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First Move with Julia Chatterley
China Passes Its Contentious Hong Kong Security Law But Details Are Scarce; The E.U. Prepares To Open Up, But Not To Americans; Crunching COVID: How Japan Is Using A Super Computer To Fight The Virus. Aired 9-10a ET
Aired June 30, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:09]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here's your need to know.
Security scare. China passes its contentious Hong Kong security law. Details, though, are scarce.
Border ban. The E.U. prepares to open up, but not to Americans.
And crunching COVID. How Japan is using a super computer to fight the virus.
It's Tuesday, let's make a move.
Welcome to FIRST MOVE, as always, great to be with you and it's a case of two moves forward, one move back at least as far as the reopenings of
global economies go.
Let me walk you through what we're seeing right now. Here in the United States, at least 16 U.S. states have paused or rolled back their reopening
measures. Parts of the Australian City of Melbourne have introduced some lockdown measures there after the largest spike in two months, and the
U.K.'s first local lockdown has been tightened in Leicester.
Meanwhile, in Africa, Nigeria, many have also extended some lockdown measures thereto. It's too early to gauge the extent of the economic impact
this will have.
Surely, it will extend the time to recovery, though, and that will be, I think, the message that we get from Fed Chair Jerome Powell when he and
Treasury Secretary Mnuchin speak to Congress later today. The sheer scale of the uncertainty.
The problem here, the Federal Reserve Bank of St. Louis says just 53 percent of Americans are able to work and actually have a job right now. An
alarming number, especially with extended unemployment benefits set to run out one month from now.
Time, I think, to act and extend for Congress.
U.S. futures are taking a pause after a two percent Dow rally yesterday. The second quarter performance from the Dow is strong, though, at 14
percent gains, 16 percent if you're looking at the S&P 500, but little of that gain happened in this current month.
The S&P barely in positive territory on the month. Now, contrast that with Asia where the finish was strong as new data shows China's manufacturing
services sectors back in growth mode this month, beating expectations.
And Hong Kong, meanwhile, rising 0.5 percent despite China formally passing, as I mentioned, its sweeping national security law for the city
and that is where we're beginning the drivers today.
China's move, a response to months of protests against Beijing's interference in the city; Hong Kong's Chief Executive, Carrie Lam, says the
new law comes into effect today.
Pro-democracy activist, Joshua Wong said on Twitter, "It marks the end of the Hong Kong that the world knew before."
Ivan Watson is live in Hong Kong with more. Ivan, great to have you with us. However expected, this move by Beijing to enact this National Security
Law, as you can see there, it's devastating for some of these protesters, and we don't really know what this law contains yet.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: We don't. And I think you're underlining one of the real kind of contradictions here, that the
highest-ranked official here in Hong Kong, Carrie Lam, announced that this law would go in effect later today. It's already 9:00 p.m. here in Hong
Kong, and nobody in the city knows what's actually in the law.
Add to how surreal this is, is that Carrie Lam and her administration have, for weeks, been celebrating this law, saying it's going to be wonderful for
this former British colony while neither knowing what's going to be in it nor being included in the drafting of the law, which was done in Beijing by
the National Peoples' Congress behind closed doors.
The Chinese leader, Xi Jinping, reportedly signed it into effect today. It has had a chilling impact already.
As you mentioned, Joshua Wong, one pro-democracy activist here, resigning from his party. His party, Demosisto then declaring that they were
basically shutting their doors.
Several other Hong Kong pro-democracy parties also say they are shutting down their Hong Kong offices because the authorities who are celebrating
this law before, again, we know the contents of it, what they have told us is that it will criminalize crimes such as sedition, subversion, terrorism,
collusion with foreign powers.
But as we've seen in authoritarian countries, like Mainland China, the definition of those crimes and who falls under those crimes is very opaque
and can be used to silence anybody who angers the state, and that is really the concern right now here in Hong Kong.
Add to the fact that tomorrow is the 23rd Anniversary of the handover of Hong Kong from British rule to Mainland Chinese rule. The biggest pro-
democracy protest of the year has been banned for the first time in decades here in Hong Kong tomorrow.
Some activists say they will still march, but if this law goes into effect, will all those people possibly be suddenly accused of committing acts of
treason by criticizing, possibly, the authorities here in Hong Kong or in Beijing -- Julia.
[09:05:49]
CHATTERLEY: I think the belief here is and the fear is, Ivan, to exactly what you're saying that the one country, two systems is de facto over as a
result of this, because whatever the law says, the powers here are so vast and reaching that it's effectively the end of autonomy.
Is that what people are saying to you? Because that has huge business implications. We have had businesses like HSBC, like Standard Chartered
saying, look, we're okay with this law and they've come under fierce criticism for seemingly siding with China over this.
WATSON: Well, China has exerted some real muscle over corporations based here in Hong Kong. Effectively forcing the firing of the CEO of Cathay
Pacific last year amid the months of increasingly violent anti-government protests that roiled the city that are basically being used as
justification for ramming through this new legislation and for completely bypassing Hong Kong's own elected legislative body, the Legislative
Council. Its building is just a couple hundred meters from where I'm standing right now.
It's not just pro-democracy activists that have criticized this here in Hong Kong. It's also foreign governments like Britain, which is a
cosignatory to an international treaty with China which was supposed to maintain semi-autonomy for Hong Kong until the year 2047.
Also, Japan, the G-7 states, the U.S., which has announced that it will impose sanctions on current and former Chinese officials it accuses of
eroding Hong Kong's autonomy, also the U.S. has been threatening to remove favored trading status with Hong Kong, a separate status that it applies to
the rest of Mainland China, and China has vowed kind of tit-for-tat retaliatory measures against U.S. citizens here while not clarifying who
they might be.
So, all of this is part of what feels like a historic moment of change taking place, and of a kind of freewheeling politically tolerant Hong Kong
potentially changing irreversibly as of, I guess, whatever hour this new law comes into effect.
I will add that the Hong Kong authorities insist that this new law, which they have not read, will only affect a tiny minority of suspected
criminals. But how do you define that minority -- Julia.
CHATTERLEY: Precisely. And we need knows details. Ivan Watson, thank you so much for bringing us all the details there.
All right. Let's move on. The E.U. is opening up its external borders for some. We're awaiting a list of countries whose tourists will be allowed to
travel to the E.U. from July and we're also expecting some notable omissions.
Fred Pleitgen is in Brussels for us. Fred, we're waiting that decision. We've actually been waiting that decision some hours and they obviously
have to get all the E.U. leaders to decide what their nation is going to do. There can be exceptions, but when you look at the health mandate here
and the challenges, the United States here looks like it will be excluded.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it's pretty sure that the U.S. is going to be excluded, and Julia, you're absolutely
right, it is one of those days in Brussels where things are running only about three hours behind schedule.
And you're absolutely right, the reason for that is not all the member states have signed off on that list that they are going to have to before
that list is going to be published. So, we are still waiting for that to happen. We're hoping that it will happen fairly soon and when it does
happen, there's really several interesting points about what that list is going to contain.
Most likely China is going to be on the list of countries whose citizens are going to be allowed to travel back to the European Union, but only if
there's reciprocity of China also allowing Europeans back in.
And if you look at the list very closely, one of the interesting things is that, it's not necessarily wealthy countries who are on that, but countries
who have simply been very, very effective at beating back the pandemic, including Algeria, Morocco, Tunisia, Rwanda, for instance, all of whom at
least have -- judging by what the E.U. is saying have done a better job than the United States of beating back this pandemic.
And the European officials have always said that all of this is purely medical criteria. It's the coronavirus situation in the countries of origin
where people want to travel to the European Union. Right now, with those surges going on in the United States, very clearly, U.S. travelers are not
going to be able to come back here to the European Union, at least at this point in time on July 1st, tomorrow, obviously, when this new list is set
to take effect.
[09:10:23]
PLEITGEN: And again, we're waiting for it to come down hopefully any moment so we can then confirm the 15 countries that are going to be on that list -
- Julia.
CHATTERLEY: Yes, a further incentive to get the health crisis more under control. Fred Pleitgen in Brussels, thank you so much for that.
Now, Ford, Puma and Pfizer are some of the latest big brands to boycott Facebook's advertising platform over its hate speech policies or lack of
them. While the social media platform, Twitch, is suspending the Trump campaign account. It's a video streaming platform, of course. And Reddit
has banned a pro-Trump forum called The_Donald.
Richard Quest joins me now. Great to have you with us, Richard. Some of the newer platforms here taking a bolder stance than some of the older ones.
Arguably, they have less to lose in terms of financial interest, perhaps, as well and advertising eyeballs. What do we think, Richard? Does any of
this make a difference?
RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Well, the Twitch one is actually banning or suspended an official Donald Trump campaign streaming
service, so that is a sea change, in a sense. This isn't tangential. This is actually banning something that's got a direct line to the President.
You can see the causation through the President.
And one more thing, Julia. One of the videos that they -- the reasons that they banned was because of that video of the President coming down the
escalator at the start of his campaign several years ago. That was the one where he gave that speech about Mexican druggists and rapists coming to the
United States. They are classifying that as hate speech and therefore that's one of the reasons why they're banning it.
Now, whether they're right or not on hate speech, that particular speech can arguably have gone into the annals of American political history
because it was the kickoff point, I remember him making it, dramatic, extraordinary, and that's now being said as one of the reasons of hate
speech.
So, you see here, Julia, how the difficulties lie for these different social media sites.
CHATTERLEY: Yes. And actually, Twitch is an interesting one because they said they would start issuing permanent bans. They said this last week for
content like this, although I believe this is a temporary ban as far as the Trump campaign is concerned.
But you know, when you add up the big brands and we look at Facebook, specifically, because these are the ones that I think are facing most heat
at this moment, the biggest advertisers, the hundred biggest brands are just six percent of their advertising revenue, they have eight million
advertising spenders here.
I just don't see, beyond the political pressure that we're seeing here, and I mean, the pressure to make these suspensions, whether Mark Zuckerberg,
who has all control here, decides to do anything material about it.
QUEST: If you look at what the actual campaign, Stop Hate For Profit campaign wants, you see the things they have not got are not the apologies,
they are not the various we'll introduce new policies on monitoring. No, they want to get into the guts of Facebook. They want representation at the
C-suite. They want new monitors. They want consumers to be able to get direct contact with the monitors.
They are looking at a wholesale shift in the way that Facebook would handle this, from a practical -- and what I found impressive about the campaign is
that they haven't gone for, we want nice-sounding or well-meaning phrases and policies. They actually want root and branch change within the company
that would affect it and that's why Facebook won't budge.
That's why Facebook has basically said, as I said yesterday, Facebook is basically saying, we know what you want, but we also are warning you,
boycotts and bans will not budge us.
CHATTERLEY: So, the answer is no, you don't think anything necessarily will change as far as Mark Zuckerberg is concerned?
QUEST: Oh, I think not for Facebook. Not -- not for Facebook, Julia. Not for Facebook. But I think we're heading dangerously to the Voltaire quote,
which I know is never far from your reading, you know, I disagree valiantly with what you say and believe but I'll fight to the death for your right to
say it.
We're getting very close to at what point you can say, look, I hate what you're saying, but actually you do have a right to say it, and that's where
Facebook is closer to the line.
[09:15:06]
CHATTERLEY: Then they have to accept being regulated by the F.C.C. like everybody else, like all of us. It's not fair to put all the content out
there and not be regulated the same way as someone like us who would have to deal with it.
But my other point, very quickly, and then I have to move on because I'm being shouted at is -- advertisers -- pulling advertising money in an
economic recession temporarily when this is the first thing that you would be pulling anyway.
I want some of these guys to give money to a charity or to the appropriate charities. I don't know what they're doing with the money that they're
suspending giving to Facebook here for advertising.
Guys, let us know what you're doing with the money.
QUEST: Some have.
CHATTERLEY: Have they? Okay, good.
QUEST: Some have. Some won't. Some will never.
CHATTERLEY: We will reconvene on this. Richard, thank you so much. Richard Quest there.
All right. Naughty. India has banned TikTok and dozens more popular mobile apps from Chinese firms as part of the fallout from the growing hostility
from the two nations since deadly border clashes earlier this month.
Sherisse Pham has more. Huge growth opportunities for TikTok here in India, millions of users, revenue opportunity here, too. This is painful.
SHERISSE PHAM, CNN BUSINESS REPORTER: This is painful for TikTok. TikTok has a lot to lose in India. The country is TikTok's top market for
downloads, 660 million downloads to date in India and analysts telling me that the company stands to lose up to 150 million downloads because of this
ban if it's enacted and lasts through the rest of the year.
Let's go through a couple more numbers here because they are staggering. Of course, whenever you're talking about a country as large as India. So, what
is the big loss that could happen to TikTok in India is, of course, what you were talking about with Richard there, these social media platforms
pulling a lot of money from advertising revenue and an analyst telling me that this year, Bytedance had forecast they were going to bring in $1
billion in advertising revenue in India, and that is -- it's a drop in the bucket compared to what they bring in around the world, about $20 billion
in 2019.
But it's a fast-growing market, the digital advertising market in India projected to grow 26 percent this year. And all of this, of course, is now
in jeopardy for TikTok and for its parent company, Bytedance. Their India business is in jeopardy.
A TikTok spokesperson did not comment for this story for us today, but they said earlier that they are, quote, " ... committed to working with the
government to demonstrate our dedication to user security and our commitment to the country overall."
But it is not clear how this ban will be enacted, when it will be enacted, and how long it could possibly last.
But for now, it looks like TikTok and a lot of other Chinese firms and Chinese apps are locked out of this massive market and the Indian
government shows no sign of letting them back in any time soon.
CHATTERLEY: Sherisse Pham, great to have you with us and great insight and work on that.
All right, coming up on FIRST MOVE, the CEO of a company providing the plumbing for payment online, the cash is flowing thanks to orders from
home.
And later in the show, meet the man behind the world's fastest calculator. It's a super computer which is going up after the coronavirus. Stay with
us.
(COMMERCIAL BREAK)
[09:21:23]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. futures are softer on the final day of the second quarter. Reopening challenges once again front and
center.
AMC has announced that it will delay opening U.S. movie theaters until the end of July. Here in New York, even more conservative, Broadway officials
say curtains won't rise again until January at the earliest.
Boeing shares, meanwhile, set to pull back a little after a blistering 14 percent rally on Monday. Shares spiked as the firm began test flights of
the revamped 737 MAX.
And bank shares are mostly lower premarket today, too. Every major U.S. bank, excluding Wells Fargo, said they did well enough in last week's
stress test results to maintain their current dividend payouts.
JPMorgan, though, said it could cut its dividend if economic conditions deteriorate. They've warned in the past about that, too.
Now, the United States accounts for around a quarter of coronavirus cases worldwide. At least 16 states have halted their reopening plans as the
number of new infections surge and the situation is not improving. Only two states now reporting a decline in fresh cases over the past week. Randi
Kaye has more.
(BEGIN VIDEOTAPE)
RANDI KAYE, CNN CORRESPONDENT (voice over): More South Florida beaches will be closed this Fourth of July as local leaders watch coronavirus cases
surge across the Sunshine State.
(BEGIN VIDEO CLIP)
MAYOR DEAN TRANTAILS (D), FORT LAUDERDALE, FLORIDA: We decided to close our beaches this weekend mainly because holiday weekends especially are known
for attracting large numbers of people.
(END VIDEO CLIP)
KAYE (voice over): The Florida Department of Health reporting over 5,000 new infections Monday. Still, Governor Ron DeSantis has not made wearing
masks mandatory statewide.
(BEGIN VIDEO CLIP)
GOV. RON DESANTIS (R-FL): We left it to the locals to -- to make decisions about whether they want to use coercive measures or impose any type of
criminal penalties. You know, we're not going to do that statewide.
(END VIDEO CLIP)
KAYE (voice over): This, as Jacksonville joins the list of cities now requiring them in indoor spaces where social distancing is not possible,
ahead of hosting the Republican National Convention this August.
Beaches in Los Angeles will also be closed this holiday weekend. Health officials citing nearly 3,000 new cases, the highest one-day total ever
reported in L.A. County.
(BEGIN VIDEO CLIP)
MAYOR ERIC GARCETTI (D), LOS ANGELES: This year we have to think about saving lives.
(END VIDEO CLIP)
KAYE (voice over): California's one of at least 16 states modifying or pausing their reopening plans.
And now in Arizona, bars, gyms, movie theaters, and water parks will close for the next 30 days. Gatherings over 50 people are also prohibited. Still,
Governor Doug Ducey stopping short of issuing a statewide facial covering requirement.
(BEGIN VIDEO CLIP)
GOV. DOUG DUCEY (R-AZ): Our expectation is that next week, our numbers will be worse. It will take several weeks for the mitigations that we have put
in place and are putting in place to take effect, but they will take effect.
(END VIDEO CLIP)
KAYE (voice over): New York and New Jersey's governors are looking to stop spikes from happening in their states yet again.
In New York City, Broadway will remain dark through the end of the year. New York Governor Andrew Cuomo says he is considering slowing the city's
reopening, citing some troubling signs of people not following social distancing.
Meanwhile, indoor dining in New Jersey is postponed indefinitely.
(BEGIN VIDEO CLIP)
GOV. PHIL MURPHY (D-NJ): This isn't a forever and for always. We've gone through hell in New Jersey. We've lost over 13,000 people. We're trying to
do everything we can to not go through hell again.
(END VIDEO CLIP)
KAYE (voice over): This morning, one C.D.C. expert warning, it may already be too late to control the spread of the disease across the United States.
(BEGIN VIDEO CLIP)
DR. ANNE SCHUCHAT, PRINCIPAL DEPUTY DIRECTOR OF THE CDC: I think there was a lot of wishful thinking around the country that, hey, summer,
everything's going to be fine, we're over this, and we are not even beginning to be over this. We have way too much virus across the country
for that.
(END VIDEOTAPE)
[09:25:12]
CHATTERLEY: Randi Kaye reporting there and the climbing cases means many businesses across the nation have been forced to shut down for a second
time, just as access to emergency aid in the form of small business loans, the so-called Paycheck Protection Program, expires. Phil Mattingly reports.
(BEGIN VIDEOTAPE)
JESSICA FIERRO, OWNER, ATREVIDA BEER COMPANY: The shutting doors is the very definition of losing your livelihood for a lot of small businesses.
(END VIDEO CLIP)
PHIL MATTINGLY, CNN U.S. CONGRESSIONAL CORRESPONDENT (voice over): What happens when hundreds of billions of federal dollars simply isn't enough?
(BEGIN VIDEO CLIP)
RICHARD FIERRO, OWNER, ATREVIDA BEER COMPANY: And we're worried. We sell stuff $6.00 at a time. So it's not like we're, you know, Apple selling, you
know, a computer at $2,000.00 a pop. We're not that business.
(END VIDEO CLIP)
MATTINGLY (voice over): It's the wrenching question small business owners like Jess and Rich Fierro of Atrevida Beer Company are grappling with as
the cornerstone of the small business Federal lifeline, the Paycheck Protection Program, comes to an end today.
(BEGIN VIDEO CLIP)
J. FIERRO: It's such a fluid situation that no one really knows when it's going to start to kind of die down and then we do start to die down and
then it starts to peek right back up.
(END VIDEO CLIP)
MATTINGLY (voice over): The Fierro's run the first female Latino owned brewery in Colorado. And between their inventive, socially conscious beers
--
(BEGIN VIDEO CLIP)
J. FIERRO: I would love to see more of a Latin influence, you know, in the craft beer industry. We are no strangers to partying. We are no strangers
to drinking.
UNIDENTIFIED FEMALE: Yes. Yes.
R. FIERRO: We're going to lift some things. I'm going to show you to brew beer.
(END VIDEO CLIP)
MATTINGLY: And they're equally ingenious Facebook content, they quickly made a name for themselves in Colorado Springs. Then, the pandemic hit in
March.
(BEGIN VIDEO CLIP)
J. FIERRO: We're a family business.
(END VIDEO CLIP)
MATTINGLY (voice over): And it changed everything.
(BEGIN VIDEO CLIP)
J. FIERRO: You know, we're both owners. I'm the head brewer. My husband is there 90 percent of the time. My daughter works front of the house as well.
So it's -- it's scary.
(END VIDEO CLIP)
MATTINGLY (voice over): They received a PPP loan, and it helped. But it could only go so far.
(BEGIN VIDEO CLIP)
R. FIERRO: It didn't solve the problems. What it did was sustain us for a few more months.
(END VIDEO CLIP)
MATTINGLY (voice over): The program is credited by government officials for saving millions of jobs. With more than 4.8 million small business owners
tapping into the funds for more than $519 billion in loans.
But the lawmakers who created the program acknowledge, the scale of the pandemic driven downturn simply wasn't expected. And even with the Federal
assistance, the hit has been devastating.
Between February and May, companies with fewer than 500 employees lost 11.6 million jobs, or 18.4 percent of their workforce. The structure of the
program between the period the money needed to be used to the inability to ask for a second loan has left shuttered restaurants in particularly dire
straits.
(BEGIN VIDEO CLIP)
R. FIERRO: We drive to work with that -- that notion of, let's be positive today, let's do it, but we are slowly seeing, you know, front awnings come
down.
(END VIDEO CLIP)
MATTINGLY (voice over): And the problems the program encountered from a rocky rollout and constantly shifting rules, to strict limits on how funds
could be used, chilled its effectiveness in recent weeks.
In fact, the program will shut down on Tuesday with more than $134 billion funds untapped. Lawmakers have committed to redeploying those unused funds
soon in the next round of stimulus, but soon may not be enough for some small businesses.
(BEGIN VIDEO CLIP)
R. FIERRO: There's a lot of hard work being done by folks that are not asking for handouts, that are not running around asking for anybody to
solve their problems. What we're looking for is the opportunity to continue to fight to get to where we want to be.
(END VIDEOTAPE)
CHATTERLEY: Phil Mattingly reporting there.
All right, so we're back after this with the market open. Stay with us.
(COMMERCIAL BREAK)
[09:31:48]
CHATTERLEY: Welcome back to FIRST MOVE and U.S. stocks are open for trading this Tuesday, as I mentioned earlier, the final trading day of the month
and quarter, and it looks like Wall Street will end it not with a bang, but with a little bit of a whimper.
We're seeing a lower start to the trading day as investors await the testimony of Treasury Secretary Steven Mnuchin and Fed Chair Jay Powell on
Capitol Hill.
Powell, in his opening statement says that the path forward for the economy remains, quote, "extraordinarily uncertain." Expect to hear fresh pleas for
increased stimulus, though carefully, of course, not crossing any lines there on his mandate.
Morgan Stanley now says the only way the U.S. sees a V-shaped recovery is with more emergency spending. We've long said it.
Let's get to our top story now. China has passed a sweeping national security law for Hong Kong despite strong criticism from the United States
and other nations.
In Britain, which handed Hong Kong back to China in 1997, the government says it's waiting to see the detail of the law.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, BRITISH PRIME MINISTER: We are obviously deeply concerned about the decision to pass the National Security Law in Beijing as it
affects Hong Kong.
We will be looking at the law very carefully. We will want to scrutinize it properly to understand whether it's in conflict with the Joint Declaration
between the U.K. and China, and you know, we'll be setting out our response in due course.
You'll have heard what I have already said about our duty to the BN(O)s in Hong Kong.
(END VIDEO CLIP)
CHATTERLEY: David Culver burning the midnight oil for us once again. David, great to have you with us. Only China and the Beijing authorities actually
know the contents of this law at this moment, which is one thing, but the timing here also feels strategic with the international community busy
dealing with their own situations with the COVID outbreak.
DAVID CULVER, CNN CORRESPONDENT: No question, Julia. Yes, I mean, the distraction that's going on with many of the other countries in the world
that would naturally be opposing this and perhaps in more vocal and active way, but as of now, China seems to be moving forward with it amidst this
coronavirus distraction for the rest of the world.
I mean, the reality here is there is so much unknown, and it's this fear and the vagueness of it that is continuing to spread, so we don't have the
specifics of what exactly it will mean, but what China has laid out and state media has put it out there that President Xi Jinping himself has
already signed this, is that this will ban secession, subversion, terrorism and collusion with foreign forces.
Now, when they mention foreign forces, no question a lot of that is focused in on the United States and we saw over the past year, China and Beijing in
particular was quite frustrated and even embarrassed at times with how things were going within Hong Kong with the protests that played out
starting just about a year ago at this time.
And now, they are trying to exert their -- not only control -- but also their influence moving forward and push out any external influence. So,
what we do expect over the next few hours or so, I say 12 hours from now even, we should have some more information.
I'll even be attending a press conference here in Beijing that will give us a bit more of an understanding as to how this may play out in effect, but
the reality is, it's already having a lot of uneasiness spread across Hong Kong and the territory there just over the border and no doubt that will
continue as more details emerge here.
But right now, it seems that everyone is really understanding that this will be a significant change for Hong Kong as we know it.
[09:35:35]
CHATTERLEY: Absolutely, and only serving to ratchet up the tension between China and the rest of the world at the same time. David Culver, thank you
so much for joining us on that.
All right, the coronavirus pandemic is changing our shopping habits. It did it overnight, and with the surge in digital payments, the sector is ripe
for both growth and disruption.
One contender is card issuing and payment processing platform Marqeta. Its technology allows clients to provide card services instantly by connecting
firms to big payment networks like Visa without them needing them to develop their own infrastructure.
As the pandemic hit, the company was able to react incredibly quickly, March and April, in fact, were the busiest for the firm in history. Now,
alongside Visa, Marqeta is also backed by Goldman-Sachs and counts the likes of Door Dash, Uber, and Square among its clients.
Jason Gardner is founder and CEO of Marqeta and he joins us now.
Jason, fantastic to have you with us. You've got a lot going on. In your own words, just explain what the company does.
JASON GARDNER, FOUNDER AND CEO, MARQETA: Well, Julia, thank you for having me. This is certainly unprecedented times. So, Marqeta provides
infrastructure, a platform to companies that want to build Visa and Mastercard card products. They can be physical plastic cards, they can be
tokenized cards that link to Apple Pay and Google Pay, or they can be virtual cards.
And what they do is they basically they are both consumer or commercial use cases, so that they can build these cards to solve specific constituency
issues that they're looking to bring to market.
CHATTERLEY: What you've got is actually quite revolutionary when we're talking about things like Instacart or Door Dash, when you've got a
delivery person going to a store to collect something for someone else and the way that they can use your version of the card to make that payment,
just explain how this part of the business works.
GARDNER: Yes, so think about, you have 500,000 drivers, whether it's Door Dash or Instacart or Postmates or Uber Eats or Grub Hub, you have a number
of customers out there that, when these drivers go to pick up food, you've got to make sure whether it is a restaurant or a grocery store, they're
picking up the right order at the right time for the right consumer.
So our infrastructure provides products to our customers so that when the driver is going to pick up the order and that card is swiped or a phone is
tapped, it allows our customers to do an order match in real-time to make sure that the right order is being picked up at the right time for the
right amount, and that allows them to not only reduce fraud down to almost zero, it allows them to scale infinitely, whether it's here in the U.S.,
Canada, Europe, Or Asia where we operate.
CHATTERLEY: And I'm assuming that has a critical piece of solving the theft puzzle as well and the challenge that you have, particularly in this part
of the business.
GARDNER: Yes. I mean, fraud is a normal part of the card ecosystem. We see that on a pretty regular basis. What I can say is over the 11 years we've
been operating, we've seen almost every facet of fraud, and we are able to essentially stop it in its tracks.
Our infrastructure is pretty unique because it allows our customers to go build the products that are specific to an issue, whether it's on demand
delivery, disbursements, e-commerce, buy now, pay later for companies like a firm, Afterpay or Klarna, and it allows them to not only provide this --
what we see as really essential infrastructure today, but it also allows them to affect the transactions or approve those transactions, which, in
your words, really reduces fraud down to near zero.
CHATTERLEY: I'm assuming that the way that you make money is you just take a cut, a small piece of the transaction size so you just, on each
transaction that goes through, you take your cut and therefore, as a result of COVID, where we've seen massive increases in transaction volume, you've
done well financially.
GARDNER: Yes, the company has done very well the last few months. We've seen record volumes across the platform and the core reason, as you point
to, is we're providing essential infrastructure for these companies that, frankly, deal with food delivery.
Now, food delivery has, in the time of COVID, has become this truly essential services, including my 83-year-old mother-in-law, who never heard
of Instacart but gets her groceries delivered on a fairly regular basis now.
So, we, as a company, are really focused on providing those services. We do get a cut of what is called interchange. It's what the merchant pays to
accept payment cards, and that's what allows us to grow.
[19:40:25]
GARDNER: We've seen a lot of unique things going on. We've seen New England, for instance, six times, you know, the typical ordering we see in
on-demand delivery. We've seen a 10X increase in mobile phone payments, so paying with Apple Pay or Google Pay at the point of sale.
We're seeing where essentially cash has become a carrier of COVID or is considered dirty and we've seen really a number of really interesting facts
happen just in the last three and a half months alone.
CHATTERLEY: Do you think we can sustain this going forward? Because to your point, there's been a fear associated with physical cash over this period,
and really, until we get a vaccine, or we get through this somehow, that will remain.
Do you think beyond that, demand for your products and the growth that we've seen will be sustained? What's your sense of what the future looks
like?
GARDNER: Well, the future is now. I mean, we've seen even digital first technologies which, as a company, we believe would be three or four years
away are happening right now.
We're seeing where people are beginning to pay with their phones. They're not, you know, tapping -- they're not inserting their cards or swiping
their cards. They're actually tapping them on the machines because this obviously is concerned about COVID.
Now, we've seen where certainly here in the U.S., where we see a sort of a reverse in regards to opening up the economy, so we're definitely going to
see this for some time. You know, what's going to happen late in the year or next year around cash and around people still going to be going to ATMs
to take out cash? Will they begin even more paying with their phone? I will bet on it.
I think we're going to see a real shift in human behavior around how we pay for things. We'll definitely see an increase in e-commerce, more than we've
already seen today. We'll see even more significant increase in paying at the point of sale with Apple Pay and Google Pay and other, you know, mobile
first types of technologies.
It's been a pretty significant shift in human behavior in a relatively short period of time and it's global. It's a social engineering experiment
that we've never experienced in our lifetimes.
CHATTERLEY: And particularly for, I say, the United States, it's actually forcing a catch up with places in Southeast Asia or China where you go and
this is perfectly normal and we're years and years behind.
Jason, come back and talk to us because there's so much more to discuss. That was just a taster of what you guys do, and we will continue the
conversation.
Jason Gardner, CEO of Marqeta there. Thank you.
All right, after the break, big computers have come a long way since the gleaming rooms filled with giant gray boxes. We're actually using giant
black boxes now. I'm joking, of course. Japan is celebrating this impressive looking beast.
It is called a Fugaku, and right now, it is waging war on coronavirus. Stay with us. We'll have the details next.
(COMMERCIAL BREAK)
[09:46:25]
CHATTERLEY: Welcome back to FIRST MOVE. Japan is famous for staggering technological innovations, and now, it's the home of the world's fastest
supercomputer. The Fugaku came top of the list in four performance benchmarks of the top 500 list, put it ahead of rivals in both the United
States and China, and this machine is crazy fast.
In the top 500 tests, it clocked up a score of 415 petaflops. Indiana University says, to keep up with one of those computers, you need to
perform one calculation every second for nearly 32 million years.
Now multiply that by 415 and that's one calculation every second for a mere 13.2 billion years. Wowsers. And guess what? You can run Word on it, too.
Right now, that processing power is being used in the fight against coronavirus. Professor Satoshi Matsuoka is Director at the Riken Center for
Computational Science, and he joins us now.
Professor, fantastic to have you on the show. Congratulations on this supercomputer. That is impressively fast.
PROFESSOR SATOSHI MATSUOKA, DIRECTOR, RIKEN CENTER FOR COMPUTATIONAL SCIENCE: Thank you very much. And of course, we're very proud of our
achievement. We have been working on this machine for the past ten years.
CHATTERLEY: Wow.
MATSUOKA: To become Japan's flagship super computer, so we're very proud.
CHATTERLEY: Talk to me about the fight against COVID-19 and the work that you are doing on the computer, simulations for things like trains and the
spread of droplets. Can you explain what you're doing and what you're finding?
MATSUOKA: Well, Fugaku was originally slated to be operational in early '21, but because of this coronavirus situation, we deployed it a year early
because the machine had already been in place and going on further development that was good enough to be deployed for various activities
regarding mitigating coronavirus.
And one branch of activities is basically to try to mitigate the spread of the virus by trying to see when people cough, when they talk, or sing, or
whatnot, with their masks or face guards, what would spread of the virus be under different kinds of environments.
And we're finding various innovative results with respect to, for example, how high the partitions between, let's say, office space has to be, which
was not presented -- recorded before in more empirical based experiments.
Also, of course, we try to develop drugs and vaccines, for example, one of the resource groups is testing over 2,000 potential candidate compounds.
Drugs that are already approved, but otherwise have not been applied to coronavirus, but are promising and we're doing various microscopic tests at
the molecule level to see if they work.
CHATTERLEY: You also downloaded the contact tracing app that Japan is using on to your smartphone and you ran simulations on that too to assess what
the computer believed is the proportion of the country that needs to be using that tracing app in order to make it most effective. It's pretty
high.
MATSUOKA: Yes, indeed. Of course, the tracing app had just been deployed, and of course, it's -- you know, if it's available to -- of course, the
download will be available to everyone for free and of course, that's also the case for most countries, but what is the percentage of population does
that need to be spread to in order to be effective?
[09:50:11]
MATSUOKA: And we ran, again, on Fugaku, we ran simulations to see a very detailed simulation as to the contact situations and how people might get
contagious and so forth.
And we're finding that a significantly high percentage of people need to actually have this application for it to be effective. So, these kinds of
educational activities are very important, again, for mitigation, and that's some of our findings.
CHATTERLEY: Yes, it's very clever, 60 percent, I believe, according to your simulations, 60 percent of people using this contact tracing app.
The other thing that I thought about was given Japan's geographical location, seismic activity, earthquakes, tsunamis, modeling those and
perhaps escape routes. Is that something else that this supercomputer perhaps could number crunch and process and provide value for the nation
on?
MATSUOKA: Yes, you know, Japan is one of the most -- one of the advanced countries in the world, but it is probably the most disastrous in terms of
all the natural disasters we get.
We've got the whole works. We have earthquakes, tsunamis, typhoons, you name it, as you mentioned. So, disaster mitigation is very serious,
especially serious for us and the supercomputers play a very important role.
And it's not just, you know, single phenomena that we're simulating. It's a combined phenomena. Like for example, when you have an earthquake, you get
a tsunami, and you get the water in the cities, people trying to evacuate, but the buildings are destroyed because of the earthquakes, which will
block these passageways for evacuation, so then what's the mitigation measure to allow people to escape?
So these are very complicated simulations requiring both traditional simulation and AI, but our new supercomputer, Fugaku, excels at both and
will be utilized to try to keep people's lives safe and also protect our economy and livelihood.
CHATTERLEY: Yes, and it's the practical applications of this beyond the sheer scale of it. We're showing some pictures here.
Just very quickly, how much is this computer worth, Professor?
MATSUOKA: Well, the whole project is over $1 billion. Plus the electricity bill we have to pay every year, which actually increases the cost even
more.
But you know, when you think of the overall effect of how much lives we save or what's the impact on the economy, the positive impact on the
economy, as well as propelling our I.T. because what we've done is to really develop a CPU that's, like, that's forefront of all the other CPUs
in the industry and that's why we have the number one machine.
When you combine all those effects, we believe it is well worth the cost.
CHATTERLEY: Yes. One, you can't put a price on life and $1 billion relative to the savings and the knowledge it's providing is incredible.
Professor, fantastic to have you on the show. Thank you so much for joining us.
MATSUOKA: Thank you very much. My pleasure.
CHATTERLEY: Professor Matsuoka there, Director at the Riken Center for Computational Science. Thank you for staying up so late, by the way. I know
it's late there.
MATSUOKA: No problem.
CHATTERLEY: You're watching CNN. More to come. Stay with us.
(COMMERCIAL BREAK)
[09:55:35]
CHATTERLEY: News just in to CNN, the E.U. travel list we mentioned earlier in the show has finally been confirmed. No surprises. Starting from
Wednesday, tourists from 15 countries, including China, Australia, New Zealand, and Japan will be allowed to travel to the European Union.
Those countries deemed to have the coronavirus pandemic under control. The United States is notably absent.
All right, that's it for the show. You've been watching First Move. I'm Julia Chatterley. Stay safe, and I'll see you tomorrow. Have a good day.
(COMMERCIAL BREAK)
[10:00:00]
END
