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Ian Bremmer is Interviewed about China; Southwest Cancels More Flights; Andrea Campagna is Interviewed about Hosting Tourists During the Storm. Aired 8:30-9a ET

Aired December 27, 2022 - 08:30   ET

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

[08:30:00]

MICHAEL GOLD, NEW YORK TIMES REPORTER WHO BROKE NEWS ON GEORGE SANTOS: That we pulled up that suggested he has admitted to, to a case of check fraud. And one thing that we've seen is that Brazilian media outlets have released new details and delved into that more and have corroborated our reporting.

KAITLAN COLLINS, CNN ANCHOR: Well, he also corroborated your reporting by admitting that he lied about those big parts of his resume that you first uncovered. So, thank you for joining us to talk about this. I'm sure we'll have many more questions and conversations about this going forward.

POPPY HARLOW CNN ANCHOR: Yes.

COLLINS: So, great reporting.

GOLD: Thank you.

COLLINS: All right, just ahead, China opening up partially. We'll tell you about the latest changes, incredibly significant changes, to their travel policies as they are easing Covid restrictions amid a surge in case numbers and those protests in recent weeks.

(COMMERCIAL BREAK)

HARLOW: Welcome back to CNN THIS MORNING.

Chinese President Xi Jinping is calling for a new health strategy as the Covid situation in China worsens. His comments come after China abruptly abandoned its zero Covid policy this month following nearly three years of lockdowns, quarantines and mass testing. A sudden change that has resulted in a huge wave of infections leaving hospitals badly strained, pharmacy shelves empty. And starting on January 8th, international travelers flying to China will only need a negative PCR test. They will no longer be required to apply for digital codes used to track people's health or quarantine. A lot of changes.

Let's talk about that is happening in China right now with Ian Bremmer, president of the Eurasia Group and the author of "The Power Crisis." Ian, thanks. Good morning.

IAN BREMMER, PRESIDENT, EURASIA GROUP: Good morning.

HARLOW: I mean this is like, and then now they're allowing Paxlovid, when they didn't allow foreign made vaccines.

[08:35:01]

Xi Jinping has done a complete 180, and I -- it seems shocking, really unexpected, and I wonder what you think is driving it.

BREMMER: It is a stunning 180. This was - and a lot of people thought maybe after he got that third term at the party Congress a couple months ago then they would open up. They had no intention of doing that at all. Coming out of the Congress, Xi Jinping was saying this is the most successful Covid policy in the world. It was only when the demonstrations began that suddenly it got through to Xi Jinping that this was unsustainable.

And he didn't just tweak it, he didn't prepare for it, he suddenly let it rip.

HARLOW: Yes.

BREMMER: And, you're right, that what this means is you're going to see enormous spread of cases and a lot of people, a lot of elderly and Chinese particularly that either aren't vaccinated at all or are only vaccinated with non-mRNA Chinese vaccines that are very much less effective than what we have in the west. And that means you're going to see extraordinary numbers of deaths, or at least there will be extraordinary numbers of deaths. The Chinese government, of course, stopped recording most Covid deaths in conjunction with this new policy.

HARLOW: Right. Right.

COLLINS: And how do you think that's going to reflect on Xi?

BREMMER: Internationally it's going to reflect pretty badly because what this means is that Xi Jinping can no longer be counted on to be consistent in what he says and what he does going forward. We see we have a lot less data coming out of China than we did five, ten years ago when Xi Jinping first took over. What does that mean? If you're an investor, you need metrics, you need data. If you have no idea what's happening in the country, it makes it - you're a lot more compelled to feel like that's a safe investment for you going forward. If you're thinking about -- if you're Japan and you're talking about doubling, you know, your arms spending, the fact that Xi Jinping is a leader that seems so volatile makes you more scared about your own national security. So, you'll spend a lot more on your military. I mean on pretty much every front this is bad news, even though we will see China's economy bounce a lot stronger and a lot more quickly as a consequence of this policy.

HARLOW: Well, can we talk about China's economy and the U.S. economy and how, like, Apple and what happened at the Foxconn factory ties into all of this because I just wonder what you think this -- I think companies have realized, like Apple, oh, my gosh, to be so reliant on a country like China given the policies that they put in place can cripple you, but at the same time -

BREMMER: Well, and also given the - well, yes.

HARLOW: I would just say, at the same time, Hank Paulson, the Treasury secretary -- former Treasury secretary said last year, remember, it is impossible at this point to decouple the United States economy and China's economy. So, where does it leave us?

BREMMER: Well, suddenly a sudden and complete decoupling of the kind that we've seen between Europe and Russia would throw the United States into an immediate and very sharp recession. And American corporations don't want that.

But let's keep in mind that when the Americans and the Chinese were meeting over the Russian invasion, we told the Chinese, if you provide military support to Russia, we will put direct secondary sanctions on you. In other words, we were prepared to decouple from the Chinese government in really serious ways. In ways that would really hurt our economy if they behaved in ways that we didn't like. And, of course, that sends a message to U.S. corporations as well.

The decoupling that's actually happening right now is principally in high tech what we call dual use areas that are both economic and directly for military and national security. And principally we're talking semiconductors, for example. Big issue about TikTok. They'd be forced to sell off their U.S. branch. That kind of decoupling can and will happen and companies that are in the high tech space are going to be faster in moving their production away from mainland China.

COLLINS: But also, Ian, just to bring it back to these changes that we're seeing from China, what does it look like in your sense or what is your prediction of when international travelers are actually ready to go back to China, what that looks like, because, you know, we don't actually know how many visas or when they're going to restart -- to start issuing those visas. We don't really know how many flights are going to be going into China right now. It's like 6 percent, I think, of what was happening in 2019.

So, do you think international travelers will be going back to China? What will that look like, do you think?

BREMMER: Well, first of all, I think Chinese travelers are going to be traveling internationally almost immediately. And I think the tourism dollars that will come through will be a major spike. That's been completely cut off from most of the last three years. So, economically, that's what we're going to feel in the United States, in New York, in L.A., in, you know, big, international tourist cities. That's coming immediately.

But in terms of westerners, look, I -- everyone I talked to that does serious business in China is very concerned about the fact they haven't been able to meet with any of their interlocutors on the ground, and zoom calls with the Chinese is not getting business done.

[08:40:10]

So, they're quite -- they feel it's quite urgent to start traveling. And I would say as soon as they can get visas, they're going. And, of course, it's -- bureaucratically it's going to be difficult and the people with the best relations will get their visa stamped most quickly.

But I do expect, given everything else we've seen from Xi in the past only several weeks that you're going to see this country open up to travel very, very quickly.

HARLOW: Ian Bremmer, thank you very much.

BREMMER: (INAUDIBLE). Thank you.

HARLOW: Appreciate your insight.

Just ahead, you know, gas prices are way down. How much are you going to pay more, though, at the pump in the new year. We have that reporting ahead.

(COMMERCIAL BREAK)

[08:45:21]

HARLOW: We're just talking about if travelers need a drink at the airport because travel has been such a nightmare. And another day of disruption for air travelers across the country trying to just get home or to their destination. More than 2,800 flights canceled today, most of them Southwest Airlines struggling to get back on track after a major technical meltdown of their communications system.

Joining us now, CNN business correspondent Rahel Solomon, CNN international correspondent Marc Stewart.

Well, didn't you used to work for an airline related company?

MARC STEWART, CNN INTERNATIONAL CORRESPONDENT: I spent time in grad school writing for the points guy, so I -

HARLOW: So, what is going on?

STEWART: Well, it is -- let's just say a plethora of problems. It's not just one thing. And these issues really started to build back in the summer of 2021 when people started to fly once again. It is, of course, the pilot shortage, the flight attendant shortage, the logistical, the IT issues that Southwest is face, of course the weather. But above all, airlines right now are on this big pressure to keep their profit margins high. So, they are packing planes, there are no extra seats and they're trying to beef up schedules. Airlines only make money when planes are in the sky. So, if there is a hiccup along the way, everyone feels it. There is no extra seat on another flight. And that's why this is hitting so hard.

COLLINS: Well, the referee that we interviewed earlier, he was retiring.

HARLOW: Poor guy.

COLLINS: It was his last game -- last PAC-12 game that he was refereeing. And he was talking about how his flight got canceled, and then they had another one, but it was overbooked by 22 seats.

STEWART: Right.

COLLINS: So they asked for 22 volunteers. You know, normally you hear them ask for one or two.

Before we get to Rahel, I just want to -- it seems like this is an issue that Southwest could have prevented, that it's not actually about the weather we've seen in recent days.

HARLOW: Yes, years ago. Years go.

COLLINS: It's more - more systemic.

STEWART: Yes. Well, as we heard from the CEO, I mean he almost -- he issued an apology and acknowledged that things were not where they should be. Many companies are dealing with these antiquated software systems and such. But when you are a customer-facing business like an airline, maybe that's not something you should delay.

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Right. And to that point, the CEO did tell "The Wall Street Journal" that they're committed to investing in those systems, but that they, you know, essentially did not commit - did not sort of come through this time around and that promised the company will invest in better systems, modernizing the operation, as we talked about.

HARLOW: Let's talk - let's talk about gas prices. Our colleague, Matt Egan, has some interesting reporting on the fact that there are going to be less beginning of this new year, but then more?

SOLOMON: Yes. So, gas prices have been really volatile, right? Anyone who owns a car, who has filled up their tank this year --

HARLOW: Me.

SOLOMON: Exactly. Me too. You know that prices have been sort of all over the place.

So, Gas Buddy just put out its new forecast for 2023. And the forecast for the year is about $3.49 a gallon. That doesn't necessarily mean we're going to be sort of staying at $3.49 all year. But to put that in perspective, we're tracking this year to end the year at about $3.99. So that is still about 50 cents savings per gallon. That should mean about $270 for the average American family.

That said, this sort of caveat is, there is a high level of volatility and uncertainty. So, that is the hope and we should say that Gas Buddy was pretty much right on the dot this year round. So, you know, here's hoping. And the government forecast is the same, about $3.49 a gallon. Heading into the summer, though, we're probably going to see that move

back closer to $4, which we see every season, right, as demand starts to pick up, prices also go up. So, you know, we could be sort of still in for some swings, but we are not expecting, knock on wood, to see those $5 a gallon that we saw in June of this year when prices were -- had really spiked.

COLLINS: Well, and it's all relevant to this conversation. A lot of people, we just spoke to one woman who Adrianne brought us there -

HARLOW: Who were driving.

COLLINS: Having to drive and get rental cars because of what's happening with their flights. In addition to this - this -- what we're seeing over the last few days, how are we seeing consumer habits changing as a whole because of the up and down that we've seen with gas prices.

STEWART: Well, Americans in particular have become very nimble. At the beginning of the pandemic, people were certainly complaining. Well, I should say, at the beginning of this gas crisis back in - it was March is when we really saw those elevated prices. People were complaining. By the end of the summer, AAA actually did a survey and found that three-quarters -- about three-quarters of Americans actually made adjustments in their routines. They combined errands. They ate out less often. The -

SOLOMON: $5 was that mark, yes.

STEWART: It was that - it was that threshold. And they adjusted. And so this was perhaps a learning experience that we need to - we need to be very savvy when it comes to how we move.

COLLINS: Yes, we'll see what it does going forward.

Mark and Rahel, thank you both for joining us this morning on this.

HARLOW: Thank you both.

SOLOMON: Yes.

STEWART: Thanks.

[08:50:01]

HARLOW: OK. What are you doing? What are you doing Saturday night? Anderson and Andy are back for another global celebration. Join them for "New Year's Eve Live" from Times Square starting 8:00 p.m. Eastern Time on CNN Saturday. Don will join them as well hosting from New Orleans.

Well, just ahead, a western New York couple proving why Buffalo is known as the city of good neighbors -- they surely are -- after they opened their home to a group of South Korean tourists stranded in the storm. One of those good neighbors joins us.

(COMMERCIAL BREAK)

COLLINS: Buffalo has long been called the city of good neighbors. And our next guest is exactly why it has that name.

During the height of the massive winter storm that Buffalo saw, a couple living in the suburb of Williamsville opened their doors to a group of ten South -- stranded South Korean tourists after their van was stuck in the snow. And for the next two days they bonded over football and over their mutual love of Korean food.

So, joining us now is the homeowner, Andrea Campagna.

Andrea, we're so impressed with you and your story and your grace in hosting this family. Can you just kind of tell us how you met them, how you met these tourists. I'm told they just came to your door and they kind of knocked and you thought maybe it was a neighbor.

ANDREA CAMPAGNA, HOSTED 10 KOREAN TOURISTS STRANDED IN BLIZZARD: Yes, we did. We heard a knock at the door around 2:00 p.m., right when the storm was really starting to kick up, and two gentlemen were there asking for shovels. They said, we need help. And my husband went out to help them. He got about 10 feet out and realized he couldn't see anything. The snow was coming down really heavy. And then they said, we're part of a tour group. And soon ten people were in our home and freezing cold.

HARLOW: I love what one of the girls in the group sent you, this note, and she wrote, thanks to your help I was able to survive. Thanks to you I'm bringing special memories. I will never forget your kindness. Thank you so much. Merry Christmas.

I mean talk about a Christmas gift and a miracle that they needed.

CAMPAGNA: That was so heartwarming. She was unsure of her skills with English and so she handed me this written on a napkin. And it brought me to tears. It was really our pleasure to help them.

COLLINS: And so you guys -- what did you do during those two days that they were staying with you? I know you - you had luckily some food that you -- you had pork shoulder I think you said you had bought on sale and put in the freezer and you guys just started cooking together.

CAMPAGNA: Yes, and I think that that was really comforting for all of them, especially because during a blizzard there's not much to do.

[08:55:05]

They had found out that we actually had our first date at a Korean restaurant. And so all the women in the group got to cooking and they found out the dish that we had on our date and they recreated that dish for us.

HARLOW: Wow. Do you think you guys will keep it in touch?

CAMPAGNA: We will. We really feel we've made lifelong friends. And several of them have invited us to visit them in Korea.

COLLINS: Oh, that's so awesome.

HARLOW: You've got to go. You've got to go. And some airline should fly you there for free because you were so good, just saying. Just saying.

COLLINS: Yes, subtle hint, hint.

Andrea Campagna, though, this is - this is such a heartwarming story. We've been talking about all this misery that people have been experiencing.

HARLOW: Yes.

COLLINS: And especially what's been happening in your area, Buffalo, and outside Buffalo. So, thank you for sharing your story. Thank you for hosting them and for joining us this morning.

CAMPAGNA: It was our pleasure. Thank you.

HARLOW: All right.

COLLINS: Such a great story.

HARLOW: Good way to end it.

COLLINS: I know. What a great way to end it.

And "CNN NEWSROOM" is going to start right after this break. We'll be back tomorrow morning.

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