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CNN This Morning

Anger, Fury Erupt Across China Over COVID Controls and Xi's Rule; Fauci Warns RSV Could Become Public Health Emergency in U.S.; Online Black Friday Sales Break Record as Americans Chase Deals. Aired 7-7:30a ET

Aired November 28, 2022 - 07:00   ET

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

[07:00:00]

DON LEMON, CNN ANCHOR: I hope you had a good one, lots of news to discuss.

Rare protests and clashes with police spreading across China, the crowds fed up with COVID restrictions and calling for their president to step down, how this all happened and where it might be headed, that's next.

KAITLAN COLLINS, CNN ANCHOR: Plus, an entire American city is without water right now. Public schools in Houston are forced to shut down as the city put a boil water order in place after losing pressure at a purification plant. We have more for you.

POPPY HARLOW, CNN ANCHOR: Also Kim Kardashian calling out Balenciaga, that brand, over its holiday ad campaign, a teddy bear advertisement that has touched off a firestorm. We'll tell you why.

But we start with these protests spreading rapidly and intensely across China. Thousands of demonstrators are angry with COVID lockdowns, many of them calling for democracy and political freedoms and an end to President Xi Jinping's regime.

Police have responded to the unrest with brutality, chaotic scenes of protesters being dragged, shoved and beaten. Take a look at BBC Reporter Ed Lawrence being taken into custody in Shanghai.

Again, that is a journalist, look at what police are doing to him, taking him into custody. The BBC reality workforce (ph) says that Lawrence was kicked and handcuffed for hours before being released.

Selina Wang is live in Beijing for CNN this morning. Selina, thank you for your reporting on this throughout. This is deeply personal to so many in China. How different is this from what we've seen in at least the last decade or so? It seems like this time is different.

SELINA WANG, CNN CORRESPONDENT: This is unprecedented, since Xi Jinping took power. What we are seeing is surreal and unbelievable. Last night, I was there in the middle of a protest in the capital of China. We're talking about a country where it is extremely dangerous to publically criticize the party, especially Xi himself. You risk prison time or even worse.

But that is exactly the risk people are taking across the country. And last night in Beijing, they were chanting over and over again, we don't want COVID tests, we want freedom, some shouting for freedom of speech, human rights. Many people also holding white paper in their hands. It's a sign of solidarity against censorship.

And I spoke to a protester who told me he motorcycled and biked more than an hour to get to the scene. And when I asked how he was feeling, this is what he told me.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm overwhelmed. Every conscientious Chinese should be here. They don't have to voice their opinions but I hope they can stand with us.

(END VIDEO CLIP)

WANG: And I cannot overemphasize how rare it is to have someone speak to CNN mask-less in public. It shows how determined they are for their voices to be heard. And after 2:00 A.M., more police filed in, they were forcing us to disperse. We saw those videos of violence in Shanghai during protests, but at least what I witnessed yesterday was peaceful.

LEMON: Listen, it is very dangerous, they're obviously putting their safety and their lives on the lines there. Poppy asked the question, what happened this time. But do you think this will be effective this time?

WANG: Well, these people are extremely determined, but this is also extremely dangerous and the security presence is huge. I'm about to drive out right after this to go back to the place we were, and I'm expecting to see rows of police cars there.

But what pushed people past their breaking point this point, Don, was so heartbreaking. It was a fire that broke out in the far west region of Xinjiang that killed at least ten people and videos of the scene indicated that COVID restrictions prevented victims from getting help with the compound entrance blocked by these fences and metal barriers normally used in COVID lockdowns. You can literally see flames coming from the building, no water able to reach them. It triggered people's worst nightmares, Don, the idea that any one of us could be trapped in a building while a fire is ranging, unable to get help. Don?

LEMON: Selina Wang, thank you very much for that.

COLLINS: For more on this, I want to bring in Chief Anchor and Chief National Security Correspondent Jim Sciutto, who is in Washington.

Jim, there have been signs of dissent, but do you think that this new wave of anger is posing a bigger challenge for Xi Jinping's government?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: It is definitely posting a challenge to the government. The question is how big of a challenge because this is a government that has built a security apparatus for two decades precisely to control this kind of thing.

But let's look at the scale of this, right? Protests happen in China. It's a country of more than a billion and a half people but those are local. This is national. And it's affecting China's biggest, most powerful cities, of course, the capital, Beijing, Shanghai, business center, Guangzhou in the south, Nanjing, Wuhan, Chongqing. These are cities of tens of millions of people in many cases.

When you look at the protests, they're not small and isolated.

[07:05:01]

They are often involving hundreds of people out in public places, as Selina mentioned, with their masks off, allows them to be easily identified. And that's an act of courage in this country because this is a country that tracks every act of dissent, it knows who you are and it punishes those people. It's an enormous risk to do what these people are doing to challenge the government.

And this is something that Xi Jinping is certainly noticing. They're not just saying, I have a problem with China's COVID policy. They are mentioning Xi Jinping by name and they are freedoms by name. Listen to this particular point. This is in Guangzhou, in the south. Listen to what the protesters are saying here. We'll play the clip.

They're saying no to lockdowns, yes to freedoms. They mention freedom of the press. They mention freedom of speech. They mention freedom of action. These are things explicitly forbidden in China, Kaitlan. And that is a broader criticism than just saying, we're sick of the COVID restrictions.

COLLINS: Yes. And this comes, as you know, Xi has just gotten his third term in power. I wonder how the government -- what are you watching to see and how the government is responding to these separate factions and protests all coming together under this pushing back against the COVID restrictions?

SCIUTTO: It's a good question and they are responding by tweaking. We already heard today, and Selina Wang mentioned this. This is the moment that really sparked all this. This is Urumqi. You have a fire at an apartment building. There's the fire hose. The reason the firemen could not get to the building is because of COVID restrictions. There were barriers around the building. So, they're so far away, the water can't even reach the flames, right? This led to the frustration here.

They have since tweaked some of those policies, no longer, for instance, locking the doors to apartment complexes, so in the event of a fire, say, firemen can get in there, but those are tweaks. They are just related COVID policies earlier this month. But then when COVID cases went up again, they had to re-impose many restrictions there.

And to this point, Kaitlan, China's COVID policy is a failure. Their vaccines largely don't work, people are still getting infected. And there was one moment, I have been, Kaitlan, that has been particularly powerful for the Chinese people. They've been watching the World Cup, okay? Like the world is watching the World Cup. They see mask-less crowds in Qatar cheering for their teams. China is still behind masks. And it's not just the developing world that seems to have put COVID behind it, China has not, and that's causing enormous frustration there. The trouble is China has an enormous security apparatus, they will crack down and they'll crack down hard.

COLLINS: Yes. We'll be watching. Jim Sciutto, thank you.

SCIUTTO: Thanks.

LEMON: Well, new this morning, a power outage triggering a major chain reaction and creating all sorts of havoc for millions in the country's fourth largest city of Houston. The chaos includes a boil water advisory and now the closure of all public schools.

Straight to CNN's Rosa Flores live in Houston this morning. Rosa, good morning to you. What happened?

ROSA FLORES, CNN CORRESPONDENT: Well, good morning, Don. As you mentioned, there was a power outage here yesterday, and according to the city of Houston, that impacted one of the water treatment plants. And the water there, the water pressure dropped below 20 PSI for one to two minutes. That's why the city of Houston issued this boil order advisory, asking residents to boil their tap water before using it.

And as you mentioned, Houston is a big city. This is impacting more than 2 million people and some school districts have closed today. So, it's impacting parents, Don, today. Now, they have their children at home. It's impacting at least the Houston school district but other school districts are also affected. Don?

HARLOW: So, what has to happen, Rosa, for the boil water order to be lifted? I mean, Don was just saying how this impacts schools. There's going to be a lot of unhappy parents this morning.

FLORES: I know. And, Poppy, let met nerd out with you for just a second because this has to happen per state law, when the water pressure drops. And so what needs to happen is the city of Houston has to submit a plan to the state of Texas, the state of Texas then has to approve that plan, then water samples have to be collected, that water sample has to be tested. And then these water samples have to sit for 18 hours to see if anything grows on the water. If nothing grows, according to the mayor of Houston, then the water could be lifted as early as later tonight or it could tomorrow morning.

But I should add that the mayor of Houston did take to Twitter yesterday to say that he believes that the water is safe, but, again, by law, once that water pressure drops below 20 PSI, they have to issue a boil order. Poppy?

HARLOW: Wow, everyone affected, literally, everyone. Thank you, Rosa.

With the holidays and the flu season now under way, Dr. Anthony Fauci is warning that RSV and the flu could become a public health emergency right here.

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DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: In some regions of the country, we're seeing that the hospital system for pediatrics are at the point of almost being overwhelmed.

[07:10:09]

When you have like almost all the intensive care beds that are occupied, it's bad for the children who have RSV and need intensive care. But it also occupies all the beds and children who have a number of other diseases.

(END VIDEO CLIP)

HARLOW: Remember, we were talking about that last week with the ICU beds at some children's hospitals completely full. Well, Fauci is also urging Congress to pass $10 billion in additional funding for COVID-19 research treatment and outreach, encouraging Americans to get those latest booster vaccines.

COLLINS: He also weighed in on and was optimistic about record flu hospitalizations that we are seeing across America, as they are reaching a peak.

(BEGIN VIDEO CLIP)

FAUCI: If you look at the flu curves and you look at all the other years, it goes up like this way before, it usually goes up over here.

UNIDENTIFIED FEMALE: So, you think we're in the worst of it?

FAUCI: I hope so. I think so, but you never want to be overconfident.

(END VIDEO CLIP)

COLLINS: There haven't been this many hospitalizations for the flu at this point in the season for more than a decade.

Joining us more on this for now is CNN Senior Medical Correspondent Elizabeth Cohen. Elizabeth, I know a lot of this has to do with the fact that people were taking such big mitigation steps over the last several years. That's why we're seeing such a difference now. A big question people want to know though is how they avoid getting sick as the flu cases are already this high and people are gathering for the holidays, they're out and about more than they have been in the last several years.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right, Kaitlan. So, all the advice that I'm going to give you, you have heard it before. There is nothing new under the sun. It's very basic stuff. It's things like getting a flu shot, so important, washing your hands frequently. And if you want to -- no one is advising you to, but if you want to, certainly wearing a mask is going to help protect against the flu, not to mention things like RSV and COVID and other respiratory diseases.

As you mentioned, flu hospitalizations at a high right now for this point of the season. Such an early flu season, if you look all the way to the right, you can see a bar that represents the rate now, all the rates over the past ten years, way lower at this point in the season. Kaitlan, Poppy?

COLLINS: And, Elizabeth, you heard Dr. Fauci saying there that he is hoping that we're at the peak but also this comes as we are seeing these RSV cases pushing hospitals at the brink. What are we hearing from medical officials about their concern? Because the question is will it become a public health emergency? What does this look like? So, what are people who are actually in the health profession saying about this?

COHEN: What they're saying is they're concerned about this triple threat. I mean, you still have about 300 people each day dying from COVID and lots of people, tens of thousands of people in the hospital. So, you have got hospitalizations due to COVID, due to flu, as we saw, so high, also for the very young and the very old, due to RSV. That's a lot of people. Hospitals are so strained and a lot of doctors and nurses left the profession during COVID because they just frankly got so sick of it. So, we have got a bad situation, three infections that are putting people in the hospital, not enough doctors and nurses.

COLLINS: Yes. It feels like they just can't catch a break. Elizabeth Cohen, thanks for that update.

LEMON: And this morning, Kim Kardashian is speaking out against Balenciaga over its controversial ad campaign. The brand, which Kardashian frequently collaborates with, released a holiday ad which appears to show kids holding teddy bears in bondage.

Let's go now to CNN's Erica Hill. She joins us now. Good morning to you. How do they think this was a good idea?

ERICA HILL, CNN ANCHOR AND NATIONAL CORRESPONDENT: That still remains a question. So, this ad campaign was actually pulled last week. Tuesday, there was a statement out that put out on social media, Balenciaga saying that they apologized, sincerely apologized for any offense our holiday campaign may have caused, that the bags should not have been featured with children. So, these are teddy bears that appear to be in bondage gear in an ad with children.

The photographer next day gave a statement to CNN saying, well, I had no direction here for the shoot of these pictures. I mean, you can see them here. You can see why people were a little bit disturbed by them.

So, as to why and how this happened, there still hasn't been a clear answer on that as to who thought it was a good idea because you have to get pretty high up the chain of command.

LEMON: It's a teddy bag, is that what it is?

HILL: It's a teddy bear bag with bondage chains over it in an ad with kids. HARLOW: I mean, I have so many thoughts and so many questions, but Kim Kardashian has so much power. Obviously, she's collaborated with his friend a lot, I assume made money from them, been paid, right? And a mother of four, right?

HILL: Exactly. And so, well, there was a lot of pressure because, again, this happened last week, a lot of pressure for her to speak out. So, finally, on Sunday night, she does posts on social media saying, look, the reason I waited until this point is I was taking my time, I wanted to speak with the company. She notes that, of course, she is a mother of four, how she finds this disturbing as a mother of four.

[07:15:00]

She says that in her conversations, she believes they understand the seriousness of the issue but she's reevaluating. So, it's unclear as to whether she will continue working with them. She said she spoke with them and they get it. Not really sure what that means.

LEMON: Do you know how big this is? I was in New York yesterday and I saw Balenciaga protests, one with a cross. And I don't know the nature of it. But I've been seeing, it's obviously active on social media, you have someone as Kim Kardashian, who's a huge influencer, speaking out about it. Do you know how big this is? Is this penetrating?

HILL: Big in terms of -- do you mean is it penetrating and damaging the brand?

LEMON: Yes.

HILL: I don't know that's clear yet. I don't know that it has been long enough as to see whether or not there is a financial impact on the brand. Has there been outrage and pushback on social media, absolutely?

LEMON: All right. Erica Hill, thank you very much. I appreciate that. We'll continue to watch this.

Inflation is not slowing down holiday shoppers. Cyber Monday and Black Friday shattering sales records.

COLLINS: And Kim Jong-un's daughter seen in public again, the second time in recent days. Typically, she has been shrouded in secrecy. We'll talk about maybe the strategy behind these sightings, ahead.

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[07:20:00]

HARLOW: Despite decades' high inflation and real economic uncertainty, shoppers seem not to be feeling it this holiday season. You guys spent a record $9.1 billion just online on Black Friday. That's according to Adobe Analytics. It's up from 8.9 billion and then 9 billion flat over the last two years. CNN Chief Business Correspondent Christine Romans can't stop shaking her head and CNN Correspondent Marc Stewart is also with us. What is going on?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Oh my, never count out the American consumer, the mighty American consumer. Coming out of, you know, three years now of COVID, we can see from these numbers people want to spend money on things that matter to them. People want to go to the mall. They went to the mall. They went shopping. They went shopping online. We've had Black Friday sales for like a month now already and you'll have sales all the way to the end of the year. And I see a sign here, a very important test for the American economy. Prices are higher, people are making changes because of that but they are still spending.

HARLOW: And real wages are not keeping up with inflation, yes.

COLLINS: Here is what I'm confused by. Okay, consumer's concerns about the economy are the highest they've been since the great recession. And according to the NRF, they said that the state of the economy was impacting their holiday spending plans. But are we actually seeing that or we're just not looking in the right places?

MARC STEWART, CNN CORRESPONDENT: Well, I think it remains to be seen exactly what people are buying. Are they getting deals on clothing or electronics? Are they buying bundles of toilet paper? So, I think that's something that still needs to be ironed out here still.

But the other thing which I think actually is a bit concerning, and I think Christine will agree with me on this, is that people are using their credit cards big time right now, at a time when interest rates are extremely high.

HARLOW: Record high.

STEWART: Record high. And we don't know where the Fed is going to go. We were just talking, the Fed is going to give a speech this week and perhaps give us some direction, but we don't know. And this credit card debt, if it lingers, I know, Christine, you always say, pay it off right away, there's confusion (ph) for that.

LEMON: Credit card debt is a huge issue, but hold on, this is between Christine Romans and I, because we have been talking about this, this whole disconnect, right? Because people will say one thing if you give them a survey but what they're actually doing is not what they're saying, right? So --

ROMANS: Exactly. They say the economy sucks. And how do they handle it? They go out and shop.

LEMON: They go out and shop.

ROMANS: I mean, that's just what we're seeing.

LEMON: Did you remember when I said to you, I said, I don't see people adjusting their lives so much as to what the rhetoric is. And if you look at -- Let me just give you one other indication of what we're talking about. Oil prices are at their lowest level in nearly a year, gases down 6 percent in a month.

ROMANS: In eight states, the average gas price is lower than it was a year ago. And you have got the trend, you know, the steam is coming off of that oil market too. But you don't suddenly see people saying, okay, great, the way they were saying, oh gosh, gas costs so much. So, when things are bad, they worry about it. When things are good, they don't mention it.

LEMON: And we were talking about the high price of stuff, right? And wo you know what people talked about at the dinner table, how cheap turkeys were.

HARLOW: They were more than last year.

LEMON: But they were still saying that they were --

ROMANS: There were deals.

LEMON: There were deals.

HARLOW: Go ahead.

STEWART: Also people are working right now. Even though prices are high, the number of people who are working is still very encouraging. There are still almost two jobs for every one person. So, people do feel some confidence. It's not making these higher prices any better or distorting this reality, but it gives you some confidence, it gives you an excuse.

ROMANS: Can I say something? You mentioned the buy now, pay later.

STEWART: Yes.

ROMANS: I'm really concerned about that. That's a higher share of these sales, which is fine if it's zero percent interest. A lot of these deals are. But don't fall behind on those payments or you'll really get hurt. Also the store credit cards, the APR now in some of these are 29 percent on some of these. So, sure you get a deal when you open up the store card. You must pay it off or the 25 percent discount is just eaten up in two months with a higher interest.

[07:25:00]

HARLOW: I think it's -- so we heard a few months ago Jamie Dimon, head of JPMorgan, said there's an economic hurricane coming, we just don't know what size, right? And then tomorrow, we have Brian Moynihan on the program, the CEO of Bank of America, and Bank of America, both those banks have a real pulse on the consumer, and he's been much more rosy. So, it would be interesting to hear sort of what they think, seeing -- they see all the credit data, they see all of this stuff and what --

ROMANS: And they see what's in your bank account and what you're doing with what's in your bank account. I think the jobs picture is exactly right. We still have a very robust job market. We have a lot of savings still. For two years people, didn't go anywhere and spend their money and they've built up savings. Now, they're spending it on travel, on shopping and on the things they want.

LEMON: Is it us? Is it the media?

COLLINS: But how does this factor into what Jay Powell is doing? Because the questions of about what people are seeing and watching on television and reading in the paper, the real question is what he does. And is he going to raise interest rates again because of what that's affecting and how it's changing people's buying habits of homes and big things like that?

STEWART: Right. With the Fed raising interest rates, it's this deliberate effort to try to make things more expensive so it kind of cools spending. But right now, this is one of those abnormal economic phenomenons that we've observed.

I think the question, looking ahead, is not are we going to see more interest rates, because I think certainly we are, it's going to be, is it going to be a smaller amount and the frequency.

LEMON: But I liken it to what happened during the election where all of the sort of pundits and people got it wrong because the public was certainly in one place. So, are we reading this wrong again? Do we have the right metrics?

ROMANS: I've told you, how many times have said, the pandemic broke the charts. So, yes, we're reading it wrong. Something -- everyone is confused about what the economy is doing, right? I mean, Mark Zandi, an economist we all follow, said, I'm looking at all these numbers, I'm really having a hard time finding something recessionary going on here. I mean, you have got people still spending money, people still earning money. You're right to point out that inflation is still far outstripping income. But a lot of executives, CEOs say they expecting to raise wages again next year because they want to keep their top talents. So, it's this push-pull.

HARLOW: How do you explain that with what we've been on the reporting on the program, which is all of these layoffs at Silicon Valley companies that seemed like they were bulletproof? Is this about advertisers pulling back so they're getting hit but no one else?

STEWART: Well, I think that especially the tech sector, these are headline-grabbing moves. I mean, there are layoffs in other areas as well. I think it's hard though for the tech sector to compete right now because there's this competition for eyeballs and it's just very attention-getting. It's kind of --

ROMANS: They exploded during the pandemic. They got too big. And they were hiring like it was the roaring '20s, and it's not the roaring '20s. They're getting back to more basics, I think. And those layoffs are big but many of them are still at a bigger headcount today than they were in 2019.

COLLINS: Yes, and it raises questions about what that structure looks like.

LEMON: And just real quickly, how many jobs do they account for, the tech sectors that we're seeing?

ROMANS: The tech sector, oh gosh, it counts for a lot of the growth of the past five years, but it is still just a segment of the economy. It does not represent the entire economy at all.

STEWART: And they're still hiring. I know someone who just got a great tech job just a few weeks ago. So, they're still looking for people.

ROMANS: Anecdotally, people are still getting hired, or still job- hopping.

COLLINS: We're going to be watching it closely. We'll see what Jay Powell says. Thank you both, Marc, Christine.

We also have dramatic video this morning, a man who fell overboard, we told you about this last week, on a Carnival cruise ship, he was in the water for hours, we now have the moment that the Coast Guard spotted him in the open water.

LEMON: Just a little speck. Look at that.

Kim Jong-un's daughter making a public appearance for the second time this month, sparking rumors of a possible succession plan.

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