Return to Transcripts main page

Quest Means Business

Olympic Ceremony will Go Ahead, Despite Controversy and COVID; W.H.O. Says Truly Global Recovery Rests on Vaccine Equity; Joe Bide Says Inflation will not Get out of Hand. Aired 3-4p ET

Aired July 22, 2021 - 15:00:00   ET

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

[15:00:21]

RICHARD QUEST, CNN HOST: With an hour to go before trading is over, and U.S. markets clawing their way back into the green barely and just -- the

big board shows 72 points, which is impressive, bearing in mind where we have come from.

So, it is an absolute 180-degree different direction from how the day has been. There is a lot more optimism and cheer around the markets as they

look at the final hour, and the main event of this Thursday.

Opening ceremony in Tokyo for the Olympics as officials are suffering more scandals.

Vaccine inequality, holding back the global recovery and that's from the United Nations.

And DiDi shares fall a further 10 percent as China gets even tougher from ties with Wall Street firms.

I'm live in New York. It is Thursday, July 22nd. I'm Richard Quest and I mean business.

And there you see it, 4:00 in the morning in Tokyo. The sun rises within the hour. It is to be a beautiful day. The temperature is hot in the

Chinese capital, I beg your pardon, the Japanese capital. And as you can imagine, the atmosphere will be highly charged as the Olympics get

underway.

That all happens 16 hours from now. I'm overcome, in a sense with excitement about what's happening. The organizers say the opening ceremony

is to go ahead and planned, ringing in a game that has already been postponed 12 months and now being held under the cloud of COVID.

The opening ceremony itself in disarray after the show's director was fired in the last minute for anti-Semitic comments, he made about the holocaust

some 28 years ago. It is the latest of many controversies surrounding the Olympics that will be unlike any other.

Tight COVID restrictions and athletes will parade into just about empty stadia. Rather than the sea of humanity that welcomes them, there will be

just 950 VIP guests on hand for the ceremony.

Selina Wang is in Tokyo. I guess, at this point, we can go backwards and forwards on the problems, but that might be a little churlish since this

thing happens today and there has to be some recognition that the Olympics are about to start.

SELINA WANG, CNN CORRESPONDENT: Richard, it is inevitable. It is just hours away, the officials have not ruled out a last-minute cancellation, but

competitions have already been underway as well. And yes, scandal after scandal for these opening ceremonies, much of the broader public as well as

in corporates in Japan are opposed to these Games including the CEO of Suntory who has skepticism about the Olympics and says, it is not really

worth it to be a sponsor of them.

(BEGIN VIDEOTAPE)

TAKESHI NIINAMI, CEO, SUNTORY: We thought about becoming an Olympic partner because I was a member of the delegate to win the bet, went to the Buenos

Aires together with Prime Minister Abe. I thought about it, but I didn't think my economics didn't match. Too expensive.

So, instead of being a partner, I thought that we should work with the on- premise restaurants and bars together, outside of the big stadium and venues of the Olympics and Paralympics. So, we decided not to go for it.

WANG: What were the plans exactly that Suntory had for these Olympics and what has been scrapped because of this ban on spectators?

NIINAMI: We had a plan to open a couple of bars to promote the brands to spectators visiting from abroad, but we canceled the contracts. And plus,

we were working with the on premise players to promote the brands around the venues of the Games. But we can't make it now, and so the economic

losses will be enormous.

WANG: If spectators were allowed at these Games domestically and internationally, is there a percentage or a number you could put on just

how much of a boost that would be for your business?

[15:05:03]

NIINAMI: I would say, only as far as domestic business is concerned, I would tell you, around 10 to 12 percent. And you know, we could have sold

the premium products carrying the gross margin. So, the sales itself is very important, but operating profits should be a lot, because not only

spectators but also, that excitement that makes a ripple effect to the Japanese consumers, too.

So total excitement creates a huge demand to innovate the products and premium products.

(END VIDEOTAPE)

WANG: Now, the Suntory CEO also said they've of course been damaged by the pandemic and the state of emergency in Tokyo which currently is banning

alcohol from restaurants. And when it comes to the Olympic sponsorship, right now, given all the controversy related to these Games, a lot of the

sponsors are taking the approach of silence -- Richard.

QUEST: All right, but at the end of the day, the Games are starting tonight.

WANG: Yes, they are in fact going ahead. But I think it is important to mention that just the day before the opening ceremony, the director was

booted for mocking the Holocaust; just days before that, the music director also resigning because of interviews that surfaced from the 1990s in which

he talked about the abuse and torment that he did toward his former classmates. And before that, even the previous creative director also

stepping down after making offensive comments to a female Japanese celebrity.

So, these are not the types of moods that you want leading into a ceremony that is all about unity and peace -- Richard.

QUEST: Okay, Selina. Selina Wang in Tokyo. Thank you.

Every Olympics in some shape or form has faced problems, often less, others more. Few have even faced existential crises. For instance in 2016, Rio

declared a public calamity as the Games were staged during a brutal economic recession in Brazil. The venues were barely finished in time,

amidst all that amid a presidential impeachment and an outbreak of zika virus.

The Moscow Games in 1980 will be remembered for the Cold War tensions that boiled over concerning Afghanistan. Many athletes were absent after

President Jimmy Carter urged an international boycott and 55 countries sat out the Games.

Then there is the economics, the citizens of Montreal still fret about their Games in 1976 that nearly bankrupted the city. The Olympic Stadium

there is known as the big owe. Just spell it O-W-E. Billions of dollars of taxpayer's debt took three decades to pay off.

Some say the Olympics have lost their luster for sponsors. There are two distinct views on this. Martin Sorrell, formerly of WBP, now it is S4, and

the Suntory CEO, Takeshi Niinami, who you heard from the earlier part of the program.

(BEGIN VIDEO CLIP)

NIINAMI: I am skeptical that the Olympic Games will bring and attract business partners. More and more, I don't think so.

MARTIN SORRELL, EXECUTIVE CHAIRMAN, S4 CAPITALS: There will be some turbulence, if I can put it that way, around Tokyo, and understandably so

given the pandemic. There will be some turbulence around Beijing as well for other reasons, too. But I think long-term, top sponsors really do get

significant value.

(END VIDEO CLIP)

QUEST: Ed Hula is the editor and founder of the Olympics news site "Around the Rings." He's in Atlanta, which I'm sure you're not that pleased about

to begin with.

ED HULA, EDITOR AND FOUNDER, "AROUND THE RINGS": Well, right. This is nice that they're finally here, but we've been in such anticipation. It has been

a most anxious build-up to these Games. And as we were saying, existential threat that they face from coronavirus. Other Games have had problems and

issues, but nobody has even talked about canceling or postponing the Olympic Games.

QUEST: Okay, so if you accept 100,000 people, many billions of dollars, multi-venues, there are going to be crises. London had security. Athens

wasn't nearly finished in time. Barcelona, they are going -- so let's start from the basis that these are not easy to do and there will be problems.

You say, this was -- no one has had anything like this before. Do you believe it is proper -- it was right and proper to continue or should they

have postponed again, if they could?

HULA: I think that they should have postponed again if they could. I think the most ideal situation was for them to push the Games into 2022.

[15:10:05]

HULA: Another year of delay would probably make things a lot easier to handle as far as COVID, but they have such large financial obligations that

would be very difficult to carry over for another year of postponement, facilities that have been rented and fitted out with technology. Things

that just couldn't sit still for two years.

This is probably their best option, it was to hold it this year with the one-year delay, and it is still causing all kinds of problems and I think

most of all, the Japanese people don't want it.

QUEST: You see that's interesting, because I remember during Rio, I was at the New Year's Eve before down in Rio covering a story and the Brazilians

didn't want it. The Japanese don't want this one for different reasons.

But I wonder -- and the answer is always, once they begin, they'll get caught up. But there is nothing really to get caught up in here, is there?

HULA: That's the problem, because the spectators have been told to stay home and that includes the Japanese, the taxpayers of the country and of

the city who have underwritten the cost of all of these venues, and the other extraordinary expenses that come with the Games.

They've kind of been left out hanging, and the small scale pageantry like it, the course relay or other events, sponsored pavilions around the city,

that's not going to be there.

QUEST: The top medical official has reminded us that there will be breakout infections; that they knew there would be breakout infections. Do you think

that it is incumbent possible us, you, with "Around the Rings," me, QUEST MEANS BUSINESS, it is incumbent for to us grow up a bit and remember, there

are going to be infections, but they planned for it.

HULA: No, they planned for infections? I'm not sure that that is really is case when they had the Olympic (INAUDIBLE) Tokyo, nobody was planning for a

coronavirus pandemic in the final year to the Games, the final months to the Games. It is just a contingency. I don't think that anybody planned

for, which is --

QUEST: No, no. Sorry. What I mean by that -- what I mean, Ed, sorry to clarify, what I mean is that as these Games go through, we will hear this

athlete is out because of COVID or that athlete is out because of COVID. But the organizers are saying we are ready with plans for that -- you know,

over the last 12 months, we have put in place plans for there to be outbreaks amongst athletes.

HULA: I understand now, but yes, they have set up quarantine procedures, protocols to follow in case that happens and we are already seeing

instances of that with the athletes arriving, and because of these protocols, athletes won't be arriving all at once in Tokyo.

Over the next two or three weeks, they will be arriving as their events come. So, it is possible we may get a steady drip, drip, drip, of

coronavirus infections tied to Olympic athletes.

QUEST: I am very glad to have you with us today, Ed. You're a veritable font of knowledge on all of this "Around the Rings" and we'll talk to you

more as we go through. Many thanks, Ed Hula, and look at the sight there in Tokyo at 4:00 a.m. Daylight is actually coming up at 4:40 this morning.

Thanks very much, Ed.

Now, no equal access to vaccines and no truly global recovery. The World Health Organization has calculated the economic impact of the vaccine

inequality. We'll talk about that after the break.

(COMMERCIAL BREAK)

[15:16:46]

QUEST: The W.H.O. says vaccine inequality is threatening to cause lasting economic damage to low and middle income countries. The numbers as it shows

from the U.N. with the U.N. Development Program in Oxford University shows the cost estimating GDP of low income countries could have been $38 billion

higher this year if vaccination rates matched those in the richest nations.

Remember, $38 billion has a disproportionate affect because of the lower base and the amount of money involved. So, $38 billion is as massive amount

for those countries.

The Director General of the W.T.O. told me on Wednesday, the situation is improving fast, but not fast enough.

(BEGIN VIDEO CLIP)

NGOZI OKONJO-IWEALA, DIRECTOR GENERAL, WORLD TRADE ORGANIZATION: The current inequity we see is not acceptable by any stretch of the

imagination. I mean, the good news is 1.1 billion more doses were produced in June, 45 percent higher than May. The bad news is that of this amount,

only 1.4 percent went to Africa and 0.24 percent to low income countries.

(END VIDEO CLIP)

QUEST: Larry Madowo is in Nairobi. We spoke last night. We talk again. This time I want to focus on the economic side of it. Now, we will do the now if

you like, and the future. At the moment, are you seeing examples of businesses closed, people -- the actual effect of the reality that there

are lockdowns and problems in the economy.

LARRY MADOWO, CNN CORRESPONDENT: The signs are everywhere, Richard. So many businesses that just could not afford to operate in an economy that are

closed part of the day. Curfews are still in existence in many parts of the continent. There are businesses like tourism and hospitality that just

could not cannot survive.

I remember, we were in Amboseli National Park here in Kenya close to the border of Tanzania and there were lodges that were completely shut down.

They are ghost towns now, and there are so many instances, millions of jobs that have been lost here. So that is a problem because while the rest of

the world is entering this post pandemic life, there have been stimulus packages, they are starting to reopen again; in Africa, still very firmly

shut in many instances.

QUEST: So, then, the U.N. in this report talks about the future losses. In other words, the longer term effect from the fact that this is going to go

on longer and there is already deep damage. There is isn't the money, there isn't the resources, there isn't -- as I use the economist's term, fiscal

space, to actually mitigate these costs and losses.

MADOWO: Because the best way to do so is to share vaccines as quickly as possible, to remove the barriers to manufacturing capacity here, so that

vaccines can be manufactured as quickly as possible as Pfizer is now doing it in South Africa, and then to share those vaccines to as many people as

possible because, again, the U.N.-DP/W.H.O.-Oxford report warns that if that does not happen, if the vaccination rates are slower in low to middle

income countries, then these countries will not reach pre COVID-19 growth levels until 2024. So, that is a danger.

QUEST: Larry, has it dawned on anybody that nobody is coming to their rescue? Or if they are attempting to come to Africa's rescue, it is too

little too late.

[15:20:10]

MADOWO: I think that message is home by now. There is no recovery coming. Africa is now on its own. The Health Minister here in Nairobi told me about

-- I think, in May that we have learned that there is no Biblical Samaritan -- good Samaritans coming to save us. Africa has got to take care of

itself, and one of the thing that I've heard again and again, is that you know, people say all the time, we're in this together, we are not.

Africa has been waiting for vaccines for so long and yet, of the 3.5 billion vaccines administered worldwide, only 1.7 percent of that came to

Africa.

QUEST: Larry, thank you. I appreciate it.

U.S. markets are shrugging off the latest unemployment data. The Dow was lower for most of the day. It is now trading higher and that is despite

weekly claims for unemployment benefits unexpectedly rising last week. It is a bit of a strange number, the weekly claims. But it is a fresh reminder

that the economic recovery is still fragile, which is strong reasoning for the Fed's decision not to tighten, or at least even talk about tightening -

- tapering on purchases.

Last night, at the CNN Town Hall, President Biden tried to soothe fears over rising inflation.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: The vast majority of the experts including Wall Street are suggesting that it is highly unlikely

that it is going to be long term inflation that is going to get out of hand. There will be near term inflation because everything is now trying to

be picked back up.

(END VIDEO CLIP)

QUEST: Tyler Goodspeed was the chair of the Council of Economic Advisers under President Trump, now a fellow at Stanford University, and we are very

grateful to have you with us, sir. Thank you for taking the time.

Look, I read your views on this issue of wages not keeping pace with inflation, and the difference between real and nominal. And I take that on

board, but the inflation we are seeing as you heard the President say is temporary, and that's the consensus of the Fed, too.

TYLER GOODSPEED, FORMER CHAIR OF THE COUNCIL OF ECONOMIC ADVISERS UNDER PRESIDENT TRUMP: Well, I think that's right in the long run, everything is

transitory. When we look at where prices have really risen in recent months, it has been in things like lumber, it has been in things like used

cars. That is likely to be transitory.

In fact, it is already starting to dissipate, but as those transitory factors begin to dissipate, I think there are few other shoes yet to drop.

Rent is still below pre-pandemic trends. The chip shortage is likely to persist for several months more, and then there are other service sectors

where we still haven't caught up to where we would otherwise be.

So, the question is whether we can observe such elevated levels of inflation for six months, 12 months, 18 months without expectations

starting to reflect that. And I think we have already seen particularly in survey date from the New York Fed that longer range inflation expectations

have indeed begun to pick a little bit. And that's not such a terrible thing, but it does potentially complicate monetary policy down the road.

QUEST: Right. But would you be arguing for the beginning of tapering of QE sooner? We'll probably get an indication of what they are thinking about in

September. But would you be arguing for a beginning, a start of tapering sooner with a view to raising rates at an earlier time? Because there are

only so many levers the Fed has. We'll get on to fiscal in a second.

GOODSPEED: Well, I think when it comes to both fiscal and monetary policy, one should try to adhere to some version of the Hippocratic Oath, "First do

no harm." So, it is a bit of a head scratcher for me that the Federal Reserve is continuing to purchase $40 billion a month in mortgage backed

securities, when the housing market is red hot.

And at the end of the day, I mention rent. The combination of rent and owner's equivalent rent is about 40 percent of core CPI. So, at some point,

those big month over month increases in median home prices are going to pass through the higher owner equivalent rate, and that's as I said, 40

percent of CPI.

QUEST: Dr. Goodspeed, I am guessing that your main truck with all of this is based more on political, in the sense that the administration's current

policy, particularly both on infrastructure spending and on its massive plan on social spending. But also, can't I throw at you, that if the

minimum wage had been increased, that would have A, arguably been the right thing to do. And B, narrowed that wage gap of which you are talking.

[15:25:01]

GOODSPEED: Right, and just to put some perspective on the wage gap that I was referring to, and I have referred to in a number of pieces, thus far in

2021, we keep hearing about big nominal wage gains, but once you account for inflation, it turns out that our average hourly earnings and average

weekly earnings have declined in real terms and are down almost four percent at an annualized rate for the year.

And just looking at June, the total weekly wage bill for the U.S. private sector in real terms declined, which is a very troubling thing when you

look at what is actually happening to real wages.

Look, nothing does more for raising real wages across the income distribution, but in particular, at the lower end of the income

distribution like having a high pressure labor market that prevailed on the eve of the pandemic, so we saw big wage gains in both nominal and real

inflation in November, 2019 and December, 2019 and January, February, 2020.

And I think the risk at the moment is that we're sort of putting the cart ahead of the horse. What the policy should be focused on is getting back to

the sort of, close to maximum employment that prevailed in January and February 2020 where we were seeing three quarters of the flows into

employment where folks come in from out of labor force.

I think the first priority should be getting back to that sort of state of affairs, and then if you want to focus on policies to boost wages, go

ahead. But first focus on getting back to full employment.

QUEST: Good to see you, sir. Thank you for taking the time. Dr. Tyler Goodspeed, have a good weekend.

And we will have more. It is QUEST MEANS BUSINESS after the break.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in just a moment. Live on the streets of Rome, Italy is going to start making

vaccines mandatory for access to bars and restaurants and a Digital Pass to prove it.

And the Chief Executive of Rocco Forte Hotels tells me how he is coping with a dysfunctional start to the summer travel season.

We'll have all of that, ahead after we've had the news headlines of what we should expect. This is CNN and on this network, the news always comes

first.

[15:30:31]

QUEST: The Biden administration has sanctioned Cuba's defense minister and other key officials over the crackdown on recent anti-government protests.

President Biden condemned the mass detentions on what he called the sham trials of those who dared to speak out and says the U.S. will continue to

sanction officials who oppress the Cuban people.

At least 33 people have now died and eight are missing in Central China after the heaviest rainfall on record. Devastating flooding has submerged

entire neighborhoods in one of the country's poorest and most populated areas. The flooding has been described as the worst in 5,000 years.

Dozens of major corporate websites are up and running again after a brief but massive internet disruption. Among those affected were FedEx, Delta

Airlines and Amazon. The outage was linked to a service provided by (INAUDIBLE) Technologies. They said the issue was a technical problem and

not a cyber attack.

(MUSIC PLAYING)

QUEST: Italy is following in the footsteps of France in an effort to slow the spread of coronavirus. As of next month, residents will need a green

pass showing proof of vaccination or a negative COVID test that will allow them access to gyms, movie theaters and more.

Now we told you of a similar method in France. That generated significant controversy. However, it was also highly effective; 4 million people have

signed up for vaccinations since the announcement. John Allen is in Rome.

On the streets, are Italians going along with this idea, that you need a green pass if you're going to engage in these social activities?

JOHN ALLEN, CNN SR. VATICAN ANALYST: Well, Richard, Italians are never completely united about anything. But in the main, they like this better

than the alternative. The alternative was for the government to reimpose restrictions on travel between and among Italy's various (INAUDIBLE).

And that would have happened right on the brink of the traditional Fer a gusto holiday here, the August holidays, when the vast majority of Italians

take their vacations. They've already put down deposits and so on. They've made their plans.

If you tell them you can still take your vacation but you'll face new restrictions when you get there, I suspect most Italians would have gone

with the plan the government has rolled out.

QUEST: Now, John, behind you, I see a cafe that is doing, I would say, good business, not brisk but it's doing good business.

Is it less than you would have expected at this time of year, much less?

ALLEN: Well, no, not entirely. What you can't see is what is happening inside the restaurant. There is a large indoor seating area as well. We

should say that's one of the implications of the green pass requirement.

If you want to sit outside like many Italians do, you're fine without it. If you want to go in, you have to have the green pass.

But if you're asking, has the rise in cases and the new measures announced by the government to combat them, has that caused some fear stopping

Italians from going out?

I would say we have not yet seen that. We have seen some Italians putting on hold any vacation plans that would involve leaving the country. What

they're worried about is there might be a new closure by the time they got back, which would complicate the reentry.

QUEST: John Allen, thank you for joining us. Have a latte and charge me the bill.

Day 4 of post COVID freedom in England comes with warnings of food and labor shortages. In the British retail industry, hundreds of thousands are

forced to self-isolate. This is how it is happening.

They're getting pinged by an app from the National Health Service the government provided health authority. And the app tells them they've been

near someone who tested COVID-19 positive and now they have to isolate for 10 days. More people are testing positive for COVID, too.

[15:35:00]

QUEST: More than a quarter of a million in England for the week ending July the 14th, the highest since January. Anna Stewart is with me and has the

story.

(BEGIN VIDEOTAPE)

ANNA STEWART, CNN CORRESPONDENT: Richard, Monday was so-called Freedom Day here in England and many restrictions of course were also lifted for

Scotland and Wales. This was meant to be a boon for businesses who spent well over a year in and out of lockdowns.

However, many are now facing staff shortages due to the ping-demic. And this all relates to this app, the NHS COVID-19 Test and Trace app. It pings

you if you have been in close proximity to someone who tests positive for COVID-19.

And it advises you to self-isolate for up to 10 days. Now I stress it advises you because actually the app itself isn't legally binding.

However, in the last week, data shows over 600,000 people were pinged by the app in England and Wales. And this is why so many businesses are facing

staff shortages. The cafe around the corner from me had to close for several days.

And we're seeing it most visibly in social media and in newspapers at the supermarkets with empty supermarket shelves. Co-op Liddell, Tesco here

behind me have said this is due to the staff in the shops, in the warehouses, and of course the lorry drivers being pinged by the app.

Here in London, there is a growing sense of despondency. Many people say they either never downloaded the app anyway. Those that did have told us

they might delete it or they have deleted it.

Some said, even if they had it, they might not heed its advice.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: A lot of it is voluntary. So even if you get the notice to isolate, it is almost voluntary. I mean, it's not like they're

going to recheck on you after they ping you.

UNIDENTIFIED MALE: I don't see it being effective, to be honest. Because even when people do get messages, people don't -- they don't isolate

anyway.

UNIDENTIFIED MALE: I know people who do abide by it. But apart from that, I don't see why -- I mean, if you don't want to, you don't have to, really, I

guess.

(END VIDEO CLIP)

STEWART: The government does plan to replace contact self-isolation with testing for those who are fully vaccinated but not until the second half of

August. Now some business associations would like to see that brought forward. All but some sectors like retail or meat processing to be exempt.

Nearly 70 percent of the U.K.'s adult population have now been vaccinated but COVID cases are high and they're rising rapidly. And those pings keep

on coming -- Richard.

(END VIDEOTAPE)

QUEST: Anna Stewart in London.

Italy's plan to expand its so-called green pass that we talked about a moment ago presents a new challenge to hotels and other businesses that

have been reopening in recent months.

Hotels like the luxury brand Rocco Forte, which has now been in all of its locations in Europe, operating in hotels across Italy, the U.K., Germany

and Belgium, founded by the hotelier Sir Rocco Forte after his family's iconic properties were taken over by Granada Hotels in the 1990s.

Rocco Forte Hotels are now found in five countries and they're opening a new location in Shanghai. I am delighted that Sir Rocco Forte, chairman of

the Rocco Forte Hotels, joins us from (INAUDIBLE).

I've been an admirer of your hotels and of your new business for many years in the way you run the true definition of hospitality.

But at the moment, it is extremely difficult. Isn't it?

To know whether governments have got it right to reopen or how much of a risk is being taken, where do you stand?

SIR ROCCO FORTE, ROCCO FORTE HOTELS: Well, the uncertainty is the other way around. You can't run a business with the uncertainty that's going on at

the moment. It has been disastrous for my industry.

My last financial year, my turnover was 20 percent of the normal year. It is not just my industry; it's the airlines, it's the entertainment

industry; children can't go to school, parents can't to go work because their children are not in school. It is a complete and utter disaster.

And governments have been single-minded in looking at it in one way. And they've ignored everything else. They've ignored the economy, they've

ignored the other health aspects, outcomes that have occurred as a result.

All they worry about is this disease, which is not the worst disease that has ever hit the world. It is nothing like the bubonic plague and your

chances of dying from it, even if you catch it, are very small indeed.

QUEST: The view of the government has been, time and again, lives versus livelihoods, which is the argument that they put forward, that we have to

deal with the disease first. And whether one agrees with that or not, we are where we are.

But what can you do now?

What can you do now?

[15:40:00]

(CROSSTALK)

FORTE: What is the point of vaccines?

Why have we all been vaccinated and been encouraged to be vaccinated if it makes no difference, if you can't carry on and go back to normal life?

That's what is happening at the moment. The fact that a majority of the population -- and certainly, all the vulnerable people have been vaccinated

-- and yet we're continuing exactly as before. It is absolutely unbelievable. And it's not just -- it is the British government, of course.

And Britain is one of the countries that's most advanced with vaccinations, as is the United States. And they can't produce a pot of gold (ph) between

them to allow Americans to come to the U.K. and U.K. citizens to go to the United States.

Italy, where I am at the moment -- I'm in Rome, actually. My (INAUDIBLE) in Rome, my new hotel there. In Italy, they've opened up the borders to the

American market. And Americans are beginning to come here again, which is quite a relief.

I was in Florence just recently for an event called Duco (ph), which is organized by a Brazilian lady, Carolina Perez (ph), who is showcasing

Italian luxury hotels to the outside world. And there is a huge number of American travel agents there, which was a welcome -- a very welcome sight

to me and other hoteliers in Europe.

QUEST: So what were you doing?

You have got your hotels reopened. And one imagines that business, well, it will be better this year than last. But whether one ever makes any money is

-- I'm guessing you've had to put expansion, that sort of -- a dream that won't happen anytime soon.

So how will you come out of pandemic?

And what will you do next in terms of growth?

FORTE: Well, we just opened a hotel in Palermo, which is the most iconic hotel in Europe, built in the early 20th century. And actually it is very

full and there's huge demand for it. And it is starting to work well already.

(INAUDIBLE) more heavily indebted than I was before and obviously that will affect the base of expansion programs unless I am able to refinance in a

different way.

Luckily, I've had the wherewithal to be able to survive all the money that's gone out the window. And when things get back to normal, which I

hope will be soon, get on with running my business in a normal way.

QUEST: Sir Rocco, thank you for joining us. We'll check in with you again, sir, as the summer moves on, if we may, so we find out how things are going

because it is very good to hear. We're grateful for your time.

(CROSSTALK)

FORTE: Yes, thank you very much for inviting me and for your very kind remarks at the beginning.

QUEST: You're kind, sir, thank you.

FORTE: And I am an admirer of yours, too.

QUEST: That's a good time for us to both go our different ways, sir. Thank you. Good to talk to you tonight.

A sight to behold in a place you wouldn't expect.

What lies beneath the surface of New York City's waters?

(INAUDIBLE) coming on here and I'm looking forward (INAUDIBLE).

(MUSIC PLAYING)

(COMMERCIAL BREAK)

[15:45:00]

(MUSIC PLAYING)

QUEST: It is glorious to look at, New York City, a live picture this afternoon, very hot and humid but America's great metropolis. Now it is

gorgeous to look at and wonderful to visit but it's not the sort of place you might expect to find some of the world's largest mammals in the world.

Look at those waters. Beneath them lie unexpected creatures. In today's "Call to Earth," CNN's initiative to promote a more sustainable future, we

follow those protecting wildlife where you would least expect it.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: New York's waterways may be best known for skyline views and crowded shipping lanes. Yet these busy waters also harbor a rich

community of marine mammals.

Local whale species include the iconic humpback, fin whales and the endangered North Atlantic right whale. These photographs captured thanks to

a multi-year aerial survey, conducted by Tetra Tech and the New York State Department of Environmental Conservation.

HOWARD ROSENBAUM, SCIENTIST, WILDLIFE CONSERVATION SOCIETY: Right off of our shores, you know, in less than the average distance that a New Yorker

or someone from the tri-state area would commute, these great whales are here.

UNIDENTIFIED FEMALE: Wildlife Conservation Society scientist Howard Rosenbaum studies the whale population here in the New York Bight, the area

between Long Island and the New Jersey coast island. His mission, to use the latest research methods to protect the whales.

ROSENBAUM: This is one of the busiest urban waterways on the planet. And they face threats such as, you know, impact from shipping which could

include ship strikes or ocean noise, incidental entanglement in fishing gear.

These areas in the New York Bight, along the East Coast, you know, under this administration, are slated for extensive renewable energy development

which the planet needs.

We just want to make sure that it is done with the best environmental and management practices possible, so that wildlife and renewable energy can

coexist.

UNIDENTIFIED FEMALE: In partnership with Norwegian company Equinor, which has a major offshore wind project in New York and the Woods Hole

Oceanographic Institute, the WCS has deployed two acoustic buoys to detect whale calls in real time.

ROSENBAUM: If you can imagine, when a whale vocalizes in the New York Bight, like for example a North Atlantic right whale, we can actually

detect those animals.

I can get an alert on my cell phone. And when that happens, at a certain level right now, the National Oceanic, Atmospheric Administration is

requesting ships to slow down.

UNIDENTIFIED FEMALE: In the future, Rosenbaum says this alert system could be used to mandate boat slowdowns or to directly alert developers and

shippers to the presence of whales so that they can pause noisy or potentially harmful activity.

ROSENBAUM: It's a great tool and a great use of the technology that we can begin to use and harness the power of that to help better protect whales.

UNIDENTIFIED FEMALE: Rosenbaum's team also takes and analyzes genetic samples from the whales in order to understand more about how this

population connects to others like how they feed and breed.

[15:50:00]

ROSENBAUM: We're also trying some new work which is called environmental DNA or eDNA. And with that we're actually able to detect whale presence and

what they are eating, just by collecting a water sample.

UNIDENTIFIED FEMALE: By combining information from genetic and acoustic research the scientists aim to understand a lot more about the whales and

their behavior to find practical solutions to the challenges facing these New York ocean giants.

(END VIDEOTAPE)

QUEST: Gosh, all that is going on just a couple of miles from where I'm sitting now.

Who knew?

We'll continue to showcase inspirational and environmental stories like this as part of our initiative at CNN. And you're part of it. #CallToEarth

to tell me what you're doing.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: More woes for DiDi, shares of the Chinese ride hailing company are set to close at about 10 percent lower. Bloomberg is reporting that China

is planning unprecedented penalties against the company.

It's been in Beijing's crosshairs ever since it went public in New York last month. The IPO, before the IPO, 2021, was shaping up to be a huge

year. The Chinese listings in the U.S. Now as Clare Sebastian tells us, expectations are dramatically changing.

(BEGIN VIDEOTAPE)

CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): In the spring of 2019, China's answer to Starbucks opened trading in New York, Luckin Coffee

promising to convert millions of Chinese tea lovers with low prices and high-tech convenience.

RYAN COHEN, U.S. INVESTOR: It was just so attractive because on per sor (ph) basis, its market capital was very low.

SEBASTIAN (voice-over): Then 23-year-old Ryan Cohen, a finance professional in Ohio, was sold.

COHEN: I saw it as the opportunity to get in early on a very fast growing company. And China, for me, has always been sort of a, like a, an untapped

frontier.

SEBASTIAN: For years, American investors have flocked to Chinese companies listing in the U.S. as an easy way to own a piece of China's fast-growing

consumer market. And for years, China has resisted complying with the requirement of public companies here that the U.S. be allowed to inspect

the accounting firms that (INAUDIBLE) these companies.

SEN. JOHN KENNEDY (R-LA): Everybody has to comply with that rule. American companies, British companies, Malaysian companies.

[15:55:00]

KENNEDY: Turkmenistan companies except one, Chinese companies. They just say no.

SEBASTIAN (voice-over): Compliance with that rule may not have prevented what happened next with Luckin Coffee.

SEBASTIAN: It turned out that the company had fabricated sales to the tune of about $310 million.

SEBASTIAN (voice-over): An accounting scandal that eventually led to its delisting, a bankruptcy filing and big losses for U.S. investors, like Ryan

Cohen.

COHEN: Luckin really came to the market, got a bunch of capital from its IPO and then just sort of left. And it left a lot of American investors

like holding the bag.

KENNEDY: Now I have a bill. It's very simple.

SEBASTIAN (voice-over): It did though help spur action in Congress. Last December, then president Trump signed the Holding Foreign Companies

Accountable Act, forcing companies from countries which wouldn't allowed audit inspections for three consecutive years to be delisted.

Right now China is the only one. The SEC is still figuring out how to enforce the law.

DANIEL GOELZER, PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD: It has always been clear that the situation of unexpected auditors in one country just

couldn't go on.

SEBASTIAN (voice-over): And if the U.S. regulators don't deter Chinese listings, Chinese regulators might. Two days after Chinese's ride-hailing

giant DiDi went public, it was hit with a cybersecurity review in China. Then it was kicked off app stores.

PAUL TRIOLO, EURASIA GROUP: They're handling huge amounts of data that is increasingly being considered sensitive by the Chinese government.

SEBASTIAN (voice-over): China has now proposed requiring all large tech companies that want to list overseas to undergo a cybersecurity review. And

all of this complicated by tensions between the U.S. and China.

TRIOLO: DiDi, the recent events here have sort of given ammunition to those really in Congress, for example, the China hawks in Congress, who really

want to accelerate this process and they're saying, this is not good for U.S. investors.

But if it looks like the relationship is sort of going further south, then I would say that the Chinese government may decide that, hey, why should we

agree to auditing of our companies?

SEBASTIAN (voice-over): It is clear after years of a fragile but mutually beneficial status quo, something has to give. And investors could be caught

in the middle -- Clare Sebastian, CNN, New York.

(END VIDEOTAPE)

QUEST: And we'll have a profitable moment after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: Tonight's "Profitable Moment" about Tokyo and the Olympics. It is time for us to celebrate the sport that is going to take place. And by

that, of course, there will be issues of COVID-19. There will be infections, there will be problems, there will be sponsors who are not

pleased, this, that and the other.

Get over it, at least for the next two weeks.

Can we please try and remember, it is a sporting occasion, that, for better or worse, it is now underway? And providing, God forbid anything goes wrong

dramatically, at least we can look forward to achievements of the men and women who have worked so hard.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.

END