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First Move with Julia Chatterley
Positive News On The Biotech Vaccine Trials Lift Stocks; Market Turbulence Means Soaring Revenues For Goldman-Sachs; President Trump Revokes Hong Kong's Special Trading Relationship. Aired 9-10a ET
Aired July 15, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:25]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Moderna momentum. Positive news on the biotech vaccine trials lift stocks.
Goldman's gains. Market turbulence means soaring revenues for the U.S. bank.
And revised relations. President Trump revokes Hong Kong's special trading relationship.
It's Wednesday. Let's make a move.
A warm welcome once again to FIRST MOVE and welcome to another hour showcasing of how the technology can play in improving and saving lives.
Microsoft's CEO, Satya Nadella will join us live to discuss their latest alliance, aiming to improve both farming and internet connectivity across
rural America.
Plus, the CEO of Zipline is going to join us to tell us how drones are aiding caregivers in the fight against COVID-19.
Technology also helping drive stock. Futures high this morning as I've mentioned following news that Moderna's COVID vaccine is showing positive
results. It is set to enter late stage trials later this month.
Vaccine optimism has been a big theme throughout the week. Actually, stocks gained Tuesday. The tech was a relative underperformer as you can see
there, just relatively, value outpacing Vroom, let's call it that with red hot, Tesla up a mere one percent in yesterday's trading session.
In the meantime, Apple is on the rise at premarket after winning its $15 billion tax battle with the E.U. aka it doesn't need to pay it.
Goldman-Sachs, meanwhile, the latest bank to report results this morning, too. We'll get the details next.
And to Asia now where Chinese stocks fell as tensions with the U.S. rose, all the details on that coming up as well.
Good news from South Korea where unemployment eased from multi-year highs. Though, I have to say in Japan, the Central Bank lowering its economic
forecasts and its outlook, but offered no new stimulus moves.
I think the U.S. Fed Governor Lael Brainard said it best when she described a thick fog of uncertainty at this moment about the outlook.
That message echoed in many ways by JPMorgan's CEO, Jamie Dimon yesterday, and Goldman CEO David Solomon today -- big challenges remain.
Let's get to the drivers. Christine Romans joins me now. Wow, Christine, but what performance for Goldman Sachs here. The Federal Reserve helping to
take care of Goldman Sachs's second highest quarterly revenues on record, and I'm only half joking. What a performance.
ROMANS: It is really -- it is as if Goldman Sachs were built for exactly this environment, when you look at the advisory business, the investment
banking and then just that amazing, amazing revenue from trading.
You know, turbulent markets are exactly the kind of business that Goldman Sachs is primed for, and it did very, very well in this quarter.
And so you're seeing -- I mean, I think you're going to see a big gain in the Dow when it opens because, you know, the Dow is 30 stocks and Goldman
Sachs is going to have an outside influence here overall in the market today -- just a strong quarter.
But you're right to point out that all of these sees -- the bank CEOs we've heard up from so far, are saying that the future is uncertain, and they're
putting aside an awful lot of money to try to cushion and weather what could be busts from consumers and from corporate borrowers.
So on the one hand, you have this boon to the balance sheet from Goldman Sachs; on the other hand, a still very uncertain recovery ahead.
CHATTERLEY: Yes, I love the way you put it. This is a bank that's built for this kind of environment, less exposure to consumers, even they setting
aside $1.5 billion here for potential credit losses. And when we look over the past two quarters, it is billions and billions and billions of dollars
that these banks are putting aside because they simply don't know how bad the damage is going to be.
People have been cushioned for the past quarters. You know, I have discussed many times, what comes next?
ROMANS: We're facing this sort of, I guess, stimulus cliff, right, in the very near term of Congress doesn't do something else. The Fed has basically
promised what I would consider unlimited support for the markets, and that might be one reason why, you know, markets have been doing so well over the
past three months or so.
But still, that uncertainty hangs over everything. You know, you've got this promising results from Moderna from its vaccine. That's incredibly
favorable for the market at the moment, but it's not certain, and a vaccine getting into the hands of hundreds of millions of people is still months
and months and months away.
[09:05:10]
ROMANS: So one wonders if the stock market here is priced for perfection - - at the moment, you know, it's just impossible to say.
CHATTERLEY: And we will keep saying it, I think Christine, at least for now.
ROMANS: You and I are a broken record of that.
CHATTERLEY: Yes. Yes. Moving swiftly on. Christine Romans, thank you so much for that.
China has vowed to retaliate after President Trump approved a law that allows the sanctioning of Chinese officials. He also issued an Executive
Order to end the preferential trading status for Hong Kong.
David Culver is live in Beijing. David, we were only just talking about this tit-for-tat response from Beijing when it sees action from the United
States, but for Hong Kongers, this is again, a very pivotal moment -- a pivotal decision by the United States.
DAVID CULVER, CNN CORRESPONDENT: No question, Julia. You're right. I mean, you were talking with Christine there about it being a broken record. I
mean, it seems to be the same here, as we're saying yet again, increased tensions between the U.S. and China.
However, you could expand that now and say, the West and China. This most recent one involving obviously the global financial hub, that is Hong Kong,
and maybe in the future, we'd be saying, you know, was Hong Kong because it seems to be changing rather quickly.
President Trump making good on his threat to revoke that special trade status, essentially getting away from the exemption of certain tariffs that
Hong Kong enjoyed for so long. But it's now all rooted in this National Security Law, this law that was really coming into effect July 1. Mainland
China, Beijing here officials saying that they're trying to crack down on secession, subversion, terrorism and collusion with foreign forces, and
they look at the U.S. in particular here.
So now, what does this mean going forward? Well, Beijing is saying they're going to come back strong, with necessary measures, as they put it. They're
a bit vague on that, but they do say that they are looking at sanctions against U.S. personnel, as well as entities.
And as you mentioned, Julia, it comes after they have already issued sanctions against some U.S. lawmakers for another issue altogether,
Xinjiang and that is the far western region in which there were widespread allegations of human rights abuses against the Uyghur ethnic minority
there.
And then add to that, complications with Huawei and the U.K., and then add to that, the South China Sea and the tensions rising there. So, it's just
this combination of really a worsening relationship between the U.S. and China and one that's added more threats going back and forth and now claims
for more sanctions.
We'll see what that means. I mean, it remains to be seen how exactly Beijing intends to respond with specifics.
CHATTERLEY: It's quite fascinating because you've just built up all the layers of the ratcheting up of tensions that we've seen to do with many
different topics, notwithstanding, of course, COVID-19, in the absolute middle of it.
Interesting to see Trump in that press conference yesterday saying, look, the Trade Deal is still intact, because China is still buying the
agricultural products that it promised to make. At the core of this, a trading relationship that matters.
CULVER: It is. You know what's really interesting, and I listened closely to what President Trump had to say last night, and I'm always listening to
see if he's going to directly criticize President Xi, because I think that would be a game changer in all of this. Certainly, when it comes to the
trade deal, in particular.
Now, he was asked if he had spoken to President Xi, he said no, and he doesn't have intentions to, but then on the Chinese side of things, we
often look at how they're characterizing President Trump and they never really criticized him directly.
They'll criticize the U.S. in general. They'll go after certain lawmakers. Certainly, they'll criticize Secretary of State Mike Pompeo. But I think
when we start to see a shift in that rhetoric and if we see each leader being called out directly, that would signal a real change here.
CHATTERLEY: Yes, we're watching exactly the same things. No plans to talk, but no criticism.
David Culver, thank you so much for.
CULVER: Right.
CHATTERLEY: All right, so on to the oil market now. Awaiting news today from OPEC and its allies, an advisory committee is discussing future
production levels. The cuts in place at the moment expire this month.
John Defterios joins me now. John, the question here is whether they decide to extend those cuts or they ease them back slightly, and that's going to
come down to what demand looks like going forward. What do we think here?
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, they've had the meeting now, Julia, for about 45 minutes and they made their intentions
very clear in the first 15 minutes that they're ready to go to Phase 2, and they've had to do some fancy footwork, if you will, to get to this point.
If we look at Brent through the year, it's been a very tumultuous ride. Remember what the price were back in March, and then we had the pandemic
really set in by the third week of April. We were negative on WTI and had $16.00 on Brent.
So we had the Saudi Minister, Abdulaziz bin Salman and his counterpart, Alexander Novak, very much on the same page today saying that look, the
status quo was 9.7 million this month, the agreement was to go to 7.7 in August. That's what they intend to do right now. They think the market is
starting to stabilize.
[09:10:22]
DEFTERIOS: And the OPEC Secretary General, Mohammed Barkindo in the last 24 hours, signaled a shift, that's for sure.
He said that the market is nearly balanced right now and they expect demand, to your point, Julia, to recover to seven million barrels a day in
2021.
We have to keep in mind, it's down nine to ten million barrels a day this year after that drop of nearly 30 million in April.
There is one tricky point here, Julia, and that goes back to the Saudi Minister. He has suggested to Iraq and Nigeria, two OPEC members that
because you didn't make the cuts in May in June when everybody else was doing so as deep as you promised to do so, when we go to 7.7 come August,
you have to add to your cuts to make up the difference.
So is trying to send a signal to the market, that it won't be 7.7. It'll be slightly higher than that. And the tricky part for those countries is that
because of the pandemic, Julia, they are so reliant on oil right now for, say, 90 percent, in the case of Iraq for its revenues, it's hard to go to
the people and say, we're cutting more production as prices start to rise.
But they had phone calls with the Saudi Minister, and remember, in September 2019, when we spoke to him during his first interview, when
taking the post, he said, we agree on this OPEC Plus arrangement, but Saudi is not going to carry the can alone.
And lo and behold, 10 months into that process, that's what he is doing today. The market seems to like it, Julia. We are up better than one
percent for both the WTI and Brent at the stage.
CHATTERLEY: The market seems to like it, but some pretty tough conversations now and in the future, I fear. John Defterios, thank you so
much for that.
All right, coming up on FIRST MOVE. The pandemic has made us thankful for two things we rely on every day: the security of our food supplies and our
need to stay connected with technology.
The CEO of Microsoft, he comes up next to tell us about a new alliance bringing the two together.
Plus, no protection, no problem. The company is shipping PPE by drone, serious stuff or a lofty ambition. We'll discuss. Stay with us.
(COMMERCIAL BREAK)
[09:15:18]
CHATTERLEY: Welcome back to FIRST MOVE live from New York where positive medical news is helping boost U.S. stock market futures yet again, this
time from biotech firm, Moderna.
It's COVID vaccine is showing promise in early stage trials, Phase 3 trials, more expanded are set for later this summer. Moderna shares are
currently up more than 12 percent premarket for the year. Shares have risen almost 300 percent.
In the meantime, AstraZeneca is up more than three percent in London trading, too. Report is saying it may update investors on its COVID vaccine
as soon as tomorrow. AstraZeneca is developing its vaccine along with Oxford University.
Now of all the lessons learned during this pandemic, two, I think are particularly pivotal.
First, the need to ensure the security of our food supplies; and secondly technology that drives connectivity efficiency and helps us foster
innovation.
Well, this is precisely what the new strategic partnership between Microsoft and Land O'Lakes is targeting. Land O'Lakes is one of America's
largest farming cooperatives and the alliance with Microsoft will boost productivity, sustainability and broadband connectivity across rural
America.
And I'm very excited to say, Beth Ford, President and CEO of Land O'Lakes and Satya Nadella, CEO of Microsoft join us now.
Great to have you both on the show. Fantastic to hear about this new partnership. Satya, I just want to begin with you because this sounds like
a fantastic example of taking cutting edge technology out of Silicon Valley and putting it to work in the real economy and impacting real lives.
SATYA NADELLA, CEO, MICROSOFT: Absolutely, Julia. First of all, it's great to be with you and Beth this morning.
You're absolutely right. For us, it is core to our mission to ensure that it's not about celebrating technology for technology's sake, but it's the
impact and we are now taking the oldest industry we have, which is our farming industry and making sure that agriculture can benefit from some of
these advances in AI and Cloud and IoT.
And so, this is a pretty broad partnership. We are very excited about what we can do together both in terms of putting deep insights with farmers
around sustainable farming, around precision agriculture, also connecting markets for sustainability with the soil cap, you know, the ability for
soil to recapture carbon, as well as broadband connectivity in rural communities.
All three of these are part of this deep partnership, and we're very excited to be working with Beth and team to bring this all.
CHATTERLEY: Beth, I am sure you share that excitement, too. There's clearly already plenty of science in your operations and in what goes on in
farming already. But now we're talking about data driven farming and precision agriculture. What does it mean in practice for the farmer?
BETH FORD, PRESIDENT AND CEO, LAND O'LAKES: Yes, this is about not just efficiency, but it's about optimization, and Satya said it very well. It's
like he is reading our mind here that, you know, this data can be used and the analytics and the leverage of the tools that Microsoft and the
expertise that Microsoft has can be used by farmers to improve the efficiency of their decision making.
They're making multiple decisions right now in the year, and at the same time, they can optimize both their profitability and their sustainable
production. It is such an important component, leveraging data acre by acre to improve decision making, and that's what this partnership is about.
We do have deep expertise. We have trillions of data points, but leveraging the tools that Microsoft brings and their expertise with their FarmBeats
Program. There's Azure AI. It just improves the efficiency and then the unified architecture will allow a farmer to make an efficient decision in
season.
CHATTERLEY: Yes, I mean, there are a lot of people watching going, hang on a second, you've got a lot of data. But how do you even collect that data
when you're out in the field?
Satya, talk to me about FarmBeats, because I know it's something that you've employed in places like India, and in China using things like
sensors and drones, literally to collect this data. What lessons have you learned over there that can be applied in rural America? And to Beth's
point here, be put to work?
NADELLA: No, absolutely. And also in Carnation, which is just down the road from where I live we have done this, which is, and Beth talked about
this, which is in some sense, Land O'Lakes has been doing this for a long time where they've been collecting this data, analyzing this data and
putting the insights from that into the hands of farmers.
And now with this new technology, whether it's IoT sensors, which have now become very cheap, so that means you can have even higher precision
microclimate predictions which, of course, can lead to better precision agriculture, better sustainable practices, because of the power of Cloud
through broadband connectivity being brought essentially to the edge, which is the farm.
[09:20:12]
NADELLA: So it's the combination of these secular technology trends, the IoT, AI and Cloud coming together to take what Land O'Lakes has
historically done. In fact, one of the things that was just stunning for me to learn about was the amount of data that already was there, and also the
platforms Beth and team have already built and now we want to take it to the next level.
CHATTERLEY: Yes, it's about combining all of those. I have to say, I was astonished as well, you're already leading in your field in terms of the
use of data in farming, Beth.
You know, one of the obvious concerns here will be, look, if we're talking about greater efficiency, if we're talking about optimization using
technology -- that will come at the cost of jobs. What's your response to that? Does it just create different ones or will there be job losses?
FORD: This is not about a job loss issue at all. This is just about the leverage of technology to improve decision making. So this is not something
about replacing others.
In fact, our agronomists work directly with farmers. It's kind of a belly to belly business where we're out there, but this allows them the right
level of insight to provide a differentiated piece of advice to the farmer.
And literally, this is an acre to acre decision making capability. So as Satya mentions, we're leveraging this and we're leveraging this deep data
and our tools, our R7 tools through our Winfield Technologies business, but then leveraging them in a way that allows a farmer for instance, to improve
their sustainable production.
Should they, for instance, go to no till? Should they go to variable rate application of fertilizers? What does that look like? And then what's the
return on that investment because at the same time, we're trying to improve sustainable production using data and analytics. We also have to make sure
that we have a farmer that is profitable for the long term.
So, this isn't about a job replacement. This is about an enabler for the agronomist and for the farmer to improve their decision making.
CHATTERLEY: Upskilling, which I know is also key to something else that you're both also collaborating on, and you've done your own work
individually, but this is about making sure that we don't see, particularly through the last few months a widening of the digital divide, and it's
something that we've seen a lot of people benefit from, and be able to cope with the last few months as a result of internet connectivity for certain
parts of America.
We're talking millions of people, particularly in rural communities -- lack of access to broadband and internet is a critical problem. Satya, you are
working on this as well.
NADELLA: No, that's -- you're absolutely right, because the foundation to all of what Beth and I are talking about is access to the Cloud, access to
the Internet, and that's why broadband is so critical.
And so, we are taking the initiative we've had with our band bringing it together with Beth's work, with the community centers across 19 states, and
this is not just about farming and access for farmers for all of what is the technology that they are going to deploy for precision agriculture and
sustainable agriculture, but also for the communities.
To your point earlier, if you think about the rural community today, they are going to thrive if the entire community is able to get the education,
the upscaling the health and all of what, you know, e-commerce and other facilities directly reaching them where they are, so that they can then
have as a community, more access to the latest and greatest technology and skills that come with it.
And that's why broadband is such a fundamental right, and we're very, very excited about this partnership there.
CHATTERLEY: Beth, I know you're passionate about this, too.
FORD: I am and this is so exciting to hear this, you know, it's never just one thing. It's never the technology for technology's sake. This is why I
love partnership with Satya and the Microsoft team.
This is an ecosystem. Vibrancy of our rural communities and partnership with a safe, affordable food supply and then creating jobs is critical.
It's a national security issue.
As I said, this is a pillar of our national security. We have to have vibrant rural communities. So technology is an enabler, for instance, to
close this healthcare gap.
We have a shortage of say 40,000 doctors in rural America. School systems lack broadband and technology access. So education is under invested in,
and here we are, all of us working from home, we have to have access to healthcare. We've had partnerships, in addition with Microsoft, with the
Mayo Clinic, with the Cleveland Clinic with Minnesota Health and other partners to allow access for the population in rural communities to contact
the healthcare provider.
We heard from the Mayo Clinic for instance, that they had more telemedicine appointments in one day than they had had all of last year. So this is an
experiment. It is an enabler and it is critical for the stabilization and the vibrancy of these communities that are critical to the United States
and to our farm system and our food system.
CHATTERLEY: Yes, all have this is such a key component of many of the discussions that we've been having, particularly in recent weeks inclusion,
driving inequality and trying to tackle that as well.
Diversity, of course, not just here in the United States, but more broadly. Certainly, when I think about diversity, instantly, I think that the
technology firms, the Big Tech firms get a lot of criticism here.
What's your view on how best to drive greater diversity at the management level, not just within a business? How do we go about that and achieve
that?
[09:25:41]
NADELLA: I mean, it starts with representation, Julia. You're absolutely right. I mean, at some level, any talk of diversity has to start in our
case from the inside where we need to have -- in fact, I was just looking at our intern class. It's an amazingly diverse class and to your point, it
needs to be reflected right all the way to the top and.
And so we have now got commitments whether it's about race, and especially for the African-American, black and Latinx community, as well as gender,
and to be able to have actual metrics.
In fact, I, myself am measured on it, metrics on it and paid on it. And so we now want to take representation. And of course, representation can only
be sustained if you have a culture of inclusion. So that's an everyday practice, where you have to work in every meeting, every promotion
decision.
The lived experience cannot be different from an espoused culture, and that's all the hard work ahead of us. But we're very, very focused on it.
CHATTERLEY: I like the idea of a CEO in particular being benchmarked on this, too, because it has to go right to the top.
Beth, this in many ways is a personal thing for Land O'Lakes. You're based in Minnesota, obviously, where George Floyd lost his life. What does it
mean for you and for your farmers? What more can be done by business?
FORD: Yes, of course, our farmers are nationwide and around the world, but for the community, this was terribly painful. I mean, the disparate
outcomes for the African-American, the black community in Minneapolis is just unacceptable and this is not something that just I say, but most of
the businesses and there are multiple Fortune 500 companies headquartered in Minneapolis, for instance.
So I think Satya's comment about it starts from the top is exactly where the CEOs of the businesses in the Twin Cities are. We can -- we have to
continue to make progress, and one of the things we have to do better is we have to listen.
We have to listen to the fear of the issues. That's not my experience, of course, because I don't live that journey. I haven't lived that journey.
So until we really understand that and then take action. We're going to have this kind of issue. In addition to some of the things that Satya was
talking about, metrics, we are focused on for instance, unconscious bias training for all of our employees. Being transparent about our diverse
populations within our organization, but then also outside in our communities. How are we engaging to make sure that there's inclusion?
Because it's not about whether we are hiring appropriately for diverse candidates, it is about whether they're feeling some level of inclusion at
work and in their communities. It advantages everybody.
So it is particularly painful. It's very difficult. But I do believe there's a commitment from the leadership and from, certainly, our
organization to make progress.
CHATTERLEY: Satya, very quickly, I want to ask you about what seemingly is the White House stepping back from banning student visas for international
students that aren't actually in school in the United States. You came, I believe to the United States on an H-1B visa and you stayed here. So this
again is a personal thing for you. What are your views on this decision? And what does it mean for American innovation?
NADELLA: No, absolutely. We welcome the White House decision yesterday. In fact, I came on a student visa, an F-1, and then I did go down an H-1, and
then ultimately to citizenship.
I always speak from my own personal experience. I'm a product of two great American things: American technology reaching me where I was growing up so
that I could dream the American dream and then the enlightened immigration policy of this country that led me live that dream.
And so, I will always advocate for it. I think the United States, it's in our self-interest, quite frankly, to have an immigration policy that allows
us to bring the best and the brightest, as well as show our humanity, because that I think, is the soft power of this country. It is what makes
this country unique and different and I hope we preserve it, because I think that makes America stronger.
CHATTERLEY: Two great examples, I think of great American leadership and American innovation, too. Both of you, thank you so much for joining us on
the show under good luck with the strategic partnership. It looks fantastic. Beth Ford, CEO of Land O'Lakes and Satya Nadella, CEO of
Microsoft.
NADELLA: Thank you so much.
FORD: Thank you.
CHATTERLEY: Thank you once again. Thank you. All right. We are back after this with the market open. Stay with us.
(COMMERCIAL BREAK)
[09:33:20]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are open and up and trading this Wednesday, a busy news flow again this session. Positive news
as we've discussed on the COVID vaccines helping send stock markets higher as you can see.
The U.S.-China trade tensions are also something to keep an eye on, too. Plus another stellar performance from the Wall Street trading desk. Goldman
Sachs rallying after reporting revenues of more than $13 billion in Q2. That's their second best on record. Bond trading revenue surging 150
percent.
Let's give thanks to the Fed's emergency aid programs for the support here. Goldman's also boosting its loan provisions by another $1.5 billion. Just
the latest bank to set aside more money for bad loans in the second quarter. What was it Christine Romans said? Built for this kind of
environment. That's Goldman Sachs.
Now, economic reopening winners like the airlines and the cruise lines also gaining ground in early trading. These stocks are among the most volatile
on Wall Street and have been all throughout this year. The favorites of the day traders, too, on sites like Robinhood. Well, they're gaining this
morning.
All right, another story today that we are following closely. President Trump issuing an Executive Order on Hong Kong, ending the preferential
trade and commercial relationship that's been in place since 1992.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Their freedom has been taken away, their rights have been taken away and with it goes Hong Kong,
in my opinion because it will no longer be able to compete with free markets. A lot of people will be leaving Hong Kong, I suspect.
(END VIDEO CLIP)
CHATTERLEY: This Executive Order coming just days after a recent survey by the American Chamber of Commerce in Hong Kong showed just over three
quarters of American companies there say they are concerned about the new National Security Law, but nearly half say they personally have no plans to
leave Hong Kong.
[09:35:19]
CHATTERLEY: Joining us now, Tara Joseph. She is the President of the American Chamber of Commerce in Hong Kong. Tara, always fantastic to speak
to you. I thank you for joining us this evening, of course, your time.
TARA JOSEPH, PRESIDENT, AMERICAN CHAMBER OF COMMERCE-HONG KONG (via Skype): Hi, Julia.
CHATTERLEY: That survey, of course, was taken before the Executive Order announcement from President Trump yesterday. Do you think this changes the
mindset for American businesses operating in Hong Kong?
JOSEPH: You know, it's been a difficult year all around the world because of COVID and a recession, et cetera. In Hong Kong, it's like the perfect
storm.
We have COVID. We have a recession. And now we're caught in a huge tit-for- tat between the United States and China. The National Security Law, which came into Hong Kong has been very disconcerting for the American business
community. And now, we are losing that special economic status, that special safety and comfort factor of us being here.
And this is really all about the U.S. and China spat. It's very difficult to digest, and it means we're really in for a new normal in Hong Kong.
CHATTERLEY: I want you to walk us through some of the findings of this survey, because I do think actually, it's very interesting looking at the
details.
I mean, clearly people are concerned, but it's the lack of clarity on simply how this security law is going to be used that's one of the big
conundrums here for businesses.
JOSEPH: Yes, and there are two sides of the survey. So in terms of the concerned part, it's the ambiguity of the law in terms of really
understanding what it is means and how it will be enacted.
There's also worries about the extraterritoriality of the law and whether companies who say something outside of Hong Kong could be liable for the
National Security Law of Hong Kong. That's another one.
And Hong Kong is really Hong Kong, because of its rule of law, its internationally recognized rule of law. There's a sense now that with the
National Security Law, that it could be at risk of being upended, and that is very disconcerting to people.
And also, it's the sense of being able to speak freely, to be able to express one's opinion. There's worry about self-censorship, et cetera
happening all over the place in Hong Kong.
Now, there's the other side of the issue, as you mentioned, 50 percent of our membership say they want to stay in Hong Kong. And that is because
despite all of the risks, Hong Kong still does offer things that no other center offers in Asia.
It has a massive international market. It is the third largest stock market in the world. It has incredible flows of money between the U.S. and China
and other countries. It has great connectivity to all parts of Asia and to Europe, et cetera.
So there are some things that make Hong Kong a very good place, including its tax regime as well.
CHATTERLEY: Yes, it's fascinating. There were a couple of other statistics, and it's all weaved in together, but a quarter just over a
quarter of respondents here saying actually feel safer as a result, which was fascinating to me if that just means, look, we're not going to see
regular protests, because obviously that's also destabilizing for businesses.
But the other issue to your point about Chinese law who rules here, ultimately, the extradition to the Mainland, 45 percent of people saying
that this could be a game changer for its heart -- heartland as a financial center of the world. These are both very important markers.
JOSEPH: Yes, it is. And, you know, it's a difficult time, as I was saying. There's no -- the new normal doesn't feel normal and people are clearly
expressing that in that survey.
The comments were both deep and sometimes emotional. And it is understandable that there is a segment in the survey, that feel, having the
National Security Law and a lack of protests and a lack of violence in the streets is very important to them for their sense of safety, and also for
the importance of Hong Kong as an international business center.
And that's a very different feeling from people who would rather have free speech and worry about their own personal abilities to do business and live
in Hong Kong. So, there are different sides to the story, of course, like anything.
CHATTERLEY: Yes, but at the heart of it, a very uncertain moment.
Tara Joseph, thank you so much for joining us. The President of American Chamber of Commerce in Hong Kong. Always great to have your insights. Thank
you.
JOSEPH: Thank you.
CHATTERLEY: All right, coming up on the show, the life-saving medical gears sent through the sky and dropped off right at your door. Delivery by
drone takes another leap forward.
This is next, stay with us.
(COMMERCIAL BREAK)
[09:43:24]
CHATTERLEY: Welcome back to the show. Nobody on Earth should be more than 30 minutes away from a potential drone delivery. That's the sky high,
literally ambition from a company shipping PPE using drones in the United States.
Zipline perfected the technology in Africa and says it's responsible for 70 percent of blood supplies delivered in Rwanda outside the capital Kigali.
Before we bring in the CEO, let me show you how it works in the U.S. The journey begins at a fulfillment center in North Carolina where a packet of
PPE is loaded on board a drone. The aircraft is launched. It flies 50 kilometers to Huntersville Medical Center where the parcel is then dropped
by parachute to be collected on the ground ready to use.
I'm staring at the pictures as I'm reading it and writing it. It's very exciting.
Keller Rinaudo is the CEO and co-founder of Zipline, and he joins us now. Keller, great to have you on the show. I want to talk about the medical
aspects of this, actually. But the technology is quite fascinating.
Just talk us through this because the accuracy of landing is key, and so is how you collect the drones once you've delivered.
KELLER RINAUDO, CEO AND CO-FOUNDER, ZIPLINE (via Skype): Yes, well, thanks for having me, Julia. And, you know, we try to keep the technology as
simple to use as possible. So any doctor or nurse in our service network can send a text message to Zipline or order through an app, and we will
basically dispatch a product instantly from our distribution center by loading the package into a drone or autonomous aircraft that flies to the
location and then we deliver into their mailbox which is the size of about a couple parking spaces.
Once the package is delivered, the vehicle will turn around by itself home, and once it gets back to the distribution center, we recover the vehicle
using a system that looks a little bit like something you'd find on an aircraft carrier.
But this is a really nice safe way to basically launch and land vehicles. So these vehicles can be operating in a reliable way that people can depend
on with their lives.
[09:45:28]
CHATTERLEY: And the landing is so soft that you see actually people can catch these parcels if they're waiting on the ground in that sort of
postbox area, as you call it.
RINAUDO: Yes, the delivery experience is pretty magical. The idea is that anybody with a cell phone can place an order and receive a package wherever
they are.
CHATTERLEY: So let's talk about what you're doing in the United States because I mentioned there that you perfected the technique in places like
Ghana and Rwanda, but obviously operating drones in the United States is something very different.
RINAUDO: We started -- we originally launched our service in Rwanda in 2016. So, we've now had four years to really get the service to scale, and
to the point where, as you mentioned, today, we're delivering over 70 percent of the national blood supply of Rwanda, including 160 different
public health products.
Most of the medicine that's in the public healthcare supply chain is now delivered on demand by Zipline to thousands of hospitals and health
facilities.
So on one hand, you know, this is something that we're quite -- we really now know how to do at scale, which is why we're so excited to be bringing
it to the U.S., especially in the context of a medical emergency where you see COVID-19 spiking in a number of states.
We really think it is an obvious need for hospitals to have access to instant contactless delivery so that they can, you know, extend the reach
of healthcare systems into patients' homes.
CHATTERLEY: It's quite fascinating. I mean, if I think of even just the terrain, in places like Rwanda, it makes sense to me that this is surely,
probably quicker and more cost effective -- a cost effective way of getting the PPE out to people.
But again, I bring it back to the United States, and I wonder whether in many cases, the existing resources that we have, whether it's UPS or Amazon
or FedEx isn't perhaps equivalent, if not more efficient.
What's your response?
RINAUDO: I think, you know, it's interesting, a lot of people tend to look at the work that we've done in Rwanda and Ghana and assume that the reason
it works is that like there aren't roads to the hospitals or health facilities, and that's actually not true.
There are good roads to all of the thousands of hospitals and health facilities generally, that we serve, so the value isn't so much like the
lack of infrastructure, it's more around a really responsive logistics system.
So when a doctor or nurse needs something, they can get it so quickly that a patient doesn't actually realize the product wasn't stocked at the
hospital or health facility to begin with.
And that need is universal. It's the same between hospitals and health facilities in any country in the world, and it's something that can really
only be delivered by an autonomous instant logistics system like this one, you really can't do that with traditional logistics systems like big
delivery trucks that might go to a location every 24 hours or less.
CHATTERLEY: It makes sense. What does the future hold? Is it going to be about, as I mentioned, the ambition to continue to deliver PPE wherever you
are operating in the world? Or could you see this expanding to other products, for example? And will that require changes to the drone to be
able to carry heavier loads perhaps as well.
RINAUDO: We absolutely anticipate expanding the service in the U.S. in the same way that we've expanded the service in other countries. So, we've
always started with the most urgently needed kind of emergency products. In this case, Zipline has delivered many thousands of units of PPE to two
hospitals in the Greater Charlotte area.
But we absolutely expect, even just contained to COVID-19, we think there's a lot of opportunity to start delivering many different treatments that
chronic care patients might need directly to their homes, if those patients are immunocompromised or elderly, then these are the patients that need to
be staying at home and you actually don't want coming into the hospitals to receive their treatments.
This is something that we're already doing to help other governments in the world combat COVID-19. And then beyond that, when a vaccine is developed,
there's a lot of concern and talk right now for how the logistics of that is going to work and how do we make sure that access is equal between
people who either live in rural areas and live in cities, or people who live in different parts of the country.
And so I think that a system like this that can basically, we can keep inventory centralized and send it to any GPS coordinate when it's needed
and when you have a patient who needs to be vaccinated is a really powerful, exciting option, especially if that vaccine is going to be cold
chain dependent or require, you know, freezing temperatures in order to stay potent.
Those kinds of challenges are really going to require new modes of logistics in order for the U.S. to respond to this pandemic.
[09:50:22]
CHATTERLEY: You know, that was going to be my final question -- vaccine deliveries. The distribution network on this is going to be an incredible
challenge. Come back and talk to as soon, please, because this is just scratching the surface I know of your ambitions and your plans.
Fantastic work and I look forward to speaking to you again soon. Keller Rinaudo there, the CEO and co-founder of Zipline.
RINAUDO: Thank you so much.
CHATTERLEY: Thank you. All right, still ahead, how a growing political dispute now leaving many TikTok stars around the world in limbo. Find out
what that is, up next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. As we discussed yesterday on the show, TikTok is under renewed scrutiny over its ties to China. Its Chinese
owner, of course, the popular video streaming app is already banned in India and the growing international storm is leaving many videos stars
stuck in a political battle as Hadas Gold reports.
(BEGIN VIDEOTAPE)
PARAS TOMAR, ACTOR AND SOCIAL MEDIA INFLUENCER: I have over two million followers on TikTok. Well, I had over two million followers on TikTok.
(END VIDEO CLIP)
HADAS GOLD, CNN BUSINESS REPORTER (voice over): Indian TikTok stars like Paras Tomar are scrambling to adjust to life and business after India
banned the popular app last month. New Delhi warning it poses a threat to sovereignty and integrity following recent clashes in the disputed border
region with China.
(BEGIN VIDEO CLIP)
TOMAR: The ban on TikTok was mixed sentiments. Now, it was a question for most people, which is a mixture of their patriotism being questioned versus
the amount of money that they were making.
(END VIDEO CLIP)
GOLD (voice over): TikTok is owned by Bytedance, a Beijing based company that has been pushed to the front lines of international diplomacy. Now,
the United States is also considering a ban warning that because of the National Security Law, TikTok data could end up in the hands of the Chinese
government.
(BEGIN VIDEO CLIP)
MIKE POMPEO, U.S. SECRETARY OF STATE: We are taking this very seriously. We're certainly looking at it. We've worked on this very issue for a long
time.
(END VIDEO CLIP)
GOLD (voice over): A possibility that makes TikTok influencers like Jake Sweet with more than six million followers nervous.
(BEGIN VIDEO CLIP)
JAKE SWEET, SOCIAL MEDIA INFLUENCER: Well, banning in both of these countries from using TikTok is going to have a phenomenal impact on me and
like thousands and thousands of other creators who put content out there a lot.
I mean, one of my videos I think, had 110 million views and that was primarily U.S. and Indian audience.
(END VIDEO CLIP)
GOLD (voice over): Several experts tell CNN that though TikTok's links to a Chinese company are worthy of concern, most of it data that just wouldn't
be that useful for real espionage.
(BEGIN VIDEO CLIP)
EVA GALPERIN, DIRECTOR OF CYBERSECURITY, ELECTRONIC FRONTIER FOUNDATION: Oh, this is mostly a political move. It depends on what you're doing that
might be of interest to the Chinese government.
[09:55:02]
GALPERIN: If you are again, an activist in Hong Kong, if you are a whistleblower on, you know, Chinese government corruption, I would not
recommend installing TikTok on your phone.
But you know, for your average dancing teenager, probably it's fine.
(END VIDEO CLIP)
GOLD (voice over): It's not just the U.S. government that's concerned. Wells Fargo recently asked its employees to remove TikTok from their
corporate owned devices.
TikTok says it never has and never will share data with the Chinese government and that data from its U.S. users is not stored in China.
But Jake sweet is already trying to diversify and move his audience to other platforms like YouTube and Instagram in preparation for a potential
U.S. ban.
(BEGIN VIDEO CLIP)
SWEET: I still want to be doing what I love and I'm -- whilst all this is happening, obviously concerns are raised and I'm slowly moving my audience
over just as like a safety backup.
(END VIDEO CLIP)
GOLD (voice over): For now, TikTokers are still safe. But as U.S.-China tensions rise, millions of the apps fans worry that they may be approaching
their last lip-sync dance.
Hadas Gold, CNN, London.
(END VIDEOTAPE)
CHATTERLEY: Perhaps Apple or Google should look at buying TikTok U.S. from Bytedance, just saying. That's it for the show. I'm Julia Chatterley.
You've been watching FIRST MOVE. Stay safe and I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
