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First Move with Julia Chatterley
Ukraine: 29 of 30 Missiles Launched by Russia were Intercepted; Chinese Comedian under Investigation over Army-Themed Gag; World Leaders Converge in Japan for G7; Biden: Confident Leaders will Reach Agreement on Debt Limit; Shopify President: Some Countries Getting More Business- Friendly; Forbes Releases Annual "30 Under 30 Asia" List. Aired 9-10a ET
Aired May 18, 2023 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move", and a glow galloping show for you this hour including the race to beat the debt
ceiling clock the U.S. state of Montana voting to ban TikTok. The G7 hoping its alliance remains solid as a rock ahead of talks tackling the Ukraine
war economic shock.
But first signs that a debt ceiling deal is moving closer triggering a mid be bullish stock display on Wednesday with all the major averages up more
than 1 percent, The best one day rally for the S&P in fact in two weeks more cautious trade today though, but European Stocks are rallying.
And House Speaker Kevin McCarthy raising hopes by saying a debt agreement is possible by the weekend. President Biden also competent of a compromise
the problem is they still have to meet in the middle and both be able to say they want that's politics remember too, a rally now.
Also limits the market upside once a deal assuming it does finally getting done. From the debt ceiling smiles to retail store aisles the largest U.S.
retailer Walmart reporting better than expected earnings and raising its full year outlook. Food sales strong but consumers pulling back on big
ticket items like electronics.
Chinese retail giant Alibaba also posting a revenue mess, but its shares set to rise more than 1 percent in early trade on news that it plans to
spin it off its cloud division also a juggernaut pulling context, but our conversation too with the President of the E-commerce platform Shopify,
who's been tracking the global growth of global entrepreneurs.
That's coming up later on in the program. And Asian markets in the spotlight to which Japan gets set to host the summit of G7 nations. Green
arrows as you can see that across the board with the NIKKEI rallying more than 1.5 percent. In fact, the benchmark Japanese stock index riding a six
session winning streak and is now up 17 percent Year-to-date, the broader TOPIX index, hitting 33 year highs.
I think that's a reflection of the upbeat outlook for profits, rock bottom interest rates, of course and a noticeable pickup in inflation and throw in
investor friendly corporate governance reforms. There's a whole bag of the items there that are driving that I think compare though. And contrast with
the mood in China.
The U.S. dollar trading this six month highs against the Chinese Yuan on concerns that the Chinese recovery maybe spluttering. And China just one of
the topics to be discussed at the G7 leaders meeting this week alongside of course the drive for greater security in the Indo-Pacific region.
And as we've mentioned the war in Ukraine and officials there say air defense systems intercepted 29 missiles launched by Russia overnight. This
after China's Special Envoy wrapped up a two day visit to keep meeting with President Zelenskyy. Sam Kiley has all the details.
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: In the latest moves in Crimea, there has been the derailment of an important train link between
two major towns in the Russian occupied peninsula that the Russians captured in 2014 and later illegally annexed is very much part of or rather
the heart of the military efforts against Ukraine, from which a large number of attacks have been launched.
So the Ukrainians are saying that the railway seems to have got exhausted and had some kind of natural collapse. This is a typical tongue in cheek
response that the Ukrainians have developed to any kind of allegations that they've conducted Special Forces rage or long range attacks behind the
Russian lines, particularly inside Russia itself, but also behind the lines in Russian held occupied parts of Ukraine.
But this is just the latest attack which wears away on the Russian ability to reinforce its frontline positions wears away to on the fighting spirit.
The Ukrainians hope of the Russian soldiers but the Russians have been doing their own offensives they're continuing to conduct offensives
according to the Wagner mercenary group inside the City of Bakhmut.
The Ukrainians are saying that they're managing to flank those operational activities of Wagner inside the city, both to the north and the south. With
goals so claiming advances there and at the same time, of course in the air the battle continues. Last night there were some 30 missiles, Ukrainian
say, fired against various locations across the country.
29 they'd say shot down. One may have got through all the debris there have got through and landed in an industrial area in the southern city of a
desert killing one person.
[09:05:00]
But clearly the Russians are continuing their campaign to try to soak up as much of Ukraine's air defenses as they can ahead of an anticipated
Ukrainian ground offensive.
CHATTERLEY: Sam Kiley there and very much tied to what he was saying U.S. Officials say damage to the Patriot missile defense system was minimal
following Russia's attack Nick Cave earlier this week. But Russia state television is telling a very different story. CNN's Matthew Chance has more
on Moscow's information war.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): State television where Russia fight sits information war. Reads story the U.S.
Patriot missile battery, Russia insists it destroyed in Kyiv. U.S. officials tell CNN the system remains operational. But this is too rare a
victory for the pro Kremlin media to play down.
The much promoted Patriot was destroyed by Kinzhal. The presented gloats our hypersonic missiles were so fast. They cut through Ukraine's air
defenses, like a knife through butter she adds. As for the six hypersonic missiles, Ukraine says it shot down a fantasy number the presenter says and
more than we actually fired.
A Senior Ukrainian official now tells CNN only minor damage was caused to the Patriot Air Defense System when one of the Kinzhal was shut down at low
altitude on Tuesday morning. The Official said the U.S. aid system will be repaired soon. And an investigation is now underway into how the Patriot
was targeted.
Elsewhere, Ukraine says small advances have been made around Bakhmut. These night images appear to show an armored push in the fields outside. Russian
state television is in this city touring devastated front lines under constant fire with Wagner mercenaries who say they're confident they will
prevail.
We will take a Bakhmut, eventually this Wagner commander tells the Russian TV crew following him around but at what cost we don't know, he admits.
Another says they're shelling us from afar because they can't defeat us in close combat were too strong, he says.
Ukrainian Officials confirm fierce fighting in the city captured on this latest drone video. Areas of Bakhmut suburbs devastated, but now being
liberated the Ukrainian say. And back on Russian TV, there's growing acceptance that what was meant as a short offensive in Ukraine has spiraled
out of control, exposing weaknesses and divisions in the country.
It's not have a special military operation says this guest on state television but a faithful wall that Russians must win or face destruction.
As Ukraine prepares for a counter offensive to reclaim occupied land, it seems Russia is also bracing for a fight. Matthew Chance, CNN, London.
(END VIDEOTAPE)
CHATTERLEY: And on the eve of the G7 Summit President Joe Biden met with Japanese Prime Minister Fumio Kishida. In a bilateral meeting earlier the
President emphasized America's close relationship with Japan and with China's growing military and economic might.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF UNITED STATES OF AMERICA: As you said, back in January when you were at the White House, I think the quote is we faced the
most one of the most complex environments in recent history, security environments. And I couldn't agree with you more. But I'm proud that the
United States and Japan are facing it together.
And you know, we stand up for the shared values including supporting the brave people in Ukraine as they defend their sovereign territory and
holding Russia accountable for its brutal aggression.
(END VIDEO CLIP)
CHATTERLEY: Marc Stewart joins us now. Marc, so many important issues to discuss the Ukraine war broader Indo-Pacific security China of course and
what's taking place there with Taiwan and yet the President cannot avoid questions that impact everyone at that table, which is whether or not the
United States is going to see a debt ceiling breach, so embarrassing.
[09:10:00]
MARC STEWART, CNN CORRESPONDENT: The debt ceiling doubt no question, Julia, is something that the President just cannot avoid. It's the reason why he
cut his visit short to both Australia and New Guinea. But as you and many of your guests have discussed in recent weeks, a debt default in the U.S.
would not only be harmful to the U.S. economy.
But it could have catastrophic side effects for really the rest of the world and the broader economy. And no matter what the G7 would like to
discuss, it really could create a lot of hardship. So that is why the President is delaying, or at least canceling this portion of the trip to
Australia and to New Guinea.
But on the topic of the debt ceiling, it is something that will likely come up for conversation, when President Biden meets with these various world
leaders tomorrow here in Hiroshima, they are expected to ask him some questions, and he will be expected to give some answers.
With that said, we have heard, for lack of better word, some empathy from the Australian Prime Minister who said he understood why the President had
to make that decision. And it's not as if he won't meet with the leaders of the so called quad, Australia, Japan, India they will all have attendance,
even though they're not all necessarily formal members that G7.
They will be there. So there will be some discussions. But as you just mentioned, a whole list of important issues that also need to be discussed.
Certainly, Ukraine, and on the economic front, that will be a big part of the discussion. Right now, we still see Europe exporting items to Ukraine
or to Russia, we see Japan importing gas from Russia.
That's going to be something to see if that is restricted even further and then, of course, this broader issue of China. What kind of statement will
we get from the G7, if any? A lot of these countries do have an economic stake in the Chinese economy and may not want to rock the boat so much.
But there could be issues about potential sanctions, as well as economic coercion. We'll have to see on that. And finally, Julia, you talk a lot
about artificial intelligence on your program that I am told is also going to be on these G7 discussions.
CHATTERLEY: Yes, fascinating. I can't wait to see what comes from that. But I also love your point about sanctions and you can make a great show of
solidarity. But if people are still purchasing items from Russia, then they're still arguably contributing to financing of the war.
We'll discuss that later on in the show. For now Marc, thank you, great to have you with us, Marc Stewart there. Now a very costly joke policing China
launching an investigation into a comedian over a line he used on stage. The stand-up comic and owners House reference to slogan originally used by
President Xi to describe the progress of the Chinese army and entertainment firm that hired him has been hit with a $2 million fine.
And we believe a woman who appeared to defend him online has also been arrested. Kristie Lu Stout joins us now. I think it underscores first and
foremost the delicate line that comedians have to tread when content is so heavily scrutinized and censored in China. Kristie, what exactly did he
say? What was so bad about what he said?
KRISTIE LU STOUT, CNN CORRESPONDENT: You know it was just eight words Julia, eight words of a well-known PLA slogan. It was delivered as part of
his standup set in Beijing on a Saturday night. This Chinese comic who goes by the word house in English, his Chinese name is Li Haoshi.
He riffed on that slogan that was used in the past by the Chinese Leader Xi Jinping. He made this joke about watching his two rescue dogs is to rescued
stray dogs go chase a squirrel. And it reminded him of that slogan that Xi Jinping used to praise the work ethic of the People's Liberation Army.
Now the joke it went online, it went viral. And then on Wednesday, Beijing Police launched an investigation and authorities they also find the company
that represents nearly 2 million U.S. dollars. And we heard this spring up the statement for you from the Beijing Municipal bureau of Culture and
Tourism saying, "We will never allow any company or individual to wantonly slander the glorious image of the People's Liberation Army on the stage in
the Chinese capital."
The Bureau also added that the company would never be allowed to stage any future shows in Beijing. The company which earlier apologized, has fired
the comedian, the comedian, he himself is apologized profusely online. Now in China, any insults against the military are illegal.
In fact, a couple of years ago, that was when China passed a law banning insults or slander against the military. And right now in the last couple
of days on social media people, some of them are praising the government's decision. They said, hey, this joke crossed the line.
It was an insult, but there are others who fear a wider crackdown on comedy in China and it's easy to see why. In fact, we just learned that a woman in
Northeastern China was detained by police after defending the comedian on social media. So Julia you know the fallout here is far reaching, back to
you.
[09:15:00]
CHATTERLEY: Yes, humor is a luxury it seems in a command economy, yes, high price to pay, Kristie, great to have you with us. Thank you Kristie Lu
Stout there. Now Montana has become the first U.S. state to ban TikTok not just for state employees but for everyone.
The Governor signing the bill into law which comes into effect in January of next year, he's highlighting privacy concerns tied to the Chinese owned
platform. Omar Jimenez has all the details. Omar, great to have you on the show, what's the reaction been?
OMAR JIMENEZ, CNN CORRESPONDENT: Of course? Well, the reaction is from TikTok specifically has been very swift they of course are against this
action. But as you mentioned, Montana becoming the first state in the United States to ban TikTok and literally would be prohibited from
operating within the state lines.
And the short of that concern is it's all over perceived security concerns. So ByteDance owns TikTok that's a Chinese based company ByteDance. And so
U.S. Officials are concerned that the Chinese government could access user data through ByteDance and through TikTok and you see some of those
concerns with the governor of Montana tweeting specifically that to protect Montanans personal and private data from the Chinese Communist Party.
I have banned TikTok in Montana. And so, you know, you see some politics in there, of course, but Biden's did fire employees last year, two of which
were based in China for what they say was improperly accessing personal data of multiple U.S. based journalist.
A Buzzfeed News report last year also highlighted that some Chinese employees had access to U.S. data. Now TikTok is saying that they've made
some internal changes. And this time around and always there's no public evidence Beijing has systematically been accessing this data.
But TikTok is out with a statement in response to the Montana ban, saying that this is infringes on the First Amendment rights of the people of
Montana that we want to reassure Montanans that they can continue using TikTok to express themselves earn a living and find community as we
continue working to defend the rights of our users inside and outside of Montana.
And he testified on Capitol Hill here in the U.S. and Washington, D.C. back in March that all of these concerns are based on hypothetical scenarios,
again, that systematic access to user data. And we've seen Montana joins now the more than half of U.S. States that have banned TikTok on government
issued devices, but of course, this one is the strictest of the mall extending to an outright ban on TikTok, that law goes into effect in
January.
CHATTERLEY: Yes, it's funny that you chose to respond in terms of what TikTok things I was thinking about. What about the users of TikTok?
JIMENEZ: Oh, yes, so -- users camp -- .
CHATTERLEY: Oh my goodness -- I think it's about a fifth of the population. Good luck with that, my friend that --
JIMENEZ: -- I know and by the way, I will say that January is a long way away. I can't imagine this won't go without any last -- .
CHATTERLEY: -- we shall see, Omar, thank you for that. OK, straight ahead. I show of unity in Hiroshima. G7 Leaders gearing up for talks covering
Russia's war and China's growing influence. We'll discuss with Sheila Smith from the Council on Foreign Relations, after this.
(COMMERCIAL BREAK)
[09:20:00]
CHATTERLEY: Welcome back to "First Move" and eyes on Hiroshima are ahead of the G7 Leaders meeting set to begin on Friday. The Summit from the world's
leading democracy is expected to focus on the war in Ukraine and how to counter China's growing influence around the world.
At a bilateral meeting earlier Thursday, Japanese Prime Minister Fumio Kishida told U.S. President Joe Biden that the cooperation between the two
countries has evolved by "leaps and bounds". Joining us now is Sheila Smith. She's the John E. Merow, Senior Fellow for Asia-Pacific Studies at
the Council on Foreign Relations.
Sheila, great to have you with us on the show, I love the way that you described the meeting between these two leaders. And you described it as an
opportunity to bask in multilateral momentum. Describe what you mean, because Kishida certainly put in a lot of geographical legwork ahead of
this meeting?
SHEILA SMITH, SENIOR FELLOW FOR ASIA-PACIFIC STUDIES AT COUNCIL FOR FOREIGN RELATIONS: That's right, Julia, it's great to be with you. So the Japanese
Prime Minister Fumio Kishida has been a very active diplomat statesman of late and especially in the G7 context. So you've seen him, just this year
traveled to Europe to meet with leaders there come here to North America to meet with the Canadian Prime Minister, and obviously, the U.S. President
Joe Biden.
He has a lot at stake in the success of this meeting, but also in making sure that the world understands Japan's commitment to multilateralism. And
you'll hear that in his language, you'll see it, I think, in the G7 statement that will be issued.
There's a lot on the table here for, you know, in terms of not only Ukraine, but also obviously in the Indo-Pacific concerns about China and
Chinese behavior. And of course, the G7 is an economic gathering as well. So the spillover effects of the global economy of the conflict in Europe
are also on the Prime Minister's mind.
CHATTERLEY: Yes, and also taking the time to visit nations in the global south to travel to India to understand what they're thinking ahead of this
too which you point out, and I think it's vitally important. Some part of this conversation, I'm sure too is going to look at the impact of sanctions
on Russia.
And I just wanted to get your take on this, because certainly, we've seen Canada is a great example, voicing their concerns about seafood purchases,
for example, by Japan, from Russia and saying, look, we've got seafood ourselves, you can come to us this idea that they may be talking about sort
of consolidation and collectivity where the response to Russia is concerned, but at the same time, still helping them finance the war.
SMITH: That's right. And I think this is where you're going to see some of the underlying currents at the G7 on the Russian sanctions. Europe, of
course, has paid the highest cost in terms of energy and other impacts to the European economies. Canada, now speaking out, as you point out, Japan
is in deep proximity, right?
Do we forget that Japan's northern border is actually a maritime border with Russia, and so oil, gas, and as you noted, the seafood industry relies
heavily on that relationship with Russia. So Japan has been slow in some ways compared to other G7 countries, but nonetheless has taken steps that
would have not been conceivable, you know, 5 to 10 years ago.
CHATTERLEY: Yes, timber would be the other one, but your point about the border?
SMITH: That's right.
CHATTERLEY: Yes, well taken Indo-Pacific security. Prime Minister Kishida has openly said, look, what we're seeing right now in Ukraine, could very
easily happen in this region, given the tensions that we see in particular, I think, between China and Taiwan.
It's arguably a more difficult conversation having that with the European leaders, perhaps and it is with U.S. President Joe Biden, given the obvious
stance, I think that the French leader took when he was just recently in Beijing, even the German Chancellor where they've said, look, we need our
own path for tackling China and we sort of need that relationship in light of the loss of Russia.
SMITH: That's right. And I think Julia, that's really put your finger on, again, what some of the challenges will be for that G7 joint statement that
will be coming out at the end.
[09:25:00]
France and Germany in particular have made their positions clear that their economies are suffering because of Russian sanctions and have been fairly
explicit to say, China, you can't ask us to stop our deep economic engagement with China. But I think for the Japanese, they also have deep
economic engagement with China.
And I think that's an important piece to remember. I think what the Japanese Prime Minister and perhaps President Biden is also looking for is
a statement that undermining the status quo by aggression unilaterally by force, as the Russians did in Ukraine is not to be tolerated. It's a global
norm.
So whatever the specifics about Taiwan that European leaders feel they can or cannot sign on to, I think that general principle of international
politics are postwar norm, that you cannot take a sovereign country's territory by force. That's the statement diplomatically I think that both
the U.S. President and the Japanese Prime Minister will be looking for.
CHATTERLEY: Yes, the question is, how much can they push the Chinese Leader perhaps to follow their own principles for finding some kind of solution
here because they actually mentioned that point? I want to get your take as well on the perhaps thawing of relations is not the right way to phrase it.
But the better relations between South Korea and Japan at this moment and sort of trifecta of the United States, South Korea and Japan on this, but
beyond true in the region.
SMITH: Yes, Julia, I'm glad you brought that up, because we were very focused on the multilateral setting and the joint statement that will be
coming out of the G7. But of course, there are all kinds of meetings going on the sidelines. And that's I think, the focal point for me.
Anyway, I'll be watching very closely. There is going to be a trilateral leaders meeting between President Yoon of South Korea, President Biden and
Prime Minister Kishida. I expect there have been bilateral summits back and forth between South Korean and Japanese Leaders. So President Yoon went to
Tokyo, Prime Minister Kishida went to Seoul very recently.
And so the expectation here is you're going to get a statement from the three leaders on the deeper cooperation on North Korea and on deterrence on
an extended deterrence preparedness steps, radar other kinds of systemic cooperation. I don't know how far it's going to go. But I'm expecting a
fairly significant statement of security cooperation from that trilateral.
CHATTERLEY: Fantastic! We'll look out for that, too. We can't leave this conversation without talking about the significance of the location of this
meeting too. Particularly amid the concerns of what we're hearing from countries like Iran from North Korea and their efforts with nuclear
proliferation. What do you expect to see new Peace Parks potentially, on the agenda here, just to underscore the need to remain -- ?
SMITH: -- the location of Hiroshima is, of course, really important for the Japanese public, it's particularly personally important for the Prime
Minister, who comes from that region, his family members were there on the day of the atomic bombing. It is something he speaks of frequently, that as
a person from Hiroshima, he feels compelled to continue to raise the issue and to advocate for a world without nuclear weapons.
What I think is going to be interesting to watch is that the leaders will go to the Peace Park, there will be a statement made, and in with this
context of the Russian invasion of Ukraine and President Putin's sort of coercion, if you will, nuclear coercion statement that he's willing to
raise the threshold of violence if necessary, to the nuclear level.
I think this is going to be an interesting moment where the G7 leaders can talk about, once more mitigating the risk of the use of those weapons in a
conflict. So I again, this is an important moment for the Prime Minister not only personally but for Japan, as well to remind the world of there is
a red line, there is not only a political red line, but a moral red line that they don't want to see crossed.
CHATTERLEY: Yes. And it's all about to your point what we get in the statements and perhaps reading between those lines, too. And thanks to you,
we are well prepared. Sheila Smith from the Council on Foreign Relations, really great to chat to you thank, you so much.
SMITH: Thank you, Julia.
CHATTERLEY: Thank you. OK, still to come, the so called X date for a U.S. default just two weeks away according to Treasury calculations, what
President Biden said about the debt ceiling negotiations, head of that trip to Japan, next.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to "First Move". And U.S. Stocks are up and running for the Thursday session and it is a softer picture overall.
Consolidation, perhaps we can call it that after a broad based rally on Wednesday driven by hopes for a debt ceiling agreement more on that in just
a moment.
In the meantime, Wal-Mart and early session winner after posting better than expected profits and sales, that's the largest U.S. retailer also
raising its full year guidance too, thanks in part to strong growth in its grocery and online divisions. And the threat that new technology poses two
jobs firmly in the spotlight today too.
UK telecoms giant BT group is announcing that it's cutting some 55,000 jobs by the year 2030. It's looking to cut costs and make greater use of
artificial intelligence, which is set to replace thousands of positions. Wow. It's the first real sign that we've heard of that. Now before leaving
for Japan, President Biden told reporters he'll be in "Constant contact with his team negotiating with Congress over the debt ceiling debate".
And with House Speaker Kevin McCarthy to, of course time is running out to raise the borrowing limit ahead of June 1. That's the earliest date the
Treasury Department estimates the United States will run out of money to pay its bills and then sets it on the path to triggering a catastrophic
default, which means not paying interest on debt that the technical definition is important.
Arlette Saenz joins us now from the White House. I don't want to make light of it Arlette, but I do think we're going to get to a stage where we both
feel like Groundhog Day when we talk about this on a daily basis. Are we closer than we were yesterday and closer than we were after the weekend?
ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, we're closer one closer day to that potential X date right early as June 1, when the Treasury has
warned that they could potentially default on their debts. But look, President Biden is overseas right now in Japan for the G7 Summit.
While back here in Washington, the work is continuing with his negotiators meeting once again up on Capitol Hill with a representative for House
Speaker Kevin McCarthy. Now, both sides still remain incredibly far apart. But you have seen this commitment from each side to try to engage in these
negotiations in earnest.
A bit earlier today the President, Spokesperson for the National Security Council John Kirby said that the president ultimately felt it was the best
use of his time to return early from this foreign trip. He'll be canceling that Australia and Papua New Guinea portion.
But he does plan on being updated throughout the week as these negotiations continue. In fact one of his most senior aides who typically don't go on
these international trips typically does more of the domestic trips.
[09:35:00]
He is actually on hand on this trip with President Biden to kind of serve as the communicator between the negotiations going on here and getting that
information to the president. But look, each side has said that they do not want to have the United States default on its debts for the first time in
history that would lead to catastrophic economic consequences, but they still have to hammer out how exactly they are going to come together when
it comes to getting a budget agreement.
We've heard a few of the sticking points that have been coming up in those negotiations, including having these work requirements for social safety
net programs, something that the House Speaker sets, he really, really wants. Something that the White House, the president has said that he's not
open to work requirements that would take away health care of a less than wiggle room for some possible other concessions.
But look, these negotiators have a very tall order at hand, trying to come up with a deal within the next two weeks. And let's not forget, it takes a
long time to move legislation up on Capitol Hill. It has to go through the House, it has to go through the Senate, and they have to get all of their
members on board.
This is likely going to need to be a bipartisan deal in order for it to get passed. But this also is a very serious challenge for President Biden on
the world stage as he heads to that G7 Summit without a deal at hand, as the potential default would not just have major ramifications here in the
U.S., but it would have ramifications on the global economy.
So that is something that is likely to come up in these meetings with leaders and he will have to offer assurances that the U.S. will be able to
avoid a default.
CHATTERLEY: Yes, some of these spending measures, it just feels like sort of rearranging deck chairs on the Titanic when you're talking about $31
trillion worth of debt. But I think you get the crux of the show. We may or may not be one day closer to a deal. We are undoubtedly one day closer to a
default without it. Arlette, great to have you with us, thank you.
SAENZ: Thank you.
CHATTERLEY: OK, coming up after the break creating jobs and fueling economic growth. Now new data shows which countries have the most
entrepreneurs, this enterprising index from commerce platform Shopify after the break.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". Data collected from millions of entrepreneurs all around the world has been pulled together for the first
time in a global index measuring their economic benefits. The information was collated by Shopify, the global commerce platform that says it's
effectively a one stop shop for retailers selling online and beyond.
[09:40:00]
Take a look at some of these highlights no surprises, perhaps that the United States tops the list considering the sizable presence Shopify has on
that market. But just take a look at the numbers on the right of your screen. And you'll notice the Czech Republic has the highest rate of job
growth.
You'll see it's up nearly 34 percent year on year, then the strong export growth in Japan that's up nearly 30 percent in a year. Then compare and
contrast with China, exports by Shopify sellers, they're down 19 percent. And as you can see, the other indicators from that nation are lower too,
much to discuss.
Harley Finkelstein is the President of Shopify, and he joins us now. I absolutely love this index. Harley, welcome to the show. I think there's a
given wisdom that entrepreneurship and entrepreneurs specifically are vital to drive jobs and growth. But it's just tough to quantify the impact.
Explain how you did this?
HARLEY FINKELSTEIN, PRESIDENT, SHOPIFY: Yes. So thanks for having me on the show again, Julia, always great to be back here as you know, -- we live and
we breed entrepreneurship. And I think it's clear that entrepreneurs are certainly the backbone of the economy and local communities. They create
jobs, they anchor our cities or towns, but they have a massive impact that goes so much beyond their own business.
The problem is there's never really been any type of database that measures the actual impact of entrepreneurship. So we built one. And so now we're
early launching the Shopify entrepreneurship index, it's going to be a home for data insights, and entrepreneurship across 40 countries in every single
U.S. state.
And we're going to be updating this every single quarter so people can see how things are trending, including where entrepreneurship is booming. And
the reason we did this was no one really no one else has a list like this, the data like we have, because we power millions of stores in the U.S.
alone.
We have more than 10 percent of all e-commerce going through Shopify. So we really thought that it would be an important thing to put out there. And
the reason we're doing it is because we want to power policymakers, government, media public with information, how to create more
entrepreneurship.
Now, one of the things that's fascinating, you pointed this out in your introduction, which I think you hit right on the head, which is that
despite a very challenging macro environment right now, entrepreneurship is having a renaissance. I mean, in the U.S. alone, there was a record 10
million applications over the last two years for new businesses that is higher than the last 20 years. So there's a lot to be excited by when it
comes to entrepreneurship.
CHATTERLEY: Yes, I've got a million questions. If there's something that connects to your point about providing this as a tool, perhaps to see where
policies are working, where there's low wages, perhaps so you can hire people more easily that connects some of the fastest growing regions. Can
you can you see that already, wherever they are geographically in the world?
FINKELSTEIN: Certainly there are countries that are adopting a much more business friendly climate. So here are a couple examples. Easier access to
technology, to high speed internet to funding, encouragement from governments, governments that are actually streamlining regulatory
processes, like things like just registering a business, or patent protection or tax incentives, places where access to capital, and where
permitting is a lot easier, you are seeing more and more entrepreneurs.
And the results as you sort of discuss, they're pretty remarkable. And the U.S. ranks number one, but after that, you get into some other places,
which are maybe a little bit less obvious, which we should talk about as well. But just focus on U.S. for a second, we saw total jobs supported or
jobs created, GDP impact and business activity by Shopify entrepreneurs, each increase by 11 percent since 2021.
And when you expand, you know, beyond just U.S., you see countries, like in Europe, like Lithuania and Romania, play second and third, globally. APAC
continues to grow as a hub for entrepreneurship. But for the top 10 most entrepreneurial countries in the world are actually in Asia, with a
significant concentration coming from East Asia and Australia.
So it's not just happening in U.S., it's happening everywhere. But you're certainly seeing places where they're making a concerted effort to really
foster entrepreneurship that are seeing the biggest results.
CHATTERLEY: Too many questions I want to ask you about all of these things. I found the growth in Eastern Europe, fascinating, given the challenges
that we've got going there, but now you've just teased me with Asia. So we have to talk about that, because I think Japan was one of the ones that
really stood out to me and surprised me.
And obviously, that this was slowdown that we're seeing in China, just as quickly as you can, because I want to talk about Shopify, sort of compare
and contrast and explain what you're seeing in those two places.
FINKELSTEIN: Yes, I mean, Japan ranked number 10 globally, and its impact across every single metric that was measured was up. So business activity
increased by 24 percent. In Japan, jobs supported by our entrepreneurs are up 24 percent and the GDP index is up 23 percent.
So I think Japan is doing a really good job of not only fostering entrepreneurship, but making it a lot easier for the businesses and the
brands and the retailers in Japan to sell outside of Japan. And you know the proof is in the pudding here.
CHATTERLEY: Yes. It is quite fascinating to your point despite of far more challenging funding environment for these entrepreneurs. And you know we
can talk about that but also the economic environment and the uncertainty there too. Speaking of that, let's talk about Shopify.
[09:45:00]
Let's talk about getting back to the basics splitting off the logistics business. And you and I talked about that in the past, and particularly
during the pandemic, how important that was, and its billion dollars' worth of investment.
I've seen this decision described as mature. How do you define the decision? And obviously Investors liked it to say, you know what, we spend
a lot of money. Let's get rid of it and focus on optimizing our core business.
FINKELSTEIN: Yes, I mean, look, Shopify is world class at building commerce software for entrepreneurs and larger businesses as well. And I mean, I
think you know, if you look at the results, 2023 started off incredibly strong for Shopify and our merchants. In Q1 revenue was up 25 percent, GMV
was up 15 percent, accelerating from Q4.
We're also seeing even larger brands like Zhu Lilly and Glossier and Mattel and Heinz and Ted Baker and -- Athletic Greens also coming to Shopify as
well. So in terms of our core metrics, all those were up our attach rate, which measures the actual usage of our products by our merchants is the
highest it's ever been. So these are incredible results.
And we also showed operational discipline. On the bottom line, we were cash flow positive for this quarter, and we provided guidance, we'll be cash
flow positive each and every quarter of this year. But I also in terms of the logistics piece, Shopify really want to create less friction for
entrepreneurship, and for small businesses and larger businesses.
And when we announced logistics and our shipping product back in 2018, there was nobody else doing it, we felt like if we didn't do it, for our
merchants, they would have to do it for themselves. And we're always in a better position, because we're economies of scale. So at the time, it felt
like it was the right thing to do.
But that really was never our main focus. It was never our main quest; it was always a side quest. And as we began to work with Dave Clark and Ryan
over at flex port, we begin to realize that they can do this faster and more effectively, because that is their main quest, shipping and logistics
is all they think about.
And so by selling our logistics business to them, it gets us to focus back on our core competency, which is software and building software for
commerce. And it allows our merchants to get the shipping and fulfillment that that we were trying to build for them. So it's been it's a great deal.
But it also allows us to focus in a way that that we think is very important.
CHATTERLEY: Yes, I mean, if it's additive to the business, and it reduces costs, and it works, see them fine if it doesn't hand it over to somebody
else and get back to basics and the priorities.
FINKELSTEIN: And the basics are super important. You know the basics are important today.
CHATTERLEY: Of course.
FINKELSTEIN: We actually just released a study today from a big three global consulting management consulting firm that shows that Shopify's
checkout converts 36 percent better than competitors like Sales force, and 15 percent on average, our checkouts the best checker on the internet.
That's the stuff that we are the best in the world at. And that's why we're so optimistic with the future of this company.
CHATTERLEY: All right. I have about 45 seconds, because you squeezed the last answer. AI how is that going to transform the business? Be specific,
because I hear a lot of big -- in AI.
FINKELSTEIN: OK, so our view of AI is all about practicality. How does it actually make the lives of businesses better, easier and more effective? So
we're embedding AI into things like product descriptions.
So when you're starting a store on Shopify or you're building store, instead of having to write your own product description, AI using AI,
you're actually going to be able to provide a much better product description that ChatGPT is going to power for you.
Another example is shop.ai, which anyone can go to, which is this incredible concierge. If you're planning a party with a particular theme,
it'll suggest exact products for you. So we think AI is a great technology. But what matters to Shopify is how it makes the lives of entrepreneurs
better. And so the practical part of it is what matters most to us.
CHATTERLEY: If you ever move on from Shopify, you can be addiction teacher, because I swear your word per minute count is the highest of any of the
guests on this show.
FINKELSTEIN: I'll try to keep up with you, Julia.
CHATTERLEY: I know I love it, Harley; it's great to chat to you.
FINKELSTEIN: Thank you always a pleasure.
CHATTERLEY: The President of Shopify there and we'll continue the theme of entrepreneurship after this. This year's Forbes 30 under 30 Asia coming up
next.
(COMMERCIAL BREAK)
[09:50:00]
CHATTERLEY: Welcome back to "First Move". Forbes is announcing its annual 30 under 30 Asia list featuring young people who are driving positive
change in innovation all across the region. And the list is broad from insurance solutions in India, K-pop bands from South Korea to a mental
health advocate in Hong Kong.
And these young people are powerful. They have a combined 220 million followers across social media, and have raised an estimated $1.6 billion
worth of funding, according to Forbes. And joining us now is Rana Wehbe Watson, Special Projects Director at Forbes Asia. Rana, welcome to the
show, this is very exciting.
And I know you've been doing this now for eight years. I think what surprises me most is the sheer breadth and level of innovation. Despite the
fact that we know economic conditions are challenging. And it's tough to get money for some of these young people.
RANA WEHBE WATSON, SPECIAL PROJECTS DIRECTOR, FORBES ASIA: That's right, Julia, thank you for having me exactly. You mentioned the founders on this
year's list, which accounts for about 70 percent of the 300 people on the list, have raised a total of $1.6 billion in funding this year.
But last year, for example, while some parts of the region, we're still dealing with the pandemic, they have raised, the batch of last year had
raised $3 billion. So funding has definitely gone down. But innovation hasn't.
As a result, we actually see people aiming less entrepreneurs aiming less to create one product or one app to be for everything for everyone
everywhere. And -- instead actually focusing on core products that are local in their markets and that they can develop and grow from there.
CHATTERLEY: Yes, it's fascinating. We know just looking at the numbers, it's fairly evenly split between China, Japan, South Korea and Singapore,
but way out in front is India. What's driving that and just give us a flavor of some of the entrepreneurs that you were seeing there? One -- that
stood out to me loop health, healthcare insurance in India.
WATSON: Yes, that's right. India has been dominating the list for the past few years. It was China to start with. And then as the gadget and consumer
product market have gone down, and now we see more trends into people trying to build more software, India is back on the rise.
And it is, of course, now the most populous country in the world. So it's no surprise, but we do see Indians across all the categories that we have
on the list, doing great things. You mentioned loop health, which is trying to make healthcare, healthcare insurance more accessible to people. We also
have people who are creating ad tech companies, but not the ones that we're used to during the pandemic, where you actually give the lessons online.
They're actually believers in offline learning one to one, but they're using technology as a software as an app to connect students to connect
parents who want to track the progress of their, of their kids. So there's a really interesting way in looking at Tech, not just as an end result, but
actually as a way to make things more convenient.
CHATTERLEY: Yes, and also learning from what the challenges that we saw during the Pandemic and trying to optimize in terms of education is seems
very obvious, but vital that we do this and we do it fast. AI, we have to talk about AI sort of everywhere you look the physical use of it, rather
than just vague references was something else that leapt out at me.
WATSON: Yes, and I was listening to your conversation earlier. AI was featured, 32 out of the 300 pounders on our list are actually using AI as a
big part of their companies. I'll give you examples from Japan for example, one of the companies using AI to analyze images to access quality control
something that has been done manually.
[09:55:00]
So they're really cutting the time by about 95 percent. We also have usage of AI and farming and agriculture, creating software that could analyze
crops and help farmers. There is AI as actually, Harley mentioned, creating product descriptions, which is funny.
You mentioned that because there is a company on the 30 under 30 Asia list in Singapore doing exactly that. It's doing this specific product that
helps companies who are retailers and content creators produce content and better product descriptions using AI. So yes, AI is everywhere. And it's
just the beginning, that's how we see it.
CHATTERLEY: We agree. And I would be very remiss if I didn't mention that our very own Selina Wang was mentioned in this as well. So, congratulations
to her. Rana, great to have you on, thank you so much for the list and joining us to talk about it today, the Special Projects Director at Forbes
Asia there, thank you.
WATSON: Thank you.
CHATTERLEY: And that's it for the show. "Connect the World" is up next and I'll see you tomorrow.
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[10:00:00]
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