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First Move with Julia Chatterley
U.S. Is Calling New Hong Kong Law A Disaster And A Fundamental Reappraisal Now Underway Of Relations Between The United States And Hong Kong; Violent Protests In The United States In Minneapolis Over The Death Of A Man Who Was Being Restrained By The Police; Unemployment In The United States Continues To Rise, Now Over 40 Million. Aired 9-10a ET
Aired May 28, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
RICHARD QUEST, CNN BUSINESS ANCHOR: ... a new Hong Kong law, China has approved the crackdown. The U.S. is calling it a disaster and a fundamental
reappraisal now underway of relations between the United States and Hong Kong.
Violent protests in the United States in Minneapolis over the death of a man who was being restrained by the police. We'll have all the details on
that for you.
And more lay-offs. Unemployment in the United States continues to rise. It is now over 40 million. We have the latest jobless numbers and Christine
Romans will help us understand what they mean.
It is Thursday and this is FIRST MOVE.
A very warm welcome to you to FIRST MOVE. I am Richard Quest. Julia is off this week. She will be back at the helm next week. So, the number of people
who have died from coronavirus has now reached more than 100,000 and that is taking its toll on the markets as well in the business world as people
look at the reopening.
2.1 million more Americans filed jobless claims last week. It takes the total number to more than 40 million since the lockdowns began.
Now, 2.1 million is considerably less than we saw at the height, but that is cruel and cold comfort. It is encouraging, but we mustn't overstate it.
The futures are showing a mixed open. There are gains for the blue chips. Now bearing in mind, we are over 25,000. The blue chips have been on a tear
for the last few days. One would be perfectly entitled to say that they will take a breather, but tech remains under pressure.
So you've got the blue chips up in the broader up and tech is down and the reason for that is Donald Trump is threatening social media and there will
be an executive order, we'll discuss in just a moment. Twitter is up four percent premarket.
Europe was higher. DAX is up for the fifth straight month. The idea is that the recovery plan boosts European economies. They buy more German goods.
Germany improves. You get the way the picture runs.
Look at Asia. Japan was up two percent. The reopening is moving forward there. However, Hong Kong and the Hang Seng, well, many are surprised it is
holding on as much as it is frankly down just three-quarters of one percent bearing in mind that as we get to our drivers, it is Hong Kong and china
that is right at the top.
China has pushed forward with the National Security Law that has provoked such anger, angst, and unrest in Hong Kong. A new wave has taken place.
The U.S. Secretary of State, Mike Pompeo has dismissed and denounced the move calling it disastrous. David Culver is our correspondent in China. He
joins me from Beijing.
We'll get to the interpretation in a moment, David. But, first, the actual passage of the law. Has the Chinese Congress passed this law and is it now
enforced?
DAVID CULVER, CNN CORRESPONDENT: All right. So, they have passed it, so as to begin the legislative process, Richard. It is not surprising when they
propose something to rubber stamp legislature, so of course they are going to go through with passing it and it was overwhelmingly done so with some
3,000 delegates.
But what is happening now is the standing committee that over the next two months or so will come out with some of the specifics as to what this will
mean for the folks not only in Hong Kong, but ultimately those who do business with Hong Kong, as you mentioned the U.S. being a huge part of
that.
QUEST: Related to this though is now, of course is what the U.S. is going to do about it, and the comments from Mike Pompeo saying that it is
disastrous, but the actions likely to be taken, to say that the U.S. no longer regards Hong Kong as autonomous.
What is the significance of that and will it worry China?
CULVER: Well, yes, that's crucial. I mean, the autonomy that Hong Kong has enjoyed is -- if that is threatened then, going along with it would be the
special trading status that it has, essentially keeping tariffs at little to nothing certainly for American exports in particular.
The other part of that could mean that the U.S. would move forward with sanctions against China and, perhaps, some of the tariffs that were solved
over Phase 1 back in mid-January will make a return.
They're even talking about forcing certain Chinese officials to have to undergo visas. I mean, all of this is because they fear that the autonomy
that Hong Kong currently has is going to be essentially eliminated altogether and China's side of this is saying, no, this is about
safeguarding national security.
I want to show you on your screen if you see this, the breakdown as Beijing has portrayed this because this is how they're putting it out and the
narrative is being constructed here in Mainland, and that is maintaining and improving one country, two systems. They say this is preserving the
rule of law, this is opposing foreign interference.
[09:05:10]
CULVER: Clearly, they are pointing at the U.S. in particular and that it is protecting Hong Kong residents' legitimate rights.
The concern though is that this autonomy that they have enjoyed will be wiped out altogether and that, it perhaps could become more like folks here
in Mainland are experiencing and particularly with freedom of speech and press that is something that is also of concern.
And as I look over my shoulder, I mean, some of this has been censored out as you and I have been talking.
QUEST: David Culver, that last point is extremely interesting, and serious and we'll talk more about it as we do, every time you say something, every
time we cover something here on CNN that the Chinese government doesn't like, they simply turn off the switch.
David Culver in Beijing. Sir, thank you. It will be interesting to see if and when they decide to turn it back on again.
They might do when they hear the numbers from the United States, economic numbers from the U.S., 2.1 million more Americans have now filed for
unemployment.
Christine Romans is with me, our chief business correspondent. So, it is cruel and cold comfort that the number is going down. Because when you look
at the 40 million, but Christine, I am more interested to some extent in this number of how many of those people regard themselves as long-term
unemployed or expect to go back to their place of work.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: You know, here is the thing. How temporary is this and how do people feel? What kind
of confidence do they have that they're going to go back and get a job? Something that augments that is the $600.00 a week extra the taxpayers are
giving them, but many economists hope will relieve the damage that numbers like these are doing to consumer confidence and employee confidence.
But look, 2.1 million. We can look and try to find little statistics here and there that make it seem a little bit better. Continuing claims for
example came down by a few million and I was happy about that for a second, and then I just had to think, wait a minute, 40 million people have lost
their jobs in ten weeks, either furloughed, temporarily off the job, or permanent lay-offs.
And when you think about who was working, Richard, at the beginning of March, think about the American labor market at the beginning of March, a
quarter of those people are not working today.
So that's what is really kind of the context, I think here, overall. You're right to point out that these numbers have been declining from what have
been just epic multi, multimillion levels.
But before this, we've never even seen a million claims. You know, not even in those days after World War II when Japan surrendered and then all of a
sudden, the big industrial machine of the United States stopped.
So this is just such a unique, no playbook period. It is hard to draw conclusions about where the turn-around comes when you've got just such a
big volume of numbers, I think.
QUEST: Exactly, and that's the problem, Christine. That is exactly the problem. Any form of prognostication of what comes next is at best, guess
work, and at worst just -- I think it's going to be one way or the other.
ROMANS: I think it is so interesting because when you talk to corporate executives, there have been a couple of really interesting surveys of
corporate executives who see a quick recovery.
I mean, Jamie Dimon from JPMorgan said there is fairly good odds that you are going to see a brisk recovery starting at the end of this year.
The stock market clearly looking ahead to a recovery in 2021. There was a survey that our Matt Egan wrote about today about corporate executives who
really think there is going to be a V-shaped strong recovery.
So then, you talk to the Central Bankers and they say, you know, markets don't understand this virus. We haven't gone through this before in the
modern economy. There is an awful lot of risk still out there.
So we'll see if people start to get hired back and in what capacity. I hope that that turn comes, but for right now, we are still in the thick of the
kind of lay-offs we've never seen before.
QUEST: Christine, thank you. Christine Romans, our chief business correspondent. I appreciate it. Thank you.
Donald Trump says he will issue an Executive Order concerning Twitter and social media. Donie O'Sullivan is our correspondent covering that for us
this morning. Donie, we've got an idea what this might be. What is it?
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: Yes, that's right, Richard. Our colleague Brian Fung here at CNN has seen a draft of the Executive Order
and Trump is really coming after a law called the Communications Decency Act that was signed in 1996 specifically Section 230 of that, which is --
the Section was signed in 1996, I should say, which basically protects the social media companies from lawsuits, from really having them to take
responsibility for what is on their platform.
So, you know, where the likes of Facebook and Twitter really responsible for what their users are posting, their billions of users are posting, it
of course could be a lot more expensive to run that platform because they'd have to have a lot more humans moderating it.
So, this could actually, you know, cause a great cost to these companies.
[09:10:13]
O'SULLIVAN: Now, when you get into the details like, you know, some Trump Executive Orders in the past, it is difficult to see if this, you know,
will actually make it across the finish line into action.
Congress would need to be involved. There are various different agencies, the F.C.C. here in the U.S., so the details, once you get into the details,
it starts to cloud up a bit, but this is of course Trump trying to, I guess, get back at the companies.
He and many conservatives here in the U.S. believe that Silicon Valley has an anticonservative bias and one other thing I think that was interesting
in the draft memo, the draft Executive Order that CNN obtained, the Executive Order also faults Google for helping the Chinese government
surveil its citizens, Twitter for spreading Chinese propaganda, and Facebook for profiting from Chinese advertising.
So, you could see where the Trump administration's mind is at with all those mentions of China as well.
QUEST: All right, but this section we're talking about, section 230, while you were talking, I just caught up with this, it is called, "The 26 Words
That Created The Internet."
It is no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another
information content provider.
In other words, they are not liable for what somebody else says. So my guess is that the plan is to somehow negate that section.
O'SULLIVAN: Yes. I mean, you think about what Trump is trying to achieve here and what his allies are complaining about Silicon Valley. They are
saying that -- they are claiming that Silicon Valley, Facebook, and Twitter censors too much.
But if you make these platforms liable for anything that is posted on their services, then they are probably actually going to stop moderating and as
Trump would call it, censoring even more content.
So, it is difficult to see if -- understand how this actually -- this Executive Order might achieve the President's objectives here, but I mean,
I really think what we are getting into here is a debate that is past due about freedom of speech on the internet and how these massive platforms are
policing their services.
QUEST: Thank you. Donie O'Sullivan, thank you. Now, one other story making news around the world and we need to bring this to your attention this
morning. There's been a night of unrest in Minneapolis in the U.S. Midwest as protesters are clashing with police for a successive night.
If you look at the pictures, you can get an idea of the situation. The overnight unrest followed of course the police activity. Demonstrations
were in response to the death of George Floyd, an African-American who died after police officers kneeled on his neck on Monday.
CNN's Omar Jimenez has this report. It contains upsetting and graphic video of the arrest.
(BEGIN VIDEOTAPE)
OMAR JIMENEZ, CNN NATIONAL CORRESPONDENT (voice over): For a second night in a row --
(BEGIN VIDEO CLIP)
JOHN ELDER, MINNEAPOLIS POLICE SPOKESMAN: Tonight was a different night of protesting than it was just the night before.
(END VIDEO CLIP)
JIMENEZ (voice over): Minnesotans take to the streets over the death of one of their own, George Floyd.
The protests turning dangerous overnight. Fires burning on the streets. Local firefighters rushed to extinguish this billowing fire at an Auto
Zone.
Flashbangs and fireworks rang out on the streets well into the night. Some taking advantage of the unrest, looting a local Target and clashing in the
streets with police.
Emblematic of a pain felt in this community and beyond over how, in just a matter of minutes, the 46- year-old father of two went from pleading for
help --
(BEGIN VIDEO CLIP)
GEORGE FLOYD, KILLED IN POLICE CUSTODY: I can't breathe, officer.
(END VIDEO CLIP)
JIMENEZ: -- to what eventually became an eternal silence.
(BEGIN VIDEO CLIP)
DONALD WILLIAMS, WITNESSED GEORGE FLOYD'S ARREST: I'm going to hear my man say this, I can't breathe. I want my mama. And I'm coming to find out that
this man who died two years to the day that his mom died. I'm a mama's boy, bro. It's like that (bleep) just hurts me deep. He's telling his side, bro.
And like, something needs to be done, or something needs to be done.
(END VIDEO CLIP)
JIMENEZ (voice over): Williams says none of the officers responded to his pleas to let up at the scene.
The mayor of Minneapolis is now calling for charges to be filed.
(BEGIN VIDEO CLIP)
MAYOR JACOB FREY (D), MINNEAPOLIS: I've been asking myself that core, underlying question: why is the officer that killed George Floyd not in
jail right now? And I can't answer that question.
(END VIDEO CLIP)
JIMENEZ (voice over): Newly-released records from the Minneapolis Fire Department show when medics got to the scene, they were working on a,
quote, "unresponsive, pulseless male." Floyd was declared dead later on at a nearby hospital.
[09:15:16]
JIMENEZ (voice over): The circumstances that led to the encounter is among what investigators are trying to understand, including at the F.B.I. and
the Minnesota Bureau of Criminal Apprehension.
All of it circling the question of whether the four officers involved will face more than just being fired. Criminal charges. That includes Officer
Derek Chauvin, the man seen on video restraining Floyd with his knee, according to his attorney.
The Police Officers Federation of Minneapolis says the officers are cooperating with the investigation.
The Floyd family wants murder charges to be filed.
(BEGIN VIDEO CLIP)
RODNEY FLOYD, GEORGE FLOYD'S BROTHER: It hurts me that I am crying on TV. Another -- we are -- another black family going through this nonsense.
(END VIDEO CLIP)
JIMENEZ (voice over): And within the community, the pain persists.
(BEGIN VIDEO CLIP)
WILLIAMS: As a black community, as America, we are family, we've got to make a change, bro.
(END VIDEOTAPE)
QUEST: Omar is with me now from Minneapolis. Omar, looking at the pictures and listening to your report, where is this going? What happens next?
JIMENEZ: Well, right now, Richard, the protesters, the mayor, and the family are trying to see if these officers will now face criminal charges
as they have already been fired, which happened within 24 hours of this happening.
We see the tension playing out actions. This used to be an auto shop here in Minneapolis, Minnesota. And in just a matter of hours, it was lit on
fire. It was likely looted beforehand, and now, burned essentially to the ground.
We are standing essentially in what has been the flashpoint for protesters here. Location-wise, it is right across the street from the Minneapolis
Police Precinct here where, again, the protesters have been funneling.
Their central message is part of what I mentioned before. It centers around not only how George Floyd died as we have seen in that harrowing cellphone
video, but also now how his death is now being handled.
They want more to be done outside of just these firings. We are still waiting to see if the F.B.I. and the state investigators here recommend
charges to the County Attorney's Office and the U.S. Attorney's office for these officers, but only time will tell and tension remains -- Richard.
QUEST: Thank you. Omar there in Minneapolis, and if you want to really have an idea of the tension and the pain, listen to this interview, George
Floyd's brother speaking this morning to Alisyn Camerota on "New Day" and broke down as he recounted the pain that the family is going through.
(BEGIN VIDEO CLIP)
PHILONISE FLOYD, BROTHER OF GEORGE FLOYD: i'm never going to get my brother back. Never.
ALISYN CAMEROTA, CNN ANCHOR: I'm sorry.
P. FLOYD: We need justice. We need justice. Those four officers need to be arrested. They executed my brother in broad daylight. People had to film
that, people had to see that.
People pleaded for his life. Kids, I know, they were out there seeing this. Nobody wants to witness that. Nobody. Nobody should have to witness that.
And I understand and I see why a lot of people are doing a lot of different things around the world. I don't want them to lash out like that, but I
can't stop people right now because they have pain. They have the same pain that I feel.
I want everything to be peaceful. But I can't make everybody be peaceful. I can't -- it's hard.
(END VIDEO CLIP)
QUEST: The brother speaking this morning. Time for us to take a momentary break. When we come back, there are angry protests in Spain over Nissan's
decision to close a car plant there.
And the future of Hong Kong, a special report coming up.
(COMMERCIAL BREAK)
[09:21:58]
QUEST: Welcome to FIRST MOVE. The market opens in about eight minutes from now. It is going to be perhaps a split sort of opening with the broader and
the Dow, the blue chips going higher, but the NASDAQ is off just a tad.
There is a thousand and one reasons for that. We'll discuss them in a moment.
The U.S. Jobs Report of course is also one of them. That's another 2.1 million people in the United States who have filed for jobless benefit. It
takes the total to more than 40 million since the beginning of the crisis in mid-March.
Boeing has announced almost 7,000 lay-offs. The company said it was going to be doing this. EasyJet in the U.K. and Europe is going to cut 30 percent
of its work force. It hopes to start flying then in mid-June.
And American Airlines is cutting 30 percent including its management and support teams. All of the airlines basically saying they have no need for
those -- for the large number of staff that they've got for the flying they expect to do between now and the recovery in the year 2023.
In Spain, there have been protests after Nissan announced that it was to close its plant in Barcelona. It is part of deep cost cutting across the
board from Nissan.
As Kaori Enjoji reports, from Tokyo.
(BEGIN VIDEOTAPE)
KAORI ENJOJI, JOURNALIST: Nissan is shuttering its Barcelona plant and leaving the South Korea market as it retrenches into survival mode after
posting its biggest net loss in 20 years.
It is cutting capacity by 20 percent and shaving billions of dollars in costs and the architect of the turn-around plan, COO, Ashwani Gupta tells
me years of global expansion were a mistake.
(BEGIN VIDEO CLIP)
ASHWANI GUPTA, CHIEF OPERATING OFFICER, NISSAN: Number one, excessive fixed costs. Number two, the coronavirus -- sorry, COVID impact, and number
three, the financial impairment, and that is why we have these net losses.
(END VIDEO CLIP)
ENJOJI: Nissan's profits plunged after the arrest of Carlos Ghosn in 2018 and the entire industry was plunged into uncertainty after COVID-19.
The world's biggest car markets -- China, the U.S., and Japan, are all starting to slowly reopen, but Nissan says global demand in the near term
could be off by 20 percent.
(BEGIN VIDEO CLIP)
GUPTA: When let me look at the United States, we anticipate that in the United States, it will be 12 million, which is four million to five million
less than last year.
(END VIDEO CLIP)
ENJOJI: More job cuts and plant closures could be in the cards when its alliance partner, Renault announces its restructuring measures on Friday.
From Tokyo, I am Kaori Enjoji.
(END VIDEOTAPE)
QUEST: More than two million Americans filed for unemployment benefits in the last week taking the total to more than 40 million. That much we know
so far.
It is getting a significant number of those jobs back and how that actually happens, that is going to be the trick in all of this, and that means
getting Americans spending again.
According to a survey by the Consumer Brands Association, 47 percent are in favor of getting things moving again, reopening. Thirty eight percent want
to remain closed to protect public health, 68 percent say the U.S. will be back to normal in the next six months.
[09:25:10]
QUEST: Geoff Freeman is with me. The President and CEO of the Consumer Brands Association. I'm guessing, Geoff, that you -- good morning, first. I
am guessing that you don't believe that the U.S. will be back to normal per se by six months.
What do you think it will look like by the time we get to the turn of the year?
GEOFF FREEMAN, PRESIDENT AND CEO, CONSUMER BRANDS ASSOCIATION: Well, good morning, Richard. It is great to be with you.
I think our members realize that change is here for the long haul. We are looking at the remainder of this year well into 2021. I've got members
talking about disruption well into 2022. So, we do expect this to be the new normal.
We expect demand to be up quite significantly. We expect inventories, obviously, to struggle to get back to where they were. And we expect our
need as an industry to never be greater than it is right now, to deliver to the American consumer, provide them with the products they need, the
responsibility that we share as an industry is extraordinarily high right now and we expect that to continue.
QUEST: The interesting part about this, of course, is that the jobless numbers will have disproportionately come from your members. I mean, the
employees of your members -- retailing and the like have borne the brunt, which argues, do you believe you can reopen on a large scale safely?
Now, you've have real experience because you helped design the whole T.S.A. pre-check and the Travel Promotion Act and all of that sort of stuff.
So, you are well aware of how you can do things safely on a large, grand scale.
FREEMAN: We certainly did help the travel industry recover after 9/11 and we are going to need to see a similar recovery across our economy after
this situation.
I think first and foremost, it is important to point out that the consumer packaged goods industry has actually been adding jobs throughout this
crisis, whether in the retail environments, grocery stores; Amazon, now saying that it is going to take 125,000 of the jobs it added and make those
permanent.
Now, or whether it is in the manufacturing facilities within our membership. We've been adding jobs throughout this crisis, but, certainly,
you can't add the 40 million that have been lost. So, we do have a problem here.
We also have a problem that as we reopen, and on your airwaves I've seen it this morning, cases are ticking up in many of the southeastern states and
elsewhere around the country. That is going to be an issue. It is going to place greater stress on the manufacturing facilities as there is
competition for personal protective equipment, as there is more coronavirus spreading in the general public, and as the public wants to get out there
more and more.
We all know that. We all feel that tension ourselves.
Our industry is investing in the materials it needs in the facilities, whether it is the thermal testing, whether it is the PPE, whether it is the
contact tracing, all of those investments are going in.
There are enormous investments to ensure the safety of the people on the frontlines, but make no mistake, it is only going to get more difficult in
the months ahead.
QUEST: Okay. All of that given, what do you need? I mean, what does the industry need? More help from government? The government's already had PPP,
which has just about run out. It's got more unemployment benefits, it's the extra money, $600.00 or so per month.
A lot of the systems and loans and things that have been put in place are due to expire. What more do you want the administration to do?
FREEMAN: Our industry is not looking for financial assistance from the government. There are a lot of industries that may need that. Ours is not
one of those.
What we need from the Federal government is greater clarity. In this rush to reopen, in this rush to empower all of the states to do what states do,
we have right now a cacophony of different policies from state to state, locality to locality that will allow one manufacturing facility to stay
open is different than what will allow another one to stay open.
It is that lack of clarity, the lack of consistency, the lack of specific policy that has the greatest risk to keep these facilities open and keep
the store shelves stocked.
The more clarity we can get at a Federal level, the more likely we are to see states and the counties adopt those policies and create a more
consistent environment nationwide.
QUEST: All right. Good to see you, sir. Thank you. I appreciate it. We'll continue in just a moment. This is FIRST MOVE.
(COMMERCIAL BREAK)
[09:32:33]
QUEST: Welcome back to FIRST MOVE. I'm Richard Quest. Trading is now under way on Wall Street, three or four minutes into the trading day.
And well, some are up and some are down, obviously. But if you look at that, mixed. The open has reflected to some extent the premarket except we
haven't seen the gains yet that we were expecting to see in the premarket.
Another 2.1 million people filed unemployment jobless benefits in the United States. Continuing claims also fell last week. That's interesting.
The continuing claims fell of those who have been claiming for several weeks and that's because of course, they're going back to work as the
reopening gets under way.
Twitter is down four percent after the U.S. President has threatened to punish social media.
In Asia, Hong Kong's Hang Seng was definitely under pressure. China has now passed the new security measure that will apply in Hong Kong over the Hong
Kong administration, and the Hang Seng has fallen nearly five percent over the past week over these tensions.
The U.S. is threatening Hong Kong's special trading status after Mike Pompeo, the Secretary of State, described Beijing's actions as disastrous.
In the first quarter of this year, the U.S. exported more than $6 billion in goods to Hong Kong. Less than a billion dollars came in the other way
around.
The President, President Trump and Congress will decide what steps to take next. Sources say the President could take executive action as soon as
possible. Kristie Lu Stout has more from Hong KOng.
(BEGIN VIDEOTAPE)
KRISTIE LU STOUT, CNN CORRESPONDENT: Richard, the declaration from America's top diplomat is a reminder that as the incredible tension between
the U.S. and China rises, Hong Kong is caught right in the middle.
LU STOUT (voice over): No longer autonomous from China. That's how U.S. Secretary of State, Mike Pompeo has branded Hong Kong as Beijing moves to
tighten its grip on the territory.
This declaration is more than words. It opens the door to significant U.S. action, including the possibility of revoking Hong Kong's special trade
status.
LU STOUT (on camera): So, what would it mean for Hong Kong? It would mean that the United States would treat Hong Kong the same as China for trade
and other purposes. It would jeopardize billions of dollars' worth of trade between the U.S. and Hong Kong. It would also dissuade people from
investing here.
[09:35:03]
LU STOUT (voice over): It could also hurt China, the territory is a valuable East-West conduit for international trade and finance and the
world.
(BEGIN VIDEO CLIP)
ROBERT KOEPP, FOUNDER AND PRINCIPAL, GEOECONOMIX: The U.S. has enough power economically and politically to make its regulations toward Hong Kong
really impact the whole world, like a German company could have an operation in Hong Kong that helps funnel goods and services through that
city to the U.S., and suddenly that becomes impacted.
So, in that sense, it is a bigger ripple effect than simply two countries' relations.
(END VIDEO CLIP)
LU STOUT (voice over): Pro-democracy protest leaders in the city welcomed the move.
(BEGIN VIDEO CLIP)
JOSHUA WONG, HONG KONG PRO-DEMOCRACY ACTIVIST: According to the report by Secretary Pompeo, would just imply how the international committee and the
western countries realize how Hong Kong is the city without autonomy under the hardline rule of Beijing.
LU STOUT (on camera): Would revoking Hong Kong's trade status actually help in the battle for Hong Kong's autonomy?
KOEPP: The National Security law takes away the last vestige of guaranteed protections. So, to not do anything would be, you could argue, far worse.
And I think that is why the protest leaders support the move even though they must know that it is going to create quite a lot of pain for the
people of Hong Kong.
(END VIDEO CLIP)
LU STOUT (voice over): Meanwhile, U.S. businesses in China are taking a wait-and-see approach with the President of the American Chamber of
Commerce In Hong Kong saying, "American companies have already been evaluating the situation in Hong Kong due to the protests last year and
other indicators."
One thing is for certain, the declaration from Pompeo further strains the already fraught relationship between the U.S. and China, a relationship
fractured by the trade war, the pandemic, and now the fate and future of this special administrative region.
LU STOUT (on camera): As U.S.-China tensions rise, more riot police were deployed across Hong Kong today. Tension is rising as lawmakers here debate
a Bill that would make mocking China's National Anthem a crime and Washington turns up the heat on Beijing -- Richard.
(END VIDEOTAPE)
QUEST: Thank you. Kristie Lu Stout reporting. Barely a day has gone by without us reporting the market up or down on the vagaries and fortunes and
prospects of a coronavirus vaccine.
Small companies have seen profits hugely rise or at least prospective profits if they are the first ones to come out with a successful answer and
vaccine.
And that's where you've got some problems over what exactly do those profits mean? CNN's Anna Stewart reports.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN REPORTER (voice over): The race is on for a vaccine that can stop the spread of the coronavirus. Human trials are under way and a
number of companies are preparing to test their vaccines on a large scale. Success could lead to big profits.
(BEGIN VIDEO CLIP)
ENRICO BONADIO, INTELLECTUAL PROPERTY LAW LECTURER, UNIVERSITY OF LONDON: There is a huge demand, right? Where there is demand, there is a potential
profit, huge potential profits. Billions of people will be in need of these vaccines, can you imagine?
I mean, if just one company obtains a path covering the main vaccine for this, it would be like more than winning the lottery for such a company.
(END VIDEO CLIP)
STEWART (voice over): The world needs new medicines and vaccines and pharmaceutical firms say development is an expensive process, one that
requires intellectual property rights to offset the costs.
(BEGIN VIDEO CLIP)
DR. FRANCIS COLLINS, DIRECTOR, U.S. NATIONAL INSTITUTES OF HEALTH: Companies are going to be spending billions of dollars to produce these
vaccines and you can't expect that they should simply absorb that.
So, there has to be some reasonable compensation, but they should not be in a circumstance where this turns into a big boost to their bottom line.
(END VIDEO CLIP)
STEWART (voice over): But how much of a boost is too big?
(BEGIN VIDEO CLIP)
BONADIO: So I am not talking about normal times. Normal times of course, pharmaceutical companies should be free to litigate, to extract royalties,
but this is an unprecedented situation.
(END VIDEO CLIP)
STEWART: Governments around the world have already given billions of dollars to research bodies and companies working on vaccine development.
It is another argument against individual companies claiming a large vaccine profit and its dilemma, the Big Pharma firms are well aware of.
(BEGIN VIDEO CLIP)
PASCAL SORIOT, CEO, ASTRAZENECA: We are competing against the virus, not against each other. We, at AstraZeneca are doing this for no profit and I'm
sure other manufacturers will do the same.
We need several vaccines. So, we are not really competing against one another, we are really trying to bring several vaccines so we can vaccinate
as many people around the world as possible.
One vaccine will not be enough.
(END VIDEO CLIP)
STEWART (voice over): An industry experts say that while vaccine development may be costly, prevention is almost always less expensive than
a cure.
Anna Stewart, CNN, London.
(END VIDEOTAPE)
QUEST: In just a moment, we know that the SpaceX launch has now been postponed and hopefully, it will take place at the weekend, but the
attention on SpaceX has renewed the interest in Virgin Galactic. When? Simple question for the CEO. When will you carry passengers?
It will be my first question when he returns after the break.
(COMMERCIAL BREAK)
[09:43:32]
QUEST: Blame it on the weather. Pure and simple. Well, that was the reason why yesterday's SpaceX wasn't able to take off on their exciting venture
carrying the first two U.S. NASA astronauts into the Space Station, well, for the most part of nine years.
It was delayed until the weekend because of thunderstorms in the region. And well, the interesting thing is, every mission raises the prospect of
space tourism and just how close we are going to get to it.
George Whitesides is with me, the CEO of Virgin Galactic. He is with me now. George, I promised the first question, so those astronauts were
delayed. You've had some pandemic delays obviously in the business. When do you hope to send Richard Branson up on a rocket and passengers thereafter?
GEORGE WHITESIDES, CEO, VIRGIN GALACTIC: Well, hi, Richard. It is great to be with you. And you know, the great thing about our company is that we've
already sent, you know, our first passengers to space.
As you know, we flew to space in both 2018 and 2019 and minted five commercial astronauts with wings awarded by the F.A.A., and so you know,
we've already sent American astronauts to space from American soil and we're proud to do so.
That said, we are hugely excited about the SpaceX mission. I think it is a real milestone in American space policy. You know, I was Chief of Staff for
NASA when the commercial crew program really was kicked off in a substantive way.
And so for me, it is an exciting moment to see you know, 10 years later this mission actually go up.
[09:45:19]
WHITESIDES: You know, in terms of, Richard, obviously, you know, I always am a little cautious because I don't want to pressure the engineers to a
specific schedule, but we're making very good progress.
Obviously, we're trying to be very careful in the time of COVID. The team has done great by getting the operational procedures ready to continue
operation in our Test Flight Program during the time of COVID.
And as you know, we carried out a really important test flight at the beginning of May, which was our first space ship flight above sace for
America.
So we are making good progress and I think that there is going to be a lot of exciting things this year.
QUEST: So George, the commercialization of space. I was talking to the NASA administrator yesterday. For him in many ways, the whole SpaceX thing
is a culmination of a policy.
As you look forward and I understand you have got to get your first business under way, where do you see future opportunities for Galactic in
space above and beyond the sort of core mission of passengers into space?
WHITESIDES: Well, Richard, as you say, our number one priority is to get our amazing SpaceShip2 Unity into commercial service and then to start
additional SpaceShips into commercial service. We already have the next one well along in the manufacturing and the third one behind that.
So, you know, getting that fleet into commercial service is our number one priority. That said, we are entering into a very exciting period for
commercial exploration of space.
There is going to a lot of activity in low-earth orbit. There may even be opportunities in lunar orbit, even lunar surface operation. Now, I am not
making news, I am not saying that we are or not going to be involved in any of those particular things. But I think we are entering into a time when
you can imagine private space travelers spending time not just on suborbital journeys, but also in orbital space.
The other thing that is very exciting to us, as you know is high speed travel and we think we can evolve our vehicles into vehicles that could
take people between continents at a very rapid pace. That is something we're really excited about as well.
QUEST: Let's talk about that, because you received some funding to help investigate the possibility of faster travel. I don't see it. I'm sorry,
George. I don't see it -- or at least in my lifetime, but then, I don't see that we will ever get back to supersonic or hypersonic travel or hot old
travel, suborbital, through the environment, while the climate issues remain.
WHITESIDES: You know what, I think the climate issue is the key part and really that is the difference this time around, it is that, you know, we're
not just trying to do high speed travel, we are trying to do sustainable high speed travel.
And that is why we've assembled a really great team of engineers to work on this issue.
You know, the funny thing though is, Richard, 10 years ago when we started commercial crew for NASA people said the exact same thing. They said there
is no chance that commercial companies will be able to implement things and here we are, 10 years later with a program about to go.
So, I think, modern tools, modern materials, and a lot of great, hard work, will generate a high speed vehicle that is sustainable, and that is really
the core of whatever we're working on is that idea of long term sustainability.
QUEST: George, it is good to see you, as always. I'm watching. I am waiting for that date. I think you are probably right. I've always been
proved wrong and therefore likely, too, on this occasion as well. George, it is great to see you. Thank you. Keep well.
WHITESIDES: You, too. Bye.
QUEST: In just a moment, our next guest can transport you far further than George can, transport you into a completely different world. We'll be
talking next about Disney because the world of fantasy is much greater than anywhere you can go physically. After the break.
(COMMERCIAL BREAK)
[09:51:36]
QUEST: Disney is about to reopen its Florida theme parks in July. It will be a complicated operation. CNN's Frank Pallotta is with me. What has the
CEO of Disney been telling you about the logistics for how they are going to do? What, by any definition, will be a gargantuan task to open up these
parks safely?
FRANK PALLOTTA, CNN MEDIA REPORTER: Well, it was announced yesterday that Disney World is going to open its Magic Kingdom and Animal Kingdom parks on
July 11th and then follow up a little bit later on July 15th with Hollywood Studio's Epcot.
Now, I'm a Disney annual pass holder and I was curious to actually ask the Disney CEO why it is now safe to go back. But Disney put forth some health
guidelines, some including social distancing inside of the parks. The suspension of parades and fireworks and things that bring together crowds.
And, of course, limited capacity.
But with limited capacity, that also kind of hurts the profitability potentially of the park, so I asked Bob Chapek about that, the Disney CEO,
yesterday.
(BEGIN VIDEO CLIP)
BOB CHAPEK, CEO, WALT DISNEY: We won't open a park unless we can at least cover variable costs essentially, the costs to operate the park.
So, then beyond that, it becomes a question of trying to cover your overhead and your capital expenses that you have and we'll make some baby
steps toward that, but we won't be essentially losing money.
(END VIDEO CLIP)
PALLOTTA: Yes, this is a really big, big, big investment in Disney. Disney's parks are a huge part of the company. In fact, when they did
earnings earlier this year, they said that 58 percent was hit by the parks being closed. That was a huge, huge hit to them.
And at the same time, they also need to figure out how to -- sorry about that.
QUEST: No, sorry. That big hit. I mean, they've opened up Disneyland or the Disney Park in Asia, so they've got some experience of this, but the
problem here is, it really comes down to, is it a case that if you build it, they will come?
Is there a feeling -- I mean, you've not only got to open it, you've got to get people to go there and that means, airlines and hotels. Of course, they
are well aware of this. I suspect they are expecting numbers to be on the low side.
PALLOTTA: Yes, I think the thing that -- the better question to ask is not if people will come, but what is stopping people from coming?
And I think, two big things are going to be that you are required to wear masks inside of the park, both park's guests and cast members. That is
going to be really hot in Central Florida in the middle of summer. That might be tough.
And the other thing, which I talked about with Bob Chapek yesterday was about the distancing. He talked a little bit about how spacing out at the
parks is going to work.
(BEGIN VIDEO CLIP)
CHAPEK: So, what we're doing is using the six-foot social distancing in order to set what the capacity should be. So, our industrial engineers have
been busy over the last few months, trying to figure out what that would look like and the capacity that we're going to open up with is actually
slightly below where we really think we can reside with that six feet.
(END VIDEO CLIP)
PALLOTTA: So, the thing is that Disneyworld is going to be back but it is going to be very, very different than the Disneyworld we've known.
QUEST: Frank, thank you. Frank Pallotta reporting. Before I leave you, I need to bring you --
[09:55:10]
QUEST: President Trump has just tweeted about the fact that there are now 100,000 COVID deaths in the United States. The President said, "We've
reached a very sad milestone with the coronavirus pandemic deaths reaching 100,000. To all of the families and friends of those who have passed, I
want to extend my heartfelt sympathy and love for everything that these great people stood for and represent. God be with you."
Those are the comments from President Trump. He had come under some criticism that he had not responded yesterday when the hundred thousand
number was reached.
Now, as the day moves on, there will be the question of what he says publicly besides that tweet in any of his public events, and of course, it
will renew the controversy over the fact the President does not and will not, it seems, wear a mask.
That is FIRST MOVE for this morning. I am Richard Quest. Thank you so much for joining us. I'll be back with "Quest Means Business" a few hours from
now.
Whatever you're up to between now and then, I hope it's profitable.
(COMMERCIAL BREAK)
[10:00:00]
END
