news that a multibillion-dollar deal for control of its property management unit fell through. Have a look at the stock. The beleaguered company's stock finished down more than 12 percent in Hong Kong. At one point though, it hit as low as 14 percent. It is actually off about 80 percent for the year. Evergrande is trying to restructure $300 billion in debt, by selling off assets including a partial stake in its electric vehicle and office tower in Hong Kong.

Selina Wang is standing by live for us in Tokyo with much more. And Selina, Evergrande clearly hoping to sell this stake in this property service, that clearly didn't go through. Hence, why we see the reaction on the stock front. This doesn't bode very well though for the company and indeed for China's property market here?

SELINA WANG, CNN CORRESPONDENT: Not at all, Isa. I mean, this is a huge setback for Evergrande. And while it's shares were halted, investors were waiting for the deal to go through with Hopson Development, another real estate firm in China, divide this 51 percent stake for about $2.6 billion but they couldn't agree on the terms of the deal. And as you say, Evergrande has been desperately trying to sell off different assets but they haven't had much luck in finding buyers. So, the big question is, where does Evergrande go from here and how does it sort through this mountain of $300 billion in liabilities.

When I talk to analysts, they say they do expect Beijing to ultimately bail out this company, while making it look like it was done through the private sector. Even though Beijing has a hand behind it. And the reason why, Isa, is because the stakes here are enormous for Beijing. This is now the biggest risk to China's economy. It sent shock waves throughout global financial markets. It's also fueling risks and concerns of contagions throughout China broader economy. We already have several other property developers saying their also struggling to pay off their debts.

And what's happening to China's property sector is crucial here. This sector has supercharged China's economy. It now accounts for as much as 30 percent of China's GDP. And about three quarters of China's household wealth is tied up in the property sector.

But Beijing here is in a tricky position. Now most analysts agree that this probably isn't China's Lehman moment, and authorities are going to prevent a complete collapse. But the question is, how they successfully contain this risk while also still sending a strong message to other players in the sector that they need to rein in this successive borrowing.

And so, what really matters here is what this shows about China's leadership moving forward. It shows that this high-growth economic model that was powered by the property sector, powered by massive amount of debt is no longer viable and that China sees it as a risk to the party rule and as a risk to the country -- Isa.

SOARES: Yes, and of course the concern is of a ripple effect with other property giants in the country. We'll stay on top of that. Selina Wang, really appreciate it. Selina Wang there for us in Tokyo. Thank you.

Well meanwhile, in the U.S., all eyes are also on the supply chain backlog. California's governor trying to fix the issue of congestive ports of scores of cargo ships wait anchored offshore. Have a look at this. Gavin Newsom signed an executive order on Wednesday directing state agencies to find land for short-term storage for 200,000 containers currently on board those cargo ships. There are even more ships and containers docked in the city of Long Beach, about 40 percent of all U.S. imports are processed between those two ports.

Now, all stocks have been retreating just a bit in the past few hours. In fact, that's after getting a seven-year highs for the fifth day in a row on Wednesday. U.S. Crude jumping up over 1 percent closing at almost $84 -- you can see there. Its highest since October 2014 and more than doubled the price of a year ago. Brent Crude there, 85. Also Brent Crude -- as you see there on the graph there -- a three-year high gaining nearly 1 percent. Of course, that means that gas prices continue to rise for that average American continues to pay $3.35 a gallon. More than a dollar higher than the same time last year. Just to put really it in perspective for you.

Now, an entirely different kind of business is take off in Colombia. The nation's infamous or illicit drug trade now is to become a major international supplier of marijuana. As Stefano Pozzebon reports, the industry is creating an economic opportunity some Colombians have never had before.

(BEGIN VIDEO CLIP)

[04:45:00]

STEFANO POZZEBON, JOURNALIST (voiceover): Like many farmers in Columbia's countryside, Beatrice Pariah's (ph) family grows coffee. But these 29 years old have turned her focus on another plant, marijuana. Beatrice oversees cutouts at this medical weed farm in rural Columbia. She says her parents used to be skeptical of her job. But now, they are proud her daughter is working in the blooming industry of legal marijuana.

This farm is made of 18 hectares of open greenhouses for over 125,000 plants. Columbia legalized cultivation five years ago, but only this summer it allowed the exports of the dried flowers, which represents over 50 percent of the demand in markets like the U.S.

According to the government, this puts Columbia the forefront of medical marijuana regulation. And for that reason, over $250 million of foreign investments have poured and 1,680 licenses have been issued.

With 12 hours of sunlight year-round and no seasons, Columbia enjoys the perfect climate for the production of marijuana. ANDRES FAJARDO, CEO, CLEVER LEAVES: If you think about it, greenhouses in other countries are trying to emulate the natural conditions we get here for free. So, that's a big advantage. And that implies, you know, you have to invest a lot less in your power costs, of course, you know, factor cost in terms of laborer is significantly cheaper here. So, there's a significant cost advantage in ongoing costs basis.

POZZEBON (voiceover): Over 300 people work here. Like Beatrice, the majority are single mothers with few job opportunities in this region.

POZZEBON: Just standing in a place like this, in a country like Columbia, over only 10 years ago would've been completely unimaginable. And that is the idea of how profound this turnaround is, not on economics but also on social terms.

POZZEBON (voiceover): For decades, Columbia has waged a brutal struggle against drug traffickers, claiming thousands of lives and resulting in no reduction in illicit drugs production action in the country.

UNIDENTIFIED MALE (through translator): We will wipe out drug traffickers.

POZZEBON (voiceover): Switching from eradicated to legalizing marijuana was a sobering recognition.

POZZEBON: Some people say that you changing reproach, as you say, you had another vision.

JUAN MANUEL SANTOS, FORMER COLOMBIAN PRESIDENT: I was a hardliner. I have fought against drug trafficking in every way possible, and we have failed. I have failed. Columbia has failed. The world has failed. The U.S. has failed. We must accept, when you lose, you must except that you lost and you must try to find new ways to approach the problem.

POZZEBON (voiceover): This for the step in the legalization of marijuana production opens new opportunities, not only on medical exports but also in other sectors like clothing and cosmetics. About two-thirds of Columbians support the move to legalize marijuana for medical use.

So far, regulation is designed to attract foreign capital and bans recreational use. Pharmaceutical licenses here are cheaper than in other markets, but still out of reach for most Columbian farmers who continue to grow illegally. And projects to replace coca plants with medical cannabis have now taken up. The transition is not yet complete, but the door is opening for a change.

Stefano Pozzebon, CNN, Columbia.

(END VIDEOTAPE)

SOARES: Still to come right here in the show, South Korea making history launching a rocket of his very own making. We'll head to Seoul for the latest on the newest name in the space race. [04:50:00]

(COMMERCIAL BREAK)

SOARES: Now, former U.S. President Bill Clinton says he's on the road to recovery after being hospitalized last week. In a video posted to Twitter, he said he did well and thanked his doctors and the public for their support. Clinton was admitted to a California hospital last week after a urinary tract infection spread to his bloodstream.

Now, a very short time ago, South Korea launched its first domestically produced rocket into space. You can see there. The Nuri or world rocket is a major step in the space program, carrying a dummy satellite weighing more than a ton into the air.

CNN's Paula Hancocks is monitoring it all. She's live for us in Seoul with the latest. I can see there from the images, Paula, the liftoff went smoothly. What does this mean for South Korea?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Isa, at this point, we're waiting for the final confirmation that this was 100 percent a success. We're expecting that any moment now. Now, as you say, it certainly looks successful from a liftoff point of view from those images that we saw. And what this would mean, if in fact it was a success, is that South Korea would become just the seventh country in the world to have its own 100 percent domestically produced rocket that can put a satellite into space.

Now, what they were going for today to make sure that they could -- I think it was a satellite dummy but put that satellite dummy between 600 and 800 kilometers above the earth. If it reaches that point, then it will be considered a success. And certainly, this would be a significant step for South Korea in its space program.

Now, experts here say that they did start late, but they have certainly caught up in recent years. Just in 2013, they were able to launch a rocket carrying a satellite into space. But at that point that was a rocket that had Russian collaboration as well. So, this would be the first time that it would be completely homegrown.

And certainly, there has been a lot of money invested into this. A lot of funds put into this space program in recent years. It's been 12 years in the making. Some $1.6 billion have been invested to try and make this launch today successful. And we are hoping to hear imminently whether or not they do consider it a success -- Isa.

SOARES: We shall find out clearly, the space race is heating up. Paula Hancocks there for us in Seoul. Thanks very much, Paula.

Now to sports, the entire season is on the line for two of baseball's best. Here's Don Riddell with our minute in sports -- Don.

[04:55:00]

DON RIDDELL, CNN WORLD SPORT: Yes, Isa, it's been a big night for the road teams in the Major League Baseball's championship series. Both the Astros and the Braves are now each within one win of the World Series. The Houston Astros have thoroughly enjoyed themselves at Boston's Fenway Park winning games four and now five in the American League. 9-1 the score on Wednesday. They're going to be at home for the rest of the series and need just one win to clinch what would be their first pennant in five years.

Meanwhile, the Atlanta Braves have taken a 3-1 lead against the Dodgers in the National League. They also scored nine runs on Wednesday. Eddie Rosario book ending their evening in Los Angeles with a couple of home runs.

The new NBA season went off with a bang for the New York Knicks who needed double overtime to seal off the Boston Celtics in the Garden -- 138 to 134 for the score. I'd say these two will need to pace themselves. It's going to be a very long season if every game is like that.

And in the Champions League, Manchester United came back from 2-0 down against Atalanta to complete a thrilling home win. And of course, it was Cristiano Ronaldo who scored that winner keeping United at the top of group H. The critics are not convinced that United have all of their ducks in a row this season, Isa, but that was still a thrilling victory at old Trafford. Back to you.

SOARES: Thank you very much, Don. Lots of talk here about of course that Man United win and Cristiano Ronaldo scoring that last goal. Well done to him.

Well, that does it for me. Thanks very much for joining us. I'm Isa Soares, "EARLY START" with Christine Romans and Laura Jarrett up next. And they'll have much more on President Biden's economic agenda. So, do stay with CNN for that. I'll be back of course same time tomorrow. Have a wonderful Thursday. Bye-bye.

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