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Xi Set To Secure Third Term In China, Defends Zero-COVID Policy; Two Major U.S. Supermarket Chains To Combine; Drought-Lowered Mississippi River Reveals 19th-Century Ship. Aired 5:30-6a ET

Aired October 17, 2022 - 05:30   ET

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

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CHRISTINE ROMANS, CNN ANCHOR: Chinese leader Xi Jinping pushing a nationalistic top-down vision Sunday at the opening of the 20th Communist Party Congress where Xi is set to secure an unprecedented third term in power.

Right at the outset, Xi defended his rigid zero-COVID policy, a policy that has led to frequent huge lockdowns, crippling economic growth, and widespread public frustration.

(BEGIN VIDEO CLIP)

XI JINPING, CHINESE PRESIDENT (through translator): We will continue to strive for peaceful reunification with the greatest of sincerity and the utmost effort, but we will never promise to renounce the use of force and we reserve the option of taking all measures necessary. This is directed solely at interference by outside forces and a few separatists seeking Taiwan independence.

(END VIDEO CLIP)

ROMANS: All right. CNN's Steven Jiang is live in Beijing.

He was speaking there about Taiwan. Steven, what are the takeaways from this major speech?

STEVEN JIANG, CNN BEIJING BUREAU CHIEF: Well, Christine, the main takeaway of that speech and his ruling philosophy is actually now very clear -- that is the only way to restore China's rightful place on the global stage is by destroying the party's dominance in every aspect of Chinese society. And he has proven himself to be the man who can make it happen in the last 10 years.

Now, from their perspective, he said all the right things, including a promise to renew economic growth by focusing on innovation. But critics have long said innovation has been stifled under him, precisely because of his government's sweeping crackdown on the private sector, especially on the tech industry.

And, of course, the sharp economic slowdown here is also, in large part, due to his insistence on that zero-COVID policy you just mentioned, despite mounting evidence it is not working.

But if you listen carefully to what he said, one term he used time and again was to struggle, to fight. He talked about fighting COVID, fighting corruption, fighting separatists in Hong Kong and Taiwan -- and without naming the United States, fighting hegemony.

So it's very clear he is unlikely to back down from any of his hardline positions and policies, including zero-COVID, including on his desire to reshape this U.S. world order. So that, of course, will have long-term implications not only for China but also for the world because if there is one thing we are clear in this very opaque political system, that is he is here to stay --

ROMANS: Yes.

JIANG: -- and likely far beyond that third 5-year term you just mentioned, Christine.

ROMANS: Yes, casting himself as the helmsman there.

All right, thanks so much, Steven Jiang. Nice to see you.

Chinese President Xi Jinping and the Party Congress speech also underscored China's resolve to reunify with Taiwan despite the fact that it has never controlled the self-governing island.

CNN's Will Ripley live in Taipei, Taiwan with more. And you just -- you heard that sound bite we played in Steven Jiang's introduction. I mean, this is -- this is a Chinese leader who is being very forceful here about his intentions.

WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: And I watched it live, Christine, along with so many millions of people here in the region, certainly here in Taiwan. The government watching very closely. The general public, not so much. They know that it's happening but they have other things to go about with their lives because the borders are open, businesses are open. Life is relatively normal here.

But what was noteworthy watching the broadcast is every time he talked about Taiwan, Christine, the audience would erupt in -- as spontaneous as you can get in a carefully-scripted event like a Communist Party Congress where there is simply no room for almost anything but what's on the script. And yet, people stopped and they applauded when he talked about taking Taiwan back by force, if necessary.

[05:35:03]

This is something that is not new for the leadership and the people here in Taiwan who over the last 70-plus years of having their own government, their own -- what is now a democracy -- a hard-won democracy that people fought and died for and served years in prison to get. They -- these words from Beijing -- I would say they ring hollow. But, of course, Beijing now has a massive military to back it up. And as a result, the government here issues rebuttals whenever Xi

Jinping or other communist rulers make statements that Taiwan is their territory that will be reabsorbed into the mainland. But Taiwan says that won't happen unilaterally and it certainly won't happen willingly.

And that's why they're throwing big dollars -- billions of extra dollars every year into their defense budget. They're buying more weapons from the United States. They're trying to modernize and update their military strategy, looking at lessons learned in Ukraine. Because even though life here feels normal, unlike zero-COVID China, people do know that at any moment that could change and they want to be prepared to defend themselves if and when the time comes, Christine.

ROMANS: All right, Will Ripley for us. Thank you so much -- from Taiwan for us this morning.

Let's bring in Josh Rogin now, CNN political analyst and columnist for The Washington Post. Josh, so nice to see you.

You know, you wrote this piece in the -- in The Washington Post -- this op-ed -- "Has Biden altered the one-China Policy? Yes and no." Explain.

JOSH ROGIN, CNN POLITICAL ANALYST, COLUMNIST, THE WASHINGTON POST (via Webex by Cisco): Well, good morning, Christine.

I think, as Will just laid out so expertly, we're facing a period of heightened tension with -- between the United States and China on Taiwan and it seems like Xi Jinping is determined to reunify one way or the other.

And the biggest question in Washington is will the U.S. come to Taiwan's aid. Now, our official policy is that we don't say, but President Biden has said four times that we would, and that could be confusing to a lot of people both inside the government and around the world. And what I found out by talking to a lot of top U.S. officials is that actually, what has happened is that U.S. policy has changed and the President of the United States made that decision himself, and the staff is forced to go along with it. But the bottom line is that we don't know whether or not that will be necessary because we don't know what Xi Jinping plans to do.

ROMANS: Right.

ROGIN: So while we have moved to a more aggressive position, the ball is still in Xi Jinping's court. It'll be up to him whether or not we have peace or war.

ROMANS: Yes. At the outset of this change in tone from the president, it was thought to be a gaffe, but it's happened enough times. Listen to one of those examples. This is the president talking to CBS's Scott Pelley.

(BEGIN VIDEO CLIP) JOE BIDEN, PRESIDENT OF THE UNITED STATES: There's a one-China policy and Taiwan makes their own judgments about their independence. We are not moving -- we're not encouraging there being independent. We're not going to let -- that's their decision.

SCOTT PELLEY, CBS NEWS ANCHOR: But would U.S. forces defend the island?

BIDEN: Yes, if, in fact, there was an unprecedented attack.

(END VIDEO CLIP)

ROMANS: How do you think President Xi interprets this?

ROGIN: Well, I'm quite sure that President Xi sees this as an escalation, but what the Biden administration would say is that they are responding to China's escalation. In other words, it's a chicken and an egg. Did they make the situation worse or did we?

I think most of the evidence shows that the fragile peace that has existed between China and Taiwan for 50 years was based on the idea that China would not take the island by force. Now that they have abandoned that, that's a whole new game. So I do think that the onus on the escalation falls more with the Chinese side. But, of course, they don't see it that way.

But in the end, it will be up to both sides, including the Taiwanese -- so all three sides, actually -- to manage this very dangerous --

ROMANS: Yes.

ROGIN: -- situation because nobody wants war. War is not in anyone's interest, but it will take all three sides to prevent it.

ROMANS: I want to ask you about this. Earlier this month, the Biden administration imposed these restrictions on exporting semiconductors and chipmaking equipment to China. This has been a really interesting story in the business world that reflects, I think, that very poor relationship we've been seeing on the diplomatic front.

How do you foresee the political and the economic tension here continuing for the U.S. and China?

ROGIN: Right. It's so interesting because if you remember when the Trump administration waged a trade war with China, Democrats were against it. And, in fact, candidate Biden railed against it while he was running against President Trump.

But now, the Biden administration is starting -- or I would say continuing a tech war against China. We're in the middle of that tech war. So not only are we going to try to outcompete the Chinese by going faster, we're going to try to slow them down. That's a policy that has broad implications. It's going to lead towards a broad decoupling of the U.S. and Chinese tech sectors, and that affects almost every industry. And that has costs and risks that's not an easy thing to do and it's never been tried before. So what we're seeing is a prolonged period of where the U.S. and China are going to stop cooperating on all sorts of things from semiconductors to A.I. --

ROMANS: Yes.

ROGIN: -- to you name it. And this is just the beginning and it's not clear which side is ultimately going to prevail.

ROMANS: And correct me if I'm wrong. Those Trump-era tariffs on China are all still on, right?

[05:40:00]

ROGIN: Almost all of the tariffs are still there. Now, this is where you get into the politics of the China issue because the Biden administration doesn't want to seem weak on China, especially going into the elections, so they're not going to remove the tariffs. And, of course, the Chinese haven't done anything to warrant removing the tariffs.

But at the same time, they've got to have their own policy. That's why they're focusing on tech. They think this is where the real competition is, at least for the next few years, and I think they're right about that.

ROMANS: Josh Rogin, CNN political analyst. Nice to see you this Monday morning. Thanks, Josh.

ROGIN: Likewise. Thank you.

ROMANS: All right, more economists now fear the probability of a recession in the next year. And hearing aids are about to become much more accessible.

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ROMANS: All right. Our Romans' Numeral this morning, 63 -- as in 63 percent -- the probability of a recession in the next 12 months, according to economists surveyed by The Wall Street Journal. That's up from 49 percent just three months ago. The mood darkening amid high inflation and rising interest rates. The good news, though -- those economists worried about a recession think it will be short and shallow.

[05:45:12]

Looking at markets around the world, Asian shares have closed mixed. European markets are higher this morning. And following that trend, U.S. markets also leaning up here.

U.K.'s new finance minister, Jeremy Hunt, is expected to make an announcement on the country's tax and spending plan later today.

There are stock index futures right now. It looks like Wall Street wants to bounce back after a volatile last couple of days for markets there overall.

Retail sales overshadowed solid earnings from corporate giants like JPMorgan Chase and United Health.

Gas prices, if you're keeping score, held steady overnight, still at $3.89 a gallon.

Investors are looking for some calm after the storm of sometimes conflicting economic news. Grim news on inflation. Prices rose four- tenths of a percent in September, up 8.2 percent from a year ago. But this -- excluding volatile food and energy prices, the core Consumer Price Index had the biggest gain since 1982.

The Federal Reserve is in a tough spot here as it continues its conquest to tame inflation. Inflation sitting near 40-year highs.

Corporate earnings season here this week with reports from 300 companies -- banks, consumer giants, and airlines. Also this week, fresh data on manufacturing, industrial production, existing home sales.

And Americans filing for unemployment benefits rose last week, a sign that a tight labor market may be -- may be showing signs of cooling. Fresh jobless claim numbers will be released later this week.

All right, this big story. Two of the country's top supermarket chains are merging. Kroger announcing plans to buy Albertsons in a nearly-$25 billion deal.

I want to bring in CNN business reporter Nathaniel Meyersohn who covers these companies. Why are they merging?

NATHANIEL MEYERSOHN, CNN BUSINESS REPORTER: So, the companies are facing competition from Amazon, Walmart, Target, Costco, Dollar Stores. They want to merge to be able to fight off these competitors. The merger would create one of the largest grocery chains in the United States.

Last year, they had -- the two companies had more than $200 billion in sales, nearly 5,000 stores, 700,000 workers. That would be one of the largest --

ROMANS: Wow.

MEYERSOHN: -- private employers in the United States.

ROMANS: How would I feel a difference? I mean, what are the CEOs saying about different products or pricing, or what?

MEYERSOHN: Right. So, the companies say it's going to mean lower prices for consumers, but there's a lot of skepticism about this claim. Corporate consolidation often drives up prices for consumers. Analysts also say this merger, which would be one of the largest in U.S. retail history, would lead to store closures and also make it much more difficult for mom-and-pop grocers and for the smaller grocers to compete. So there's -- you already see a lot of opposition to this deal. Bernie Sanders said it would be an absolute disaster. He called on the Biden administration to reject the deal. Small business advocates also are in opposition. So it's going to be an uphill climb to get this deal --

ROMANS: Interesting.

MEYERSOHN: -- through regulators.

ROMANS: Quickly -- we saw -- we know that prices in grocery stores keep rising up 13 percent in September. How are shoppers adjusting to higher grocery store inflation?

MEYERSOHN: Right. So, it's a tough time right now for shoppers at the grocery store. We see them buying fewer items when they go to the store. They're switching from more expensive name brands like Coke and Pepsi to stores' private labeled brands -- Costco's Kirkland Signature, Walmart's Great Value -- those sorts of brands.

We see them making quick trips to the store, not loading up their pantries like they were earlier in the pandemic. And then, more shopping at Dollar Stores and discount stores. There's a fast-growing German grocery chain, Aldi.

ROMANS: Yes.

MEYERSOHN: Many viewers -- maybe an Aldi has opened up in their neighborhood recently. Aldi said that more than a million new shoppers have gone to their stores over the past year, which it attributes to higher inflation and consumers --

ROMANS: Interesting.

MEYERSOHN: -- looking to save.

ROMANS: So, in terms of the big supermarket merger -- I mean, what are -- what are officials there saying -- how do they say they'll be able to lower prices? I know you say there's skepticism about that. Is it with private labels or what?

MEYERSOHN: So they say that cost savings -- they're going to be -- the companies say that they're going to be able to save $500 million from the -- from the deal. They're going to invest in lowering prices for consumers.

Albertsons is known for having higher prices than a lot --

ROMANS: Yes.

MEYERSOHN: -- grocery stores, so merging with Kroger would be able to allow them to invest in lower prices. Also, more private label brands. Online -- you know, they'd invest in online as well.

ROMANS: Interesting.

All right, Nathaniel Meyersohn. A lot going on in your beat these days. Nice to see you. Thank you.

All right. Early voting begins today in Georgia. More on the countdown to midterm election day ahead. Plus, new documents reveal the Secret Service knew about the potential for violence on January 6. Why they didn't give a warning, ahead on "NEW DAY."

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[05:54:15]

ROMANS: All right. Record low water levels on the Mississippi River revealing the wreck of a 19th-century trading ship. Officials say the shipwreck is believed to be the Brookhill, a trading vessel that was built in 1886 and it sank along with its sister ship in a major storm in 1915. Ninety percent of the ship's hull is exposed.

Severe drought across the Midwest has dropped the Mississippi River to record lows.

All right. Residents of Jackson, Mississippi are being hit with massive water bills in the middle of a months-long water crisis. One woman tells CNN she was shocked when the city sent her a bill for nearly $4,000. She says the tap water is still brown, the pressure is low -- a problem many families in the city are facing since the water plant underwent repairs.

[05:55:00]

The Jackson City Council president says water billing, quote, "has been a shortcoming of the city for way too long." And it's asking residents to reach out to the city if they believe their water bill is incorrect.

All right, the Buffalo Bills get some revenge against the Kansas City Chiefs in a highly-anticipated rematch from last year's playoffs.

Carolyn Manno has this morning's Bleacher Report. Good morning, Carolyn.

CAROLYN MANNO, CNN SPORTS CORRESPONDENT: Hey, good morning.

And the latest installment of this rivalry certainly lived up to the hype, and that's really saying something after that memorable overtime divisional round playoff game back in January that so many people remember.

Patrick Mahomes and Josh Allen picking up right where they left off on Sunday. Down three late in the fourth quarter and Allen showing his flexibility, going airborne here -- hurtling over a defender to earn a hard-fought first down. It was that kind of day.

And then his arm would be on full display just a couple of plays later. A dime to Dawson Knox in the end zone to give Buffalo the lead.

Patrick Mahomes would get the ball back with plenty of time left. And Bills fans and the team's secondary remembering that crushing playoff loss in this stadium nine months ago thanks to some late-game heroics from Mahomes. But not this time. An interception with just 51 seconds remaining, sealing the 4-point win as the Bills improve to 5-1 on the season making a statement atop the AFC standings.

The Eagles are the only unbeaten team in the NFL, but this one did not come easy against their division rival, the Cowboys. Dallas cutting a 20-point halftime deficit to just three in the fourth quarter last night.

Quarterback Jalen Hurts responding by marching his team down the field on the 13-play scoring drive to put the game away as the Eagles get the win -- 26-17 the final there.

And after attending his old (INAUDIBLE) wedding this weekend, Tom Brady made the trip to Pittsburgh. But there was nothing to celebrate there. Brady chewing out the offensive line. The Bucs' offense was abysmal in the red zone against the Steelers.

Mitch Trubisky coming off the bench in place of the injured Kenny Pickett and delivered in a big, big way. A touchdown to Chase Claypool put them up eight.

Brady and the Bucs had the chance to tie it with a 2-point conversion but Devin Bush knocking it away as the Steelers snap a 4-game losing skid with a 2-point win over the Bucs. The Bucs are now 3-3 -- not exactly how Brady drew it up, so far.

It's a good time to be a New York football fan, though. The Giants won and the Jets upset the Packers by 17 at Lambeau. Jets rookie Sauce Gardner celebrating by wearing the famous foam cheese head. Green Bay fans not amused by this and neither was Packers' receiver Allen Lazard, knocking the cheese off as he ran into the locker room. Sauce got the last laugh, though, and he also got the cheese. He carried it with him, as a souvenir, to the team bus.

I feel like there is a sauce cheese joke somewhere in there. It's too early for me to even put it together. So we'll move on to playoff baseball.

Winner-take-all tonight between the Yankees and Guardians. Harrison Bader coming up huge for the Bombers on Sunday to avoid elimination. The trade deadline pickup slamming his third home run of the series to give New York the early. And Gerrit Cole would do the rest, striking out eight over seven innings to get his second win of the series.

So the Yankees win 4-2 to force a decisive fifth game. The team is back at Yankee Stadium tonight at 7:00 eastern on TBS.

The National League Championship Series opening tomorrow night in San Diego as the Padres host the Phillies.

And lastly this morning, the SEC fining Tennessee $100,000 in response to the fans who stormed the field after this thrilling win over Alabama on Saturday. Look at this scene.

So, the fans -- in case you missed this -- they tore down the goalpost and threw them in the Tennessee River, OK? And then the Vols Twitter page said that they loved that moment. But there is one problem with this moment and that is that they need to play next week and they need new goalposts now. So they set up a fundraising page hoping to raise 150 grand for the new posts and they have raised about half of that amount already.

This is why you love college football. So the donations had 16 bucks, right? That's the number of years since they beat Alabama. Don't tell Kaitlan Collins about this --

ROMANS: I know. Poor Kaitlan.

MANNO: -- right? Fifty-two dollars and 49 cents the final score or $1,019.15 cents, which is the game's capacity on Saturday.

ROMANS: And they took that goalpost. It was amazing to see them tear it down. They took that goalpost and they dragged it into the river. I mean -- I mean, that was real dedication.

MANNO: Unbelievable, unbelievable. College football -- the best.

ROMANS: Oh my gosh, what a rivalry.

Nice to see you. Nice to see you this morning.

Thanks for joining us. I'm Christine Romans. "NEW DAY" starts right now.

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