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Credit Suisse Borrowing Up To $54 Billion From Swiss National Bank; South Korean President In Tokyo For Rare Summit With Japan's Prime Minister; U.S. Claims Russian Jet Clipped Drone's Propeller; Student Worldwide Raising Awareness Of Modern-Day Slavery. Aired 12-1a ET

Aired March 16, 2023 - 00:00   ET

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

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KIM BRUNHUBER, CNN ANCHOR: Hello, I'm Kim Brunhuber.

Ahead on CNN NEWSROOM, a lifeline for Credit Suisse. The troubled mega bank agrees to take a multibillion dollar loan in hopes of staying afloat in common markets.

Japan and South Korea tried to mend ties with the historic summit that North Korea is already attempting to upstage and the United States vows to keep flying missions over the Black Sea a day after it says Russia forced down one of its drones.

ANNOUNCER: Live from CNN Center, this is CNN NEWSROOM with Kim Brunhuber.

BRUNHUBER: We begin with the turmoil in the global financial sector as another bank teeters on the brink of failure.

Just hours ago, Credit Suisse announced it will borrow up to $54 billion from the Swiss National Bank after a slump in its shares left investors on edge.

In a statement the lender said "Credit Suisse is taking decisive action to preemptively strengthen its liquidity. The bank shares dropped 24 percent Wednesday after its biggest shareholder Saudi National Bank ruled out further support. Now this comes just days after the collapse of two U.S. banks that made global markets jittery and sparked worries of a broader banking crisis.

Now, markets across Asia are also seeing declines amid fears of bank instability. CNN's Marc Stewart joins us live from Tokyo. Marc, the fear seems to be spreading worldwide.

MARC STEWART, CNN CORRESPONDENT (on camera): It has been, Kim. And I think that there is some hope that now that Credit Suisse has reached some kind of agreement with the Swiss government that perhaps it will create some stability once again. So far, though, that has not translated into any gains, at least here

in Asia. In fact, let's just take a look at how markets are doing here in Asia. It is just after 1:00 in the afternoon here in Tokyo, the trading day is well underway.

But if we look at Japan here at the benchmark Nikkei index, at one point it was down by more than two percent in early trade. It was last creating 0.9 percent lower.

Over to Hong Kong, the Hang Seng shed 1.3 percent and the Shanghai Composite in China edged down 0.4 percent.

We also saw some declines earlier the day in Korea, but some of those losses have been reversed.

Breaking things down even further, banking stocks, banks have really been hit hard here in Asia, when index tumbled as much as 6.4 percent here in the morning in Japan made up some gains. But also Hong Kong and South Korea also seen some declines among its banking sector.

So, what's at play here? What is causing investors to be so jittery to be so -- to be so worried? Well, Credit Suisse for one thing has had a history of troubles in the past.

If we look in the United States, banks there are dealing with very high interest rates, high interest rates, at least to the U.S. make credit card statements more expensive, make auto lending more expensive, and also makes it more expensive for the way banks do business. And that creates some concern.

Now, as we saw earlier in the week, the U.S. government said that it would guarantee the money in Silicon Valley Bank. Today we are hearing from the Swiss government that it will likely make good on its loan to Credit Suisse.

So, anything that can provide some stability in all of this is certainly welcome. But there is this broader question, are banks across the world vulnerable?

Well, high interest rates do make things difficult to do business. But in the United States at least, after the financial crisis in 2008, a lot of safeguards were put in place so banks wouldn't be put into a predicament. It doesn't mean that they are failed proof from failure. But there are some real strong safeguards, things known as stress tests where the government will go in, look at the banks books and see if they are OK.

[00:05:01]

In fact, over the last few years we haven't seen any banks go under in the United States.

So, as long as there are some moments of stability like this move by the Swiss government, it will perhaps make a trading a little bit more optimistic. Kim, still not sure how that will translate into when the European

markets open and when the American markets open. But for now, it's certainly seen as a welcome sign by investors.

BRUNHUBER: All right, we'll be watching for those markets opening. Marc Stewart live in Tokyo. Thanks so much.

So, for more on this, I want to bring in Ryan Patel, Senior Fellow at Claremont Graduate University's Drucker School of Management. He joins me now from Los Angeles. Good to see you again.

So, the panic seems to be spreading. What are you seeing?

RYAN PATEL, SENIOR FELLOW, DRUCKER SCHOOL OF MANAGEMENT: Yes, I think the panic is going to be here for a while. Whenever you panic, I mean, people questioning the trust.

So, just because we hear this good news from obviously out of Switzerland that the bank is going to be back, that doesn't mean it's all over, Kim. People are going to be asking about, you know, the stability about their own banks and questioning the systems of regulations.

And rightfully so, because if you think about it here in the U.S., we have the second longest run between no bank failures, guess what, since 1933, was the Silicon Valley Bank, we hadn't had a bank failure in over 167 days.

So, over the last three, four years, been pretty stable for bank failures. However, that was two years ago, we are in a different world now, we're in a different aspect. And if you think of what happened in the Silicon Valley Bank, right, the deposits were a lot larger in 2021 when put in that situation.

But again, why I tell you that story, because each bank has its own story, Kim, and there you mentioned -- you know, the story that we were just talking about Switzerland, they were already in trouble, they were looking to be in trouble over the last few years, this has amplified what happened. And you know, they did the right move by ensuring to get those -- you know, that loans back so that can create some stability.

BRUNHUBER: So, I'm wondering, how bad can this get? I mean, will the existing safeguards be enough to prevent a repeat of 2008? Which is top of mind for so many people?

PATEL: Yes. You know, that's a great question. You know, the answer to that is, it should be, right? From 200, 2009 and the regulations to what it is now, it is -- it has been changed. And there are more safeguards in place. And the banks are more like the wild, Wild West back then.

Again, back to the -- to what -- why we're in this issue right now, is that we are different too, the economy is a lot more interconnected. We are fighting inflation. And we're also, you know, there's a second component, which you can't

really ignore, right? This fear of running deposits and getting it from the bank and social media. I'm not blaming all those things. But that's a part of this as well. And in the trust aspect and credibility. We haven't seen something like this where people are trusting of their money, let alone people asking me over the weekend, what does my money go in the bank in itself? What does it mean?

BRUNHUBER: Yes, exactly right. You know, plenty of -- plenty of experts and politicians here as well in the U.S. are saying this proves we need to put back some of the regulations that were rolled back during the Trump years, which was passed with bipartisan support, I should say. What's your take on that?

PATEL: Well, that's a part of it. But you know what truthfully, Kim? I mean, risk management, let me just be really clear. If you're leading a bank, you know, you need to put more efforts. We thought we learned that from 20 -- 2008, 2009.

I understand that people may hate me when I say stuff like that, well, the economy's different. But you have risk management, you have to continue to put money in systems inflammation, so you don't put your bank or put those things in those places that you don't put yourself in that bad spot.

So yes, we can have more regulation. That's a part of it. People are blaming the fed, the Feds a piece of it of the interest rates as well. But so as, you know, you got a whole accountability toward these leadership and banks. And I don't think we've seen that over the years.

And I think hopefully, moving forward, that this will be something that will be held accountable so we can avoid these things.

BRUNHUBER: Yes, absolutely. We'll have to leave it there. Always appreciate having you on, Ryan Patel. Thanks so much.

PATEL: Thank you.

BRUNHUBER: The first time in more than a decade, the leaders of Japan and South Korea are getting ready for a major summit that could reset their country's relationship and move them past decades of historical grievances. South Korean President Yoon Suk Yeol arrived in Tokyo a little more than an hour ago and will meet with Japanese Prime Minister Fumio Kishida in the coming day. U.S. is eager to see its staunch Pacific allies strengthen their ties.

North Korea of course is not. It fired off a long range ballistic missile ahead of the meeting that landed in the waters between Korea and Japan.

The South Korean president released a statement warning North Korea "Will pay the price for its reckless provocations."

We'll have much more on the summit between Japan and South Korea later this hour. U.S. Ambassador to Japan Rahm Emanuel will join me from Tokyo for a

live interview coming up, stay with us for that.

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Two U.S. officials say that Russians have reached the site where an American drone crashed into the Black Sea near Ukraine but the U.S. military says they won't find much.

Joint Chiefs Chairman Gen. Mark Milley reports the drone probably broke up when it went down in international waters and U.S. officials claimed the drone sensitive software was erased remotely before it crashed.

Russia denies that one of its fighter jets clipped the drone's propeller forcing it down. Russian Foreign Minister Sergey Lavrov says the drone ignored airspace restrictions imposed by Moscow over parts of the Black Sea. The U.S. says there is surveillance video of the incident which may be released to the public.

Defense Secretary Lloyd Austin spoke by phone on Wednesday with his Russian counterpart Sergei Shoigu. Austin says American aircraft will continue to fly wherever international law allows, here he is.

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GEN. LLOYD AUSTIN, DEFENSE SECRETARY: This hazardous episode is a part -- is part of a pattern of aggressive, risky and unsafe actions by Russian pilots in international airspace.

It is incumbent upon Russia to operate its military aircraft in a safe and professional manner.

(END VIDEO CLIP)

BRUNHUBER: U.S. sources say senior officials in the Russian defense ministry gave the order for the fighter to harass the U.S. drone over the Black Sea. There's no indication those in the Kremlin including Vladimir Putin knew about the plan aggression in advance.

CNN's Oren Liebermann has more on the incident.

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OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT (voice-over): After what the U.S. called an unsafe and unprofessional intercept of a U.S. drone, officials now say the MQ-9's operators erased sensitive software from the drone before it crashed. As Russia now says they'll try to recover the wreckage from the Black Sea. The U.S, military insisted they will not stop flying reconnaissance drones over international waters.

LLOYD AUSTIN, DEFENSE SECRETARY: The United States will continue to fly and to operate wherever international law allows.

LIEBERMANN: The drone was taken down after a nearly 40 minutes encounter southwest of Crimea when Russian SU27 fighter jets flew in front of it and dumped fuel in its path. One jet flew underneath the drone, likely attempting to get in front of it while dumping fuel, and clipped the propeller on the back of the MQ-9.

BRIG. GEN. PATRICK RYDER, PENTAGON PRESS SECRETARY: Because of the damage, were in a position to have to essentially crash it into the Black Sea.

LIEBERMANN: But Russia denies the two aircraft collided. The Russian ambassador to the U.S, trying to calm tensions after the Biden administration summoned him to the State Department.

ANATOLY ANTONOV, RUSSIAN AMBASSADOR TO U.S.: We prefer to not to create a situation where we can face unintended clashes or unintended incidents between the Russian Federation and the United States.

LIEBERMANN: But with both U.S. and Russian aircraft operating over the Black Sea, the nearby, Russian invasion of Ukraine drags on, so too do the chances of a dangerous miscalculation.

GEN. MIKE MILLEY, JOINT CHIEFS CHAIRMAN: We know that the intercept was intentional. We know that the aggressive behavior was intentional. We also know it was very unprofessional and very unsafe. The actual contact of the fixed wing Russian fighter with our UAV, the physical contact of those two, not sure yet.

LIEBERMANN: Russian aircraft have had other dangerous confrontations with the U.S. in the Black Sea before such as this interception of a B-52 in 2020 like a scene from "Top Gun," a Russian pilot staring down his American counterpart while flying dangerously close. Or this intercept of a U.S. P-3 plane in 2018. The Russian jet turned on its afterburners, causing the plane to shake. Pentagon says the incidents are getting worse.

MILLEY: There is a pattern of behavior recently where there is more aggressive actions being conducted by the Russians.

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LIEBERMANN (on camera): Two U.S. officials tells CNN that Russia was able to get to the scene of the crash site in the Black Sea, some 70 miles southwest of the Crimean peninsula that Russian Navy has shipped there. So, it wouldn't have been that difficult for them to get to the scene of the crash with senior Russian officials promising to at least attempt to recover some of the wreckage of the drone to see what's possible to learn from there. Even though the U.S. says it took steps to make sure there was no sensitive information or sensitive software that could be recovered from the drone.

Still, the Russians were able to get to the crash site, it's unclear if or what they were able to recover there.

Oren Liebermann, CNN in the Pentagon.

BRUNHUBER: On the battlefield in eastern Ukraine, one commander says a Ukrainian soldier destroyed a Russian military jet near Bakhmut with new video appearing to show that very moment, have a look at this.

That video shows the jet's wreckage burning and what appears to be a white parachute suggesting the pilot may have been able to eject from the plane.

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Ukraine says its military has downed more than 300 Russian aircraft since the start of the war, but CNN isn't able to independently verify that number.

All right, still to come, it's called My Freedom Day, students around the world are speaking up and taking action to raise awareness of modern day slavery.

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UNIDENTIFIED FEMALE: Let's stay united in fighting against human trafficking.

UNIDENTIFIED FEMALE: Knowing the signs, saves lives. Let's take action together.

UNIDENTIFIED FEMALE: Let's end modern day slavery.

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BRUNHUBER: It's called My Freedom Day, a day in which CNN teams up with young people worldwide for a student-led day of action against modern day slavery. Here are some messages from students in Abidjan.

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UNIDENTIFIED FEMALE: I think it's important to raise awareness about human trafficking because by raising awareness, people will be able to understand what exactly it is and how to recognize it. And this can stop human trafficking in general.

UNIDENTIFIED MALE: My Freedom Day is important because it raises awareness about modern day slavery resulting the government being persuaded as meaningful legislation.

UNIDENTIFIED FEMALE: People should protest for the people who work without pay.

UNIDENTIFIED MALE: I think child labor should be eradicated in all countries.

(END VIDEO CLIP)

BRUNHUBER: We have CNN correspondents covering this day of action at schools around the globe. Kristie Lu Stout is live for us at the Hong Kong International School. Kristie, what do you have there for us? KRISTIE LU STOUT, CNN CORRESPONDENT (on camera): Hi, Kim, here in Hong Kong like one of many schools across the region and the world marking My Freedom Day a day of student led action to raise awareness about modern day slavery to fight human trafficking and you feel it and you see it once you come onto the campus here at Hong Kong International School in the form of our projects. Behind me, you will see this photo that's been painted by the students in bright red with the question, what does freedom mean to you with some responses including self- determination and power over your life.

The students here at Hong Kong International School have also been taking part in impactful classroom discussions and workshops, including a workshop that is a sweatshop simulation challenge. So the students step into and really feel what it's like to be in a forced labor situation.

Joining me now are two students who are members of the anti-human trafficking club here at HKIS. Eva and Theo, thank you so much for joining us.

And first I want to ask you the signs of slavery. That is the theme this year for My Freedom Day. What are the signs of slavery?

THEO CHIU, STUDENT: Right, so, I think the number one thing is if someone shows signs of being physically or mentally abused, and then also if they're being -- looked like they're being controlled by someone, and if they've no travel documents or identification.

STOUT: Yes, very well said. And if you see someone who you suspect could be in a human trafficking situation, what do you do, Eva?

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EVA SINGER, STUDENT: You should definitely reach out to the authorities and make sure that they are OK, and that they are safe.

STOUT: Yes. Both of you are involved in the anti-human trafficking club here at HKIS. What do you do as part of the club? Tell me about it.

SINGER: Well, we run several events throughout the year and first semester, we let -- we held the three part race here in Hong Kong at our school. And this is a student led organization, which helps raise money and raise awareness for human trafficking.

STOUT: So, those are two big goals, raising funds for anti-human trafficking, NGOs, as well as raising awareness as well. And why get involved? What motivates you?

CHIU: I think, because the issue of modern day slavery is more like prevalent than ever, even though not many people know about it, like more slaves than there ever has been. And just also like, just really unethical. And you know, it's important to raise awareness.

STOUT: Yes, both of you have been taking part in some of the classroom exercises, whether it's the one on doing the science of slavery, or even the sweatshop simulation challenge. Was there anything that you learned that surprised you about the issue?

SINGER: Yes, something in the scene in sweatshop, it was really -- it was really an eye opening experience. Because, you know, you learn about in class a lot, but to actually experience it yourself in even though it's very not similar to what people are experiencing. And I learned so much what Theo said that right now is the most slaves that have ever been.

STOUT: Yes, it's that experiential learning opportunity to feel what it's like to be enslaved, to have no sense of hope, no brakes, no pay, no way out and to understand what the signs of slavery are and to do when you see those signs.

Eva and Theo, thank you so much for joining us. Yes, and thank you for your work.

You know, as both Theo and Eva pointed out, the number of people who are trapped in modern day slavery is at a record high. And according to the International Labor Organization, an estimate of 50 million people around the world are victims of human trafficking, forced labor or forced marriage, that is up from 25 percent from the last estimate in 2016. And this is due to a number of factors, like the climate crisis, like the recent COVID-19 pandemic, war in conflict as well.

You know, Kim, the problem is so immense, and yet the students here in Hong Kong, around the region, around the world are very motivated to somehow end this disturbing trend. Back to you, Kim.

BRUNHUBER: Yes, great to see how aware those students are of the problem there.

I want to go now to Vedika Sud who's standing by at the American Embassy School in New Delhi. So, Vedika, how are folks there marking the day?

VEDIKA SUD, CNN REPORTER (on camera): Kim, here in New Delhi, the American Embassy school, like so many schools across the region is marking My Freedom Day.

Right behind me under this gigantic and beautiful banyan tree on campus. You can see about a dozen students from high school. They're talking about modern day slavery, they're talking about child trafficking.

Kim, according to the International Labor Organization, nearly 50 million people live in modern slavery in the year 2021. At least, that was the latest figure that we have for you.

Now, this specifically talking about child trafficking. And this is a very serious issue here in India as well. What I really love about this group is that they have students from the U.K., the U.S., Israel, India and France who are a part of this discussion today.

But of course, it's very important to hear from the students themselves. I have with me in Imran (PH) and Robin (PH), they're going to talk to us about what they understand could be the signs of slavery in their day to day lives.

And Imran, tell me more about it. You know, you hear about this in school. There's so much of discussion discourse over this on a day to day basis in school outside with the parents perhaps, but what would you say? How would you spot signs of slavery?

IMRAN, STUDENT: So, I believe modern day slavery and human trafficking starts with, you know, people very vulnerable nature, being forced to take very risky opportunities and having to go through very risky work, because those are the only opportunities provided to them in order to provide for their families. And yes, that sort of stuff.

So, I believe if you're asking what are the signs to spot, then we have to look at the root cause of the problem, which is looking at those people in very vulnerable communities, and ensuring that they're given the freedom of opportunity for upward social mobility and the freedom of being able to have a jobs and have growth outside of risky opportunities, and which might make them vulnerable to human trafficking or potential slavery.

SUD: Imagine those words coming from high school students, so heartening to hear Imran say what he just said.

I'm going to go across Robin now. Robin, we've been talking about this. You've been a part of discussions in school about modern day slavery, how would you say or how would you spot signs of slavery in your day to day life?

ROBIN, STUDENT: Well, so I think modern day slavery is not as simple as it was 200 years ago, 300 years ago. And I think that we need to address the blurred lines of slavery. We need to look at the projects that we see in our everyday lives, a new airport, a new shopping mall. And we need to think about whose backs it was built upon, who sacrificed their life, who said bye to their family for three years to go and work in harsh conditions, and build these new project for us.

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So, I think as a community and as a world who cares about this issue, we need to slow our growth ever so slightly, and care slightly more about the freedom of these people.

SUD: To slow our growth ever so slightly. That's amazing, isn't it coming from these students, they are the leaders of tomorrow. And to hear this from them is simply heartening, encouraging, and we have a promising world to look forward to at a time when conflict is really the narrative across the globe.

Back to you, Kim.

BRUNHUBER: Great to hear from all those students. Thanks so much Vedika Sud and Kristie Lu Stout, I really appreciate that.

And you can join CNN on My Freedom Day and tell us what freedom means to you. And you can share your message on social media using the #MyFreedomDay. All right, still ahead, Seoul calls it an important milestone, the

first meeting between leaders of South Korea and Japan in more than a decade and it comes in a critical time for the region. More on that story when we return, stay with us.

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BRUNHUBER: You're watching CNN NEWSROOM. I'm Kim Brunhuber.

A rare summit between the leaders of South Korea and Japan is expected to take place in the coming hours. South Korean President Yoon Suk Yeol arrived in Tokyo just a short time ago. It's the first time in 12 years a South Korean president has visited Japan. He's set to meet with Japan's Prime Minister in what Seoul calls an important milestone.

Now, the two countries have an acrimonious history, but they're both close allies with the U.S. and their frayed relationships have hampered efforts to put on a united front against North Korea.

Now, ahead of the summit, Pyongyang launched a long range ballistic missile into the waters between the Korean Peninsula and Japan. It's the latest in a flurry of tests so far this week.

Joining me now from Tokyo is the U.S. Ambassador to Japan, Rahm Emanuel. Thanks so much for being here with us, Ambassador.

Before we get to the meat of the summit, I want to get your reaction to the North Korea's latest missile launch.

RAHM EMANUEL, U.S. AMBASSADOR TO JAPAN: Well, I mean, this is a reaction, I think, actually, to the coming together of the America's two closest allies, Japan and the Republic of Korea.

This is as you know, all year they've been launching missiles, but they're always in reaction to the advancement of something like this, which is both cooperation, collaboration and coordination in shared interests.

So, you know, I'm not being (INAUDIBLE) about it, but it's not the first one. It's I think the 82nd one, and it's more of a reaction to the progress being made in an attempt to make a statement of relevance.

BRUNHUBER: Well, in the reaction to that launch, Japan's Chief Secretary said among other things that Japan, South Korea and the U.S. will, --

KIM BRUNHUBER, CNN INTERNATIONAL ANCHOR: In the reaction to that launch, Japan's chief secretary said, among other things, that Japan, South Korea and the U.S. will, quote, "work closely together towards the complete denuclearization of North Korea at today's upcoming Japan=South Korea summit meeting."

[00:30:19] But, of course, North Korea has been unwilling to negotiate with any of the countries involved. So what steps will be discussed?

RAHM EMANUEL, U.S. AMBASSADOR TO JAPAN: Well, I think what you should take reassuring is that our working together, not only on the political front but on the strategic front, on the deterrence front is what North Korea is scared about. It's also what China doesn't want to see happen.

So I think it's -- we're going to be, obviously, doing things and taking appropriate steps to make sure that not only that the progress being made in the next few days is a reflection of what I believe is the first day of a new chapter in Japan and Korea's relationship, but more significantly, it is a shared determination to project the deterrence and the -- and I think the collective interests of the United States, Japan and Korea.

BRUNHUBER: So let's talk about that new chapter between Japan and South Korea relations. Obviously, we're at a relatively low point. There are plenty of historical grievances to overcome.

So what was the U.S. role in bringing the two nations closer together? And how much pressure is the U.S. exerting for them to come to meaningful agreements on the main issues?

EMANUEL: I actually think it's something a little different. Over the last year, the United States, from the president and on down, and you saw the president with the two leaders in Cambodia, two leaders earlier than that in Spain and on the side of NATO, we have had over 40 trilateral meetings. Secretary of state level, secretary at defense level and many different levels.

That familiarity, that institutionalized dialogue and conversation, the building of trust, was probably the greatest contribution. And again, those 40 plus meetings, more in 12 months than the preceding 5 years combined.

Second is actually a role of restraint. This was directly handled by Japan and the Republic of Korea, as it is appropriately so. And they actually did the most important part of that was talking to each other, hearing each other and then addressing each other's concerns. And the United States' role was a convenor of the trilateral meetings that allowed bilateral meetings to occur and trust between the parties to be built.

And nothing advances America's interests, the presidents primary goal, whether it's on the transatlantic or the Indo-Pacific, is to re- energize our alliances, re-energize our allies for shared interests, shared values and shared goals.

This is example one of exactly that strategy by the president, but it's also -- step back. This week, we announced Aukus, the collaboration between the United States, U.K. and Australia on the new -- on the submarine nuclear technology.

We also -- the Japanese announced a new jet fighter with Italy, the U.K. and Japan.

Two weeks ago, the Philippine president visited Japan and were having multiple discussions about what I call the trilateral relationship to point out (ph).

Those are all part of our alliances and our allies working together.

Now what does that cooperation stand in contrast to China? When you see China in the last two months, they've had two border conflicts with India. They've had two coast guard conflicts with the Philippines. They've strathed the United States' planes and the Canadian planes. They flew a spy balloon over the United States. And the constantly found issues (ph) with the Pacific island nations.

That is China's modus operandi: conflict, confrontation. The United States, collaboration and cooperation with our allies. And it stands in contrast. And that's why more and more countries in this region, both allies, friends and partners, want to see America's presence, both economically, strategically and at a deterrence level, because they worry that China unhinged (ph) is a China at confrontation with all their neighbors.

BRUNHUBER: Yes, I mean, certainly, China has been accusing the U.S. of being war-like and forcing Japan and South Korea together.

So in terms of those two countries specifically, how big a factor has China's, as you say, increasingly aggressive expansion been forcing the two countries together?

EMANUEL: China -- Two parts to that. One is, Kim, China says it's containment, all our allies and us, is deterrence. If China wasn't in a confrontation with India twice on the border, or the Philippines, twice, accused of shooting missiles into Japan's sea (ph), nobody would be like this. This is a recent development in response to China's constant confrontation with others.

[00:35:04]

The second is, China's had a strategy for a long time of trying to keep America's allies divided. Today's agreement is not only what I think, by both leaders and should be respected, their bold, brave leadership, they were forthright about the history of the 20th Century. And it's equally forthright and honest about the opportunities of the 21st Century.

When all our allies come together, agree upon the shared interests, that is a good day for America's interests.

Now, this year, the United States issued a national security document. Japan did the same. Korea did the same. You look at all the documents, they're incredibly aligned strategically, and they're aligned in a philosophical outlook of what the objectives are. And we could all have written them; they're like an addendum to each other. That's a good day for not just the United States but for our allies' shared interests. We can rely on each other from a supply chain basis. We can rely on

each other from economic trade with each other. Last three years in a row, the United States and Japan were the No. 1 investors in each other's respective countries.

And we can rely on each other for our collective security. That is a good day for the United States. That's a win.

BRUNHUBER: We'll have to leave it there, but thank you so much for joining us, U.S. ambassador to Japan, Rahm Emmanuel. Really appreciate it.

EMANUEL: Thanks, Kim.

BRUNHUBER: All right. We're going to take a short break. We'll be back in a moment. Please, stay with us.

(COMMERCIAL BREAK)

BRUNHUBER: Fans of the German football club Eintracht Frankfurt clashed with Italian police in Naples on Wednesday ahead of a key match.

Video shows groups of men attacking riot police with flamethrowers and other objects. Cars were also set on fire. Italian authorities banned German fans from attending the match against Napoli over concerns about possible violence. But some Eintracht supporters made the trip anyway.

The Italian team ultimately won the match, three-nil.

Protesters against Israel's proposed judicial reform found a new way to send a message to Prime Minister Benjamin Netanyahu. On Wednesday, they slowed traffic to a crawl near Tel Aviv's airport ahead of his fight to Germany.

Israel has been rattled by weeks of protests against the reforms, which opponents say would undermine the system of checks and balances in the country's government.

As Hadas Gold reports, Israel's president is now proposing a compromise and issuing a blunt warning.

(BEGIN VIDEOTAPE)

(CROWD CHANTING)

HADAS GOLD, CNN INTERNATIONAL CORRESPONDENT (voice-over): As hundreds of thousands of Israelis have been taking to the streets for weeks now to protest the Israeli government's judicial overhaul plan, the Israeli president, Isaac Herzog, made another impassioned plea as he unveiled his own compromise proposal on the reforms that the Netanyahu government is seeking.

[00:40:0]

In a televised speech, Isaac Herzog warned that the country is in a worrying crisis and is facing a possible civil war.

ISAAC HERZOG, ISRAELI PRESIDENT (through translator): I'm going to use a phrase I haven't used before, an expression that there is no Israeli who is not horrified when he hears it. Whoever thinks that the real civil war of human lives is a limit that it will not reach has no idea. Precisely now, in the 75th year of the state of Israel, that abyss is within touching distance.

GOLD: Herzog acknowledged that some structural changes are necessary, he says, to rebalance the relationship between the Israeli branches of government.

But he said that these changes need to be made with common sense and buy-in from as many people as possible.

The current judicial overhaul, which has already passed some of its first votes, gives the Israeli Parliament, and therefore, the politicians in power, the ability to overturn Supreme Court decisions and more power over appointing judges.

Herzog's proposal limits what the Supreme Court can overturn, but still gives them the power of overturning some laws while requiring a larger majority of justices in order for laws to be overturned.

The proposal also creates a new framework for appointing judges.

But almost as soon as the Israeli president was done speaking, the ruling coalition rejected the proposal.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): Unfortunately, the things presented by the president were not agreed upon by the coalition representatives. Key sections of the outline he presented only perpetuate the existing situation and do not bring the required balance to the Israeli branches of government. This is the unfortunate truth.

GOLD (voice-over): Meanwhile, another massive day of protests is planned for Thursday, when tens of thousands, if not more, of Israelis are expected to once again take to streets in --

GOLD: -- what's become one of the largest and longest-running demonstrations in Israeli history.

Hadas Gold, CNN, Jerusalem.

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BRUNHUBER: We're waiting to see if Pakistani police will make another attempt to arrest former prime minister, Imran Khan. He greeted his supporters outside his home on Wednesday.

That's after a court suspended an operation to arrest him, but the order expires at the top of the hour.

Police have already tried to detain him, which led to clashes with his supporters outside his home. Khan is wanted on corruption charges, which he has dismissed as

politically motivated. On Wednesday, a court rejected his petition to throw out his arrest warrant.

The world's nuclear watchdog says it can't account for the whereabouts of several drums of nuclear material in Libya. In a statement to CNN, an IAEA spokesperson says, quote, "approximately 2.5 tons of natural uranium in the form of uranium ore concentrate were not present as previously declared at a location of the state of Libya.

The agency says it's working to clarify how the material was removed and where it ended up.

I'm Kim Brunhuber. I'll be back in about 15 minutes with more CNN NEWSROOM. But first, WORLD SPORT starts after the break.

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