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First Move with Julia Chatterley

A Pakistani International Airlines Flight Has Crashed In A Residential Area Of Karachi; China Set To Pass Strict Hong Kong Security Law; China Scraps Economic Growth Target For 2020. Aired 9-10a ET

Aired May 22, 2020 - 09:00   ET

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

[09:00:15]

ANNOUNCER: This is CNN breaking news.

JULIA CHATTERLEY, CNN BUSINESS ANCHOR: You're watching FIRST MOVE. I'm Julia Chatterley and we begin with Breaking News this morning. A Pakistani

International Airlines Flight has crashed in a residential area of Karachi.

Pakistan's Aviation Ministry say they were more than 100 people on board. The flight PK 8303. I want to get straight to our Richard Quest now.

Richard, great to have you with us. Awful images at this stage. What more do we know about what happened?

RICHARD QUEST, CNN BUSINESS ANCHOR, "QUEST MEANS BUSINESS": Well, the flight was on its way from Lahore to Karachi. It was a commuter flight,

when according to the reports, and one is always very hesitant at this particular point. It's an Airbus A320. It's 14 years old, which is not

particularly old, and it's not particularly new for any sort of commuter plane that does workhorse routes like this would have been.

And according to the early reports, and we take them with a certain degree of caution, because you always have to wait for the black boxes to be found

and more details, but it would appear that the plane tried to make an approach to the airport.

For whatever reason, the landing gear had not extended. The plane did what's known as a go around. It was at a low level and if you look at the

pictures, and you look at the radar scope, it does appear that that was because it did not have height.

The pilots are then are believed to have made a mayday. There was some suggestions of loss of power, but we don't know, and then the plane crashed

into the residential neighborhood as you can see.

So, there are a number of facts which require verification and confirmation, and then the picture builds up.

But the headline if you like, is the plane was at probably one of the riskiest parts of flight; actually, it is the riskiest part of flight,

which is landing.

There would appear to have been some form of issue with the landing gear and the plane, then then crashed after the go around.

CHATTERLEY: I mean, this is an area of Karachi that we were just showing and you just mentioned there, residential areas. It's clearly populated.

There's lots of buildings. What do we know about survivors, Richard, or is it just too early to tell?

QUEST: I'm going to take this extremely cautiously, because the latest numbers suggest that there might have been some survivors, but we don't

know the confirmation and you have a computer screen and the latest white copy in front of you since I came down to come on air.

So, if you're seeing something different, please feel free to update my information.

The plane -- if we look, Pakistan Airlines, PIA had only just started flying again after the coronavirus pandemic had forced it to stop. This

particular 14-year-old aircraft was either on its first or second flight.

It had either gone into service yesterday, or it had just come back into service today. Now, that will be an issue.

And the reason it will be an issue as to see how these planes were maintained since the airline stopped flying back in late March.

None of the facts, I guess, we're going to discover here is that no individual fact is going to be conclusive. So, it will have been -- if the

landing gear hadn't deployed properly or extended properly, they should have been able to do X. So, we'll want to know why.

If they hadn't been able to land or we're troubleshooting something, we'll want to know why they did a particular action and not another action.

What we will be aiming to do, I mean, obviously, the first and most immediate part of this is obviously the finding of any survivors and giving

the proper treatment; thereafter, obviously, the proper treatment of those who perished.

Then you're looking for the black boxes, two of them: the flight data recorder, the cockpit voice recorder. The low altitude of this incident,

Julia, and the nature of this incident gives me great hope that both of those devices will be found and will be found in good condition.

They will explain the landing gear. They will give reasons for any mayday and they will give the full picture.

CHATTERLEY: Yes. And help us understand what happened here. Richard, thank you so much for your insights there. Richard Quest, of course, and we will

continue to bring you any further details as we get them throughout the day here on CNN.

[09:05:14]

CHATTERLEY: For now, the whole world is nervously watching the latest developments from China, too, and the National People's Congress. The

reaction, I think is concern and you can take a look at this for a few reasons.

China abandoning its growth targets for the year amid the COVID-19 battle and unveiling $500 billion worth of new stimulus for the economy. It's a

start, of course, but is it enough?

But I think, the more immediate concern, news that the Chinese Parliament readying a sweeping new National Security Law against Hong Kong overriding

freedoms that distinguish the territory from the Mainland.

Take a look at what we saw from Hong Kong stocks overnight, the steepest drop in five years today. We also saw pressure on Chinese stocks, too.

Banks with strong footprints in Hong Kong like HSBC and Standard Chartered, also falling as well.

Shares of luxury brands like Dior, LVMH that have big footprints in Hong Kong as well. As you can see seeing a bit of pressure there, too.

What does it mean for the rest of the world? Well, U.S. stock futures were down sharply earlier. We're seeing a bit of a turnaround essentially

trading flat at this moment.

President Trump promising a strong reaction if those measures are passed. Plus, a Bill has been introduced in the U.S. Senate that would sanction

officials who further threatened Hong Kong's freedoms, too.

All right, let's get right to the drivers and all the details from Hong Kong. As I mentioned, China's National People's Congress, set to pass a

sweeping new Security Law for the territory this week.

The legislation aims to control political dissent and put an end to pro- democracy demonstrations. Ivan Watson joins us right now.

Ivan, I saw one opposition lawmaker in Hong Kong said this is the end of Hong Kong as we know it. What more details do we have? And what further

reaction there.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It certainly feels like a pivotal turning point for this city, and I think it's important to

stress how different Hong Kong is from Mainland China as a result of a quirk of colonial history and bilateral treaties when it was handed over

from Britain to China.

Until 2047, it was supposed to maintain a degree of autonomy from the single party rule that exists in Mainland China, and as a result, here in

Hong Kong, the more than seven million people who live here are free to worship however they want.

They're free to stand out in the street and criticize the government or write whatever they want in a newspaper or say what they want.

And the internet is open and free here. The Facebook and Google and all of these applications in social media platforms that are banned on the

Mainland of China, just a short distance to the south, here you can use them freely.

This introduction of this proposed National Security Law by the National People's Congress, according to senior Chinese officials would include

seven clauses aimed at preventing stopping and punishing violations of national security, would criminalize treason, secession, sedition and

subversion against the Chinese government. It would establish a legal system and enforcement mechanisms for enforcement.

The government would be obliged here in Hong Kong to carry out a national security education. There would be the ability to set up National Security

Agency presence in Hong Kong. In other words, kind of secret plainclothes police here, and it would criminalize secession, sedition and subversion

against the Chinese government.

The Chinese government and members of the Hong Kong administration here are justifying this in response to more than six months of increasingly violent

protests that racked this city prior to the coronavirus pandemic.

Meanwhile critics of this, as you mentioned are calling it the end to Hong Kong as we have known it since the handover of 1997. Take a listen.

(BEGIN VIDEO CLIP)

DENNIS KWOK, CIVIC PARTY LAWMARKER: I just want to say to the international community that this is the end of Hong Kong. This is the end of one country

two system.

Make no mistake about it, that Beijing, the Central People's government has completely breached its promise to the Hong Kong people, a promise that was

enshrined in the Sino-British Joint Declaration and the basic law.

(END VIDEO CLIP)

CHATTERLEY: Chief Executive there has come under fierce criticism for one, not mediating, not providing any solutions to the situation, in fact,

criticized for causing the protests that we've seen and saw for many months before the pandemic.

What now, Ivan? What response from the Hong Kong government and what are the protesters saying in response?

WATSON: Well, look, I don't think it's any surprise that Carrie Lam, the Chief Executive effectively appointed by Beijing has embraced this

development and is in lockstep with the Communist Party in Beijing saying that the protesters posed a national risk.

Now, the Foreign Ministry, the liaison office of the Chinese central government have said, look, the freedoms of press and assembly and speech

that Hong Kong has enjoyed, they will not be affected at all by this. And I think it's hard to really believe that 100 percent.

If you've spent any time in a Police State, you do not have freedom of speech. That may exist written down somewhere in law in Mainland China, but

the fact of the matter is, the moment I show up with a camera, just 50 miles north of here and try to film somewhere, people will stop me. They

will check my documents.

If people speak out against the central government in China, there's a good chance that they will disappear mysteriously and be punished as doctors who

spoke out about the early days of the coronavirus pandemic were chastised by the Security Forces here.

The introduction of this measure bypassing Hong Kong's well-established Legislative Council suggests that those types of methods will come home to

roost here in Hong Kong.

And if you want an example of the climate of fear that has just suddenly sprouted up here, one Hong Konger I spoke with said suddenly his WhatsApp

group dried up.

Now, WhatsApp does not function without a VPN to the north of the boundary in Mainland China, but also it suggests that immediately, there are Hong

Kongers who feel what they message to each other, presumably in privacy could suddenly become something that could be used against them by the

Security Forces, which is what happens in Mainland China with its incredible culture of censorship and complete intolerance for any form of

dissent, whatsoever -- Julia.

CHATTERLEY: So, the perception is that the one country two systems is already gone by inference and two systems becomes one, and you have to

behave accordingly.

Ivan Watson, thank you so much for that update there. Not the only thing coming from the National People's Congress.

The Chinese government is not issuing another economic growth target for this year at the National People's Congress. But Beijing has announced a

$500 billion stimulus plan in an effort to create nine million jobs.

The official urban survey recently showed an unemployment rate of six percent, but many economists say the real number is likely much higher due

to the pandemic.

David Culver is live in Beijing for us.

David, we only have to look at what we're seeing elsewhere around the world and the impact of the shutdowns to look at that number and think, it

doesn't make sense here, but what are we hearing more from this and what are the likely numbers? Do we have any sense?

DAVID CULVER, CNN CORRESPONDENT: Well, we have the anecdotal experience that we've had in talking with folks not only here in Beijing, but in

Shanghai, and also in Wuhan, where they went through that 76-day lockdown.

So, let me first frame Julia, for you what the Premier has come out to say, and that is that they're not setting that target GDP for the year. He is

citing the uncertainty, not only here in China, but with the global economic market.

So, going forward, though, they do have this rather aggressive fiscal policy and the stimulus idea of $500 billion going into effect. The

question will be, is it coming in a little bit too late? And I say that because of some of the small businesses that we spoke with, particularly

within places like Wuhan, that have said not only are they not able to open because of certain restrictions, but now financially, they feel like they

will never open again.

So, this $500 billion, the way that's going to be split up, we know $140 billion, according to the Premier will go into some tax cuts, some rent

reductions, and then they're going to issue some special Treasury bonds and those bonds will be fueling really some of the infrastructure projects that

they've been pushing forward with, and they think this will help towards that nine-million person increase in jobs that they're hoping to see as

well.

The infrastructure projects would be 5G. They would be railways, airports, and things that they think ultimately will bring China to moderate

prosperity. That's something that they have been pushing through the start of this National People's Congress, which is essentially the rubber stamp

Parliament here.

But going back to what the real concern is, and that is unemployment and questioning those numbers in particular, Julia, I can tell you just in

talking with folks, there had been real issues with not only businesses and small businesses in particular staying open, but then you have folks who

have told me that childcare has been an issue because schools, for example, here in Beijing are not back in session. In other places, it's starting to

start classes once more.

But for parents, many of them have actually had to quit jobs if there are a two-parent working household. One of them has had to say essentially, they

can no longer go to work because they have to be home with their children.

Now, in some cases they've had grandparents to help out with that. But that kind of shows you some of just the person to person issues that people are

explaining as to why they're being affected by this economically.

[09:15:10]

CHATTERLEY: Yeah, it's just one of many issues they're facing, to your point, and I agree. Perhaps, too little in terms of stimulus, too late. We

have to watch it.

David Culver, thank you so much for that.

The U.S. Treasury Secretary says there's a strong likelihood another Stimulus Bill is needed but says Congress should step back and allow aid

already in the system to flow through to the economy.

Joe Johns joins us now from Washington. Joe, there is a fair argument there to some degree, less than half of the cash that's already been agreed is

believed to be in the system.

But are the Democrats and the Republicans coming closer to agreeing what more is required?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Yes, and there is still going to have to be a lot more talk about that, the President made that

pretty clear. He was asked just yesterday at the GM plant what he thought should be in another Stimulus Bill.

He was very vague. He pretty much avoided the question. Nonetheless, we know a couple of things. We know, even though they're trying to restart the

economy here in the United States, the fact of the matter is, the unemployment picture is expected to repair much more slowly than some other

parts, some other sectors, some other parts of the economy.

And, for example, the Congressional Budget Office suggests that we won't reach eight percent unemployment until the fourth quarter of 2020. So,

that's a big consideration.

And what do you do about that? Well, number one, there are many people on Capitol Hill, mostly Republicans who say they don't want to increase or

maintain the so-called supercharged unemployment compensation that has been provided thus far because it works as a disincentive for people to go back

to their jobs.

However, they work it out, one thing is clear. There are some political considerations for everyone involved. And the President of the United

States and his people over here are certainly worried about what the employment picture will be when we reach early November when the President

has to face the voters. Big consideration there as well.

We know a couple of other things. The White House and Republicans don't like the idea of allowing companies to be sued anytime anybody wants to as

a result of a customer or a business person or whatever getting coronavirus. So, they're talking about liability limitations.

And the President of course, has said he'd like to see a payroll tax cut -- Julia.

CHATTERLEY: Yes, which no one else agrees with and I think Senate Majority Leader Mitch McConnell called them lawyer vultures, I believe and yes, you

have to incentivize people to get back into the workforce, but you have to keep them safe, too.

Joe Johns, thank you so much for that update there.

All right, still to come here on FIRST MOVE, Asia stocks slide, Europe trying to pare earlier losses as China tightens its grip on Hong Kong.

We'll be joined by the President of the city's American Chamber of Commerce.

And Facebook allows staff to work permanently from home. There may be a price to pay. Stay with us. That's coming up.

(COMMERCIAL BREAK)

[09:21:13]

CHATTERLEY: Welcome back to FIRST MOVE live from New York where U.S. stocks are now on track for a modestly higher open.

We have been under pressure earlier today amid fresh concerns that the worsening U.S.-China relationship could hurt the global economy during

already deeply challenged times.

Take a look what's going on for shares of Chinese internet giant, Alibaba, lower premarket. It has reported earnings and revenues that beat

expectations. Alibaba also, we're seeing a steady recovery in consumer demand since March which is good news.

But I have to say, the shares have been under pressure since mid-week. Investors worried about a newly passed Bill in the U.S. Senate that could

force some publicly traded Chinese firms to delist from Wall Street if they can't prove their independence from Beijing.

Adding further strain to the U.S.-China relationship, of course, everything we've been discussing with Hong Kong. Beijing set to impose a sweeping new

security law there.

President Donald Trump warned of a U.S. response if that were to happen. Joining us now is Tara Joseph, President of the American Chamber of

Commerce in Hong Kong. Tara, always great to talk to you.

I mentioned earlier on the show the pressure immediately on Hong Kong shares with investors nervous here. You share their alarm about where this

could lead.

TARA JOSEPH, PRESIDENT, AMERICAN CHAMBER OF COMMERCE-HONG KONG: Hi, Julia. And yes, it has been a very rough day for business and for everyone in Hong

Kong with Beijing skirting Hong Kong to go ahead and talk about passing a Security Law very swiftly with very few details of how that's going to

work.

Now, we're bracing for the second hit, which as you mentioned, is the United States in what could be a very swift and strong reaction.

So, right now, Hong Kong is caught right in the middle of the U.S.-China trade friction and that could be very, very difficult for business.

CHATTERLEY: Tara, you mentioned on a personal level and we were talking about this with Ivan, people already reacting, like this law has passed and

that there's going to be far greater influence from China going forward.

What does that mean for people wanting to come to Hong Kong for businesses that operate there? You have to effectively assume you're part of the

Mainland.

JOSEPH: Well, it could start to feel like the absolute Mainland-ization of Hong Kong. But it's early to actually feel that every day yet.

Right now, I could pick up my mobile phone and go on to Google or Facebook. There is now a creeping worry that we shouldn't take this for granted

anymore, that things could actually change. People are rushing out to buy VPNs today, for example.

As far as talent goes and the international community goes, we've already been seeing a slightly gloomy mood, worries about talent leaving Hong Kong.

So, if we see a really stringent reaction from the United States, a decertification of the special relationship between Hong Kong and the

United States, or in particular, a severe National Security Law, and we see those repercussions very quickly, this could start to see people worrying a

lot more, and it will put pressure on business, no question about it.

CHATTERLEY: It happens at an especially politically motivated moment in terms of reactions from the United States.

We've already had condemnation from Mike Pompeo, of course Secretary of State, Tara, do you worry that we may see an ending if that special

relationship? You've mentioned it twice now.

JOSEPH: Yes, I do worry about it. I think it's something that we need to watch for. But the question in my mind here and for the business community

is Hong Kong is a win-win. It is a win for Beijing. It needs access to the international capital markets. It likes having a financial services center,

and Hong Kong is a win for the United States and for companies here.

So, by seeing Hong Kong ruled over by the bus of geopolitical tensions, it is really not good for either side in terms of business in the long run.

[09:25:38]

JOSEPH: That said, we've reached a point where U.S.-China trade relations, and the geopolitical relations are reaching a point of potential decoupling

and that could have very stiff consequences.

CHATTERLEY: Tara, what's the downside for China at this moment? They're looking at the situation in Hong Kong. They're saying look, the Hong Kong

authorities seemingly not controlling the situation, time for us to act. What's the downside in your mind?

JOSEPH: There's a fair amount of downside. First of all, as a financial center, Hong Kong is very important for China. This is where you can change

your money into an international currency from the tightly controlled Yuan currency that China has.

This is where China has access to capital markets. It's also a place where China has a meeting point to the rest of the world and its reputation is

being closely watched by how it handles Hong Kong. And that will hurt its reputation, even if it's not tarnished enough already.

CHATTERLEY: Yes, you raise a great point. At a time of deep scrutiny over China's actions and behavior given what's going on in the coronavirus, this

is just an additional layer.

Tara Joseph, great to have you with us.

JOSEPH: That's right.

CHATTERLEY: Thank you so much for that.

JOSEPH: Thank you.

CHATTERLEY: The President of the American Chamber of Commerce in Hong Kong.

All right, we're counting down to the market open this morning. Stay with us. We're back after this.

(COMMERCIAL BREAK)

[09:30:11]

ANNOUNCER: This is CNN Breaking News.

CHATTERLEY: Welcome back to the show with the latest on our top story today, the plane crash in Pakistan.

More than a hundred people were on board a Pakistani International Airlines Flight PK 8303. It was a domestic flight on its way from Lahore to Karachi

when it crashed into a residential area near the airport.

The Aviation Ministry says the pilot reported technical issues shortly before the crash. CNN Sophia Saifi joins us now from Islamabad with more.

Sophia, great to have you on the show. Tell us more. What other details do we have?

SOPHIA SAIFI, CNN PRODUCER: Well, Julia, I believe the most important information and the most tragic information that we received just now from

a PIA spokesperson is that this flight was actually a special flight that had started after the lockdown to get people back to their hometowns for

the Eid Holidays, which began today.

Eid is a huge national holiday in Pakistan. It's the festival at the end of Ramadan. Pakistan had had a lockdown for about -- a strict lockdown -- for

about two months, and there were no domestic flights running. The only time that domestic flights actually restarted was just about a week ago.

So, we do know that this flight crashed into a residential area. We know that -- we don't know much information about the death toll, about

survivors. There is not much information regarding that.

We have been told by the military that there is an ongoing search and rescue operation within that residential area which, Julia, is actually

quite close to the airport.

It's a heavily packed urban area, full of high-rise buildings, close to the airport, full of people who are generally just staying in because of the

fear of COVID-19.

So, it's a situation that's still unfolding. We're still waiting to hear more about what's actually caused it, what kind of death toll there is, and

what lies ahead in terms of flights re-operating or continuing to operate within the country since, you know, they were already flying at a lower

capacity -- Julia.

CHATTERLEY: We're already looking at quite extensive damage to buildings there where it seems, we believe the plane came down.

Sophia, you mentioned that obviously, we've been in a period there of lockdown due to fears over the COVID virus. I am just looking at people now

trying to help those that are injured and some of them have covers over their mouths, some are wearing masks.

Many aren't at this stage. The recovery efforts here clearly complicated by the fact that this is another nation and a city fighting against COVID-19.

SAFIA: Yes, definitely. I mean Karachi, it is one of the most populated cities in the world, the most populated city in Pakistan. It's the most

affected city by COVID-19 that had the highest number of deaths.

The Medical Health Services in that city, the hospitals have already been stretched. We've been told by the Ministry of Health that all hospitals are

at high alert. There's a state of emergency.

But you must understand that hospitals have already been at a state of high alert because of the coronavirus situation in the country.

So you know, you have a situation where health services are already stretched and you know, there might be cases because this crash has

happened in a residential area where we will see casualties which are not just from the plane itself, but from people who were living in those

buildings where the plane crashed.

CHATTERLEY: Yes, it's devastating. Ninety-nine passengers, eight crew members on board, a plane crash there as you can see in Karachi.

Sophia, great to have you with us. Thank you so much. And we will continue to keep our viewers updated on this. Sophia Saifi in Islamabad. Stay safe.

Of course, as I mentioned, we'll have more on this breaking news story throughout the day here on CNN. For now, an update once again on what we're

seeing.

U.S. stock markets are open. We're slipping slightly, as you can see in early trading. This, ahead of the long Memorial Day weekend.

Once again, all eyes on the Chinese parliament, too. That meeting in Beijing where officials have announced fresh stimulus, but they're also

pushing through a tough new Security Bill that would further limit Hong Kong's freedoms.

An immediate response here in the United States where the Senate will consider pushing officials who carry out -- punishing officials who carry

out the crackdown.

All of this of course, through a refracted fear, economic rivalries between the U.S. and China.

The co-chair of Bridgewater Associates, Ray Dalio said this week that China's power is, quote, "rapidly rising," and the United States is quote,

in "relative decline."

Longtime Chinese critic Kyle Bass, the Founder and Chief Investment Officer at Hayman Capital Management joins us now.

Kyle, always great to have you on the show. You've long been warning and saying that you're concerned about the situation in Hong Kong. Do you

expect action from the United States? Perhaps, a removal of the special relationship that Hong Kong now shares?

[09:35:26]

KYLE BASS, FOUNDER AND CHIEF INVESTMENT OFFICER, HAYMAN CAPITAL MANAGEMENT: Yes. Great to be here, Julia.

I don't -- I can't imagine how once Beijing extrajudicially implements their own laws on top of the basic laws in Hong Kong, it basically strips

the autonomy away from the Hong Kong region that Beijing agreed to when they signed the Sino-British Joint Declaration of 1984. That's a U.N. file

document that Beijing is now walking away from.

And you know, they're walking away about 27 years early. They promised to leave Hong Kong sufficiently autonomous until 2047. There's a 50-year deal

that they're abrogating about 27 years early.

I'd like to go back to a comment you just made, Julia, which I find to be really interesting. You know, I think the world kind of takes, and

especially the financial world takes Ray Dalio's comments at face value. And nobody asked him who his largest investor is.

You know, one of Ray Dalio's largest investors from what the market knows is China's government. And so for Ray Dalio to be the official spokesperson

in the U.S. of let's say, the macroeconomic community, when China is one of his biggest investors, claiming that China is a rising power and that the

U.S. is just in a secular decline.

I think the journalists that interview Ray Dalio should ask him how much money China has invested in his funds.

CHATTERLEY: You think he has a vested interest in suggesting that the Chinese will rise relative to the United States?

BASS: Yes, the way that the Chinese work is they enrich a few people and those people become evangelical about the positive attributes of China.

Look, it's kind of well-known in market circles. I don't know this for an absolute fact, because I'm not an investor in Bridgewater nor am I a close

friend of Ray's, but it's known that $5 billion to $6 billion of China's government money is invested in the Bridgewater funds.

CHATTERLEY: And Ray Dalio, of course isn't here to defend himself either. But you make a very valid point that does there need to be greater scrutiny

of investment in China? Chinese companies coming into the United States and trying to raise money, listed companies. It's a move that the U.S. Senate

is looking at.

I know you're in favor of this. Should this be enacted into law?

BASS: Yes, and Julia, I want to be clear, I'm in favor of the playing field being leveled and U.S. investors being protected. And so this isn't an

ejection of specific Chinese companies. What this is, is we need to raise our audit standards and basically have any international company that wants

to raise money in the U.S., either through stocks or bonds, they should adhere to U.S. law.

Right now, that's not the case and China is the worst offender. I call it 90 percent of the offenses are more Chinese companies. So, we should allow

them to either raise their standards to meeting U.S. law or they should be -- they shouldn't be allowed to raise money here.

I mean, this is the job of the Securities and Exchange Commission in the U.S., to protect U.S. investors.

CHATTERLEY: Level playing field makes sense. Level playing field in terms of access to Chinese resources and investment in that country is also a

fair argument to make, but it simply doesn't happen.

How do you want to see this relationship evolve? And how do you think it does as we head towards a presidential election in the United States?

Because the rhetoric right now and even the actions that are flying thick and fast between the U.S. and China.

BASS: Yes, I mean, Julia it's -- they're fundamentally incompatible, right? We are the land of freedom and liberty and democracy and call it fair

trade, and they run a heavy-handed communist dictatorship, where they repress their people for the benefit of the state.

I mean, those two ideologies are fundamentally incompatible. And Martin Lee, one of the pro-democracy protesters -- or not even protesters -- pro-

democracy leaders of Hong Kong. He is 81 years old, was just arrested at his house a couple of weeks ago.

He is the author of the basic law in Hong Kong and in 1989, he predicted that one day this relationship between, let's say, China and Hong Kong,

this one country two systems ideology, which now we're seeing is changing to one country one system.

He predicted long ago that this would fail because those ideologies are just conflicting with one another, and now we're seeing the crucible of

those two world forces butting heads in the region of Hong Kong.

And I think that that doesn't bode well for Taiwan and it doesn't bode well for the relationship between these communist dictatorships and the rest of

the Western world.

I think this relationship will continue to devolve. And I really don't think whether under President Trump or President Biden, it's going to

change. I think it's only going to devolve going forward.

[09:40:38]

CHATTERLEY: Hong Kong is ground zero, I guess, for the ideological clash that you're talking about here between a communist system and the

foundations of democracy. Where does that leave Hong Kong?

I know you're incredibly bearish anyway and your fund is positioned that way. But what reaction do you want to see from the international community?

Because it's not just about the United States. There are many countries around the world at this moment that are very frustrated with China in

their handling of COVID-19. What should the response be?

BASS: Well, I have to unpack your questions. There were many questions there. But number one --

CHATTERLEY: I apologize.

BASS: You call us bearish, I call us realistic about the situation between China Hong Kong and in the West. So, as we all know, Hong Kong, basically

has a couple of agreements signed. The definitive agreement for the governance of the region as the Sino-British Joint Declaration of 1984.

And if you think back, Julia, I'd like to draw a few historical parallels.

When Deng Xiaoping was negotiating with Margaret Thatcher trying to get Hong Kong in the Kowloon area back under Chinese rule, this was in the

early 1980s. That's when the Hong Kong currency collapsed, 50 percent versus the dollar and the pound.

When rumor got out that China wanted to take Hong Kong back after Hong Kong had enjoyed English law and British rule for over a century, the investors

in the region started to panic.

And that's what forced that action, those discussions forced the Hong Kong monetary authorities to peg their currency to the dollar. That was 36 years

ago.

When they handed Hong Kong back to the Chinese in 1997, you'll remember, July 1st, 1997 was the handover; July 2nd 1997 was when the Thai baht

devalued and the Asian currency crisis happened. It was money leaving Southeast Asia, again, because China was becoming more -- they were taking

ownership of Hong Kong.

Here we are today with China acting belligerently and abrogating contracts that they've signed like their government does and here we are -- you're

going to see a huge a slide of capital out of Southeast Asia given China's actions in the last few days.

CHATTERLEY: And on top of an already damaged economy as a result of COVID- 19 and the protests before. Triple challenge, I think. Kyle, I have to wrap you up there, but we will get you back. I promise. It's always great to

chat to you.

Thank you so much. Kyle Bass Founder and Chief Investment Officer at Hayman Capital Management. Great to have you with us.

All right, we're going to take a break.

Coming up, the CEO of Virgin Galactic joining us as space tourism takes another giant leap forward. Stay with us.

(COMMERCIAL BREAK)

[09:46:42]

CHATTERLEY: Welcome to come back to FIRST MOVE and to Brazil now where President Jair Bolsonaro has downplayed the coronavirus as a little flu.

But inside hospitals, healthcare workers are struggling with an overwhelming number of patients and watching their colleagues fall victim

to the virus themselves.

CNN's Nick Paton Walsh takes us behind the hospital doors to show us the frontlines of what one doctor calls the worst thing we've ever faced. Stay

with us.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR (voice over): Sao Paulo, the biggest city and hottest spot for the coronavirus in Brazil, but

deathly quiet.

Outside Emilio Ribas Hospital, no new patients arriving on ambulances is not a good sign. In fact, it spells the worst because this huge ICU has run

out of beds.

PATON WALSH (on camera): What's startling here is that the peak is possibly well over a week away from hitting Brazil, and already this enormous ICU is

full.

And in between the beds, there is a growing sense of anxiety. Fear really, about what lies ahead.

PATON WALSH (voice-over): Doctors here have heard President Jair Bolsonaro dismiss the disease as a little flu. But presidential platitudes haven't

protected them.

One of their nurses died two days ago. Inside this room is one of the team's doctors on a ventilator and another has tested positive this day.

(BEGIN VIDEO CLIP)

JACQUES SZTAJNBOK, EMILIO RIBAS INFECTIOUS DISEASES INSTITUTE: Never before it touches us like this time because we have never lost a colleague in this

intensive care before.

Yes, definitely it's not a flu. It's the worst thing we have ever faced in our professional lives.

WALSH (on camera): Are you worried for your life here?

SZTAJNBOK: Yes. Yes.

(END VIDEO CLIP)

WALSH (voice-over): It's a virus that stifles and silences. But suddenly here, there is commotion. One patient, a woman in her 40s, has had

cardiorespiratory failure. The doctor's heavy pulse is the only thing keeping her alive, but after about 40 minutes, it's clear she can't

survive.

The body is cleaned, the tubes that kept her life disconnected and she is wheeled out.

The space will be needed. It all happened so fast but leaves a long scar.

A scene so distant from presidential rallies, masks now common much of the time. But wealth put before health.

"We have to be brave," he says, to face this virus. "Are people dying? Yes, they are, and I'll regret that, but many more are going to die if the

economy continues to be destroyed because of these lockdown measures."

The holes here in the hills above Sao Paulo are not dug ready for a recession, though, endless fresh graves for the dead who also seem to never

stop arriving.

PATON WALSH (on camera): In Brazil, the numbers are already staggering and it's clear, it's not the entire picture because testing simply isn't as

widespread as they would like.

But everywhere you go, you see the people understand this is just the beginning.

Nick Paton Walsh, CNN, Sao Paulo, Brazil.

(END VIDEOTAPE)

CHATTERLEY: We are after this. Stay with us.

(COMMERCIAL BREAK)

[09:52:15]

CHATTERLEY: Welcome back to the show. We heard from AstraZeneca's CEO yesterday about the billion dollar plus investment from the U.S. government

into vaccine research.

Well, I can tell you that the Oxford University Research is moving on to the next phase of human trials. Our Clarissa Ward has a look at the

details.

(BEGIN VIDEOTAPE)

CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT (voice over): It is the oldest university in the English- speaking world. But Oxford University

may soon be better known for taking a big step forward in the global race to develop a vaccine against COVID-19.

Graduate student, Dan McAteer is one of more than a thousand volunteers who signed up to be subjects in the first round of human trials.

All participants had to be between 18 and 55, and in excellent health. Half were given the experimental COVID-19 vaccine, and half were given a control

vaccine.

(BEGIN VIDEO CLIP)

DAN MCATEER, OXFORD VACCINE TRIAL VOLUNTEER: I, like all of, us felt very much impotent and powerless in the middle of a pandemic. So, I thought, all

right, this sounds like maybe I can contribute in some way.

(END VIDEO CLIP)

WARD (voice over): Mother of two, Lydia Guthrie had her inoculation three weeks ago.

(BEGIN VIDEO CLIP)

LYDIA GUTHRIE, OXFORD VACCINE TRIAL VOLUNTEER: I did have a few moments beforehand of thinking, whoa, you know, I might be injected with this

experimental vaccine. That sounds like something out of a science fiction film. But we're all having to make decisions about risk.

(END VIDEO CLIP)

WARD (voice over): Guthrie says she experienced some side effects similar to a mild flu. Next week, she will go back for her first blood test.

(BEGIN VIDEO CLIP)

GUTHRIE: We have an e-diary system, so every day I get an e-mail as a prompt to log in and complete a short questionnaire about my health and

well-being. I also complete a questionnaire about my daily activities.

(END VIDEO CLIP)

WARD (voice over): The vaccine's developers have made some bold predictions, saying it could be mass produced as early as September.

But some experts have cast doubt on that optimism, pointing to test results on monkeys, while none of the vaccinated animals suffered from pneumonia

after being injected with COVID-19, they did still contract the virus.

Jenner Institute Director, Professor Adrian Hill says the data has been misconstrued.

(BEGIN VIDEO CLIP)

ADRIAN HILL, DIRECTOR, JENNER INSTITUTE: We are very confident that the result in those monkeys is as good as we could have hope for.

WARD (on camera): Is the goal of this vaccine to create immunity, or is it simply to prevent the worst symptoms?

HILL: So, I think it will likely be one of the other, it doesn't work at all or it works against infection and disease. That's certainly how

vaccines work.

(END VIDEO CLIP)

WARD (voice over): McAteer concedes he will be disappointed if the vaccine doesn't work.

[09:55:09]

(BEGIN VIDEO CLIP)

MCATEER: If you are part of something and you've given it your time and it's been a subject of a bit of anxiety, of course, because there are risks

attached, of course you want your vaccine to succeed.

But fundamentally, we just need a vaccine to succeed or even better multiple vaccines to succeed.

(END VIDEO CLIP)

WARD: In the end, the real race is against the virus and time.

(END VIDEOTAPE)

CHATTERLEY: Some incredible science there. Now, before we go, I want to show you a fitting farewell for a nurse who beat coronavirus here in New

York City.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Ladies and gentlemen, it is time for Nurse Rose to go home.

[CHEERING AND APPLAUSE]

(END VIDEO CLIP)

CHATTERLEY: That was the moment, Rose Japitana who is wearing white left the Jacobi Medical Center in the Bronx to cheers from other medical workers

and well wishes.

A big round of applause from all of us here at FIRST MOVE for our medical heroes around the world, rightly rewarded and the fact is, the battle is

not over.

That's it for the show. I'm Julia Chatterley. Stay safe, stay well and have a good weekend.

(COMMERCIAL BREAK)

[10:00:00]

END