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Quest Means Business

Nearly Five Million Ukrainians Have Fled Their Homes; Sanctions Squeeze Russia, Companies May Face Consequences; U.S., Chinese Officials Meet In Rome To Discuss War, Lockdown In Shenzen As China Tackles COVID Outbreak; Other Issues; Chinese Stocks Sink Amid Renewed COVID Fears. Aired 4-5p ET

Aired March 14, 2022 - 16:00   ET



RICHARD QUEST, CNN BUSINESS ANCHOR: Closing down on Wall Street ringing. The market just about unchanged on the day, early gains have sort of

petered away. And now, we are just -- you can see, it's just about zero, zero, zero on the day, but under 33,000.

The markets today and the main events.

Russia is threatening to retaliate. Its ruling party is proposing criminal penalties for companies that are complying with Western sanctions.

China could be considering aid to Russia. Western sources say Beijing is open to providing military or financial assistance.

Stay with China and it is imposing a COVID lockdown on a key center for global manufacturing.

It is going to be a very busy hour.

We are live in New York. It is four o'clock now. It's Monday, March the 14th. I'm Richard Quest and I mean business.

Good evening.

Tonight, Russia is expanding its attacks throughout Ukraine, and now is battering neighborhoods and putting more civilians at risk. U.N. says

nearly five million Ukrainians have fled the country or otherwise have left their homes.

Ukrainian officials say shelling on this apartment building in Kyiv killed one person and six were injured. And the Deputy Prime Minister of Ukraine

says Russian shelling is preventing humanitarian aid from reaching the devastated city of Mariupol. Negotiations between Russia and Ukraine have

taken a technical pause and will resume tomorrow. That's Tuesday. U.N. Secretary General said it's never too late to give up on diplomacy.


ANTONIO GUTERRES, U.N. SECRETARY GENERAL: The appeals for peace must be heard. This tragedy must stop.

It's never too late for diplomacy and dialogue. We need an immediate cessation of hostilities and serious negotiations based on the principles

of U.N. Charter and International Law.

We need peace, peace for the people of Ukraine. Peace for the world. We need peace now.


QUEST: Now, get to the actual fighting in just a moment in the current situation in the physical war, if you like, but of course, as you and I

have discussed many times, there is an economic war that is underway and being waged and the effects are growing.

The I.M.F. says Russia may default on its debt, and that could happen as soon as midweek when Russia needs to make $117 million interest payment on

government bonds.

The ruling party in Russia is considering a law that would hold companies criminally liable for abiding by Western sanctions. The head of the party

says even indirect support should qualify as treason.

And China are now in the fray with Moscow said to have requested military and economic support from Beijing and that could potentially alter the

scope of Xi Jinping's influence on the crisis. China is denying or at least not confirming this.

Rana is with me, Rana Foroohar in New York.

You and I have talked elsewhere that there is an economic weapon being deployed by the West, but now we're starting to see that pickup speed. So

let's talk about for instance, the potential for default by Russia.

Russia says it will probably pay the bonds but in rubles, lest there be any confusion in that. That could be of course a breach of the covenants of it.

But the situation deteriorates.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Absolutely. And Richard, one of the things that has worried me even though sanctions are totally

necessary, I think pulling Russia out of the SWIFT system was necessary. It backs Putin into a corner, he has very little left to lose.

I think a lot is going to depend on how much aid, how much behind the scenes support there is from China. But what we are seeing and you alluded

to this earlier, is really a pivot point in globalization. This is de- globalization. This is a bipolar world. The West is on one side, China is on another, Russia is in flux by a Ukraine and I think it's going to be

bad, and it's going to take a while to sort out.

QUEST: Right. But you say that it is a bipolar world, but the reality is within that bipolar world, until now, China has certainly wanted to play in

the West's playground, i.e. the capitalist markets where it sold products into it, and has become quite as a capitalist in itself. Same with Russia.

So can these countries thrive if they no longer play in -- putting it crudely -- our playground?


FOROOHAR: Great question. I would actually take a little bit of an issue with China becoming quasi capitalism; and yes, in some ways, but in in

recent years, they've actually become more statist. You've seen Xi Jinping's government really becoming much more top down, much more directed

by the state. So that's a big pivot point.

But I agree with you, I think that China is realizing that some of the trends it would have liked to have seen a little bit of a challenge to the

dollar, a little bit of a challenge to America's economic power are happening too quickly.

The whole system is unraveling too fast and they have a lot more to lose by breaking relations with Europe and the U.S. than with being in tight with


QUEST: So I know, everyone is saying things will never be the same again. And certainly in the immediate to midterm future. Geopolitically,

philosophically, economically, all of these things, we are not going back to where we were.

Is the West -- are our economies well-positioned, if not exactly robust, to withstand what's coming our way?

FOROOHAR: Another terrific question, I would say we're in better shape in some ways than China in the sense the dollar is still the global reserve.

The U.S. and the E.U. have actually come together and strengthened their alliances, which is, something that you can't overstate the impact of that.

On the other hand, it's going to be tricky to rebuild supply chains, to rebuild the industrial commons. I mean, just the chip factory that's going

up in Ohio, that's going to take a decade. This stuff doesn't happen overnight.

So look for inflation. Look for surprises in the financial system as the unraveling causes all kinds of ping pong effects about who gets paid and

who doesn't. It's going to be very bumpy.

If the world was flat in the 90s, it is bumpy now.

QUEST: Rana, I'm grateful. We will call on you many times between now and then, as they say, thank you.

Rana is talking about the supply chain and the issues that are taking place. It shows us that the war in Ukraine is throwing sand into the gears

of the global economic engine. One that is supposedly becoming more integrated, at least until the pandemic and now things really starting to


Russia, one of the world's largest emerging markets now with the sanctions and verge of default. The spillover is causing energy prices to surge. They

may have eased, but the precariousness of that position is obvious.

And disruption to supply chains struggling from the pandemic. China has now locked down Shenzhen, its tech hub, because of COVID spikes and, for

instance, Apple's supplier Foxconn suspended its operations there.

There is another warning sign. This is the yield curve. The spread closely watched, between the two-year and the 10-year Treasury is flattening. Now,

if it inverts, then we're talking about a potential recession.

It's not the absolute arbiter of that, but it is a good barometer.

Ken Fisher is with me. Ken Fisher is the founder and executive chairman of Fisher Investments joins me now.

Ken, we've talked before. I'm just looking to quote you. Just the day before the sort of the Ukraine war got underway, you said, talking about

general economics, "The bull market is alive, it will bounce back."

Now there is this new factor, what's happening, the breakup of certain supply lines, the greater disruption from Russia, which won't be rejoining

us anytime soon. Not exactly holding to that view, now do you adapt it?

KEN FISHER, FOUNDER AND EXECUTIVE CHAIRMAN, FISHER INVESTMENTS: I think when you stop and think about it, what I would have said before, I'll say

now. This is a correction not a bear market.

War scare is a classic correction format. The only correction format of that that has been unusual is not getting a pure V-shaped pattern, but the

reality is, we've had a lot of war corrections before and they don't always have smooth symmetry.

This correction so far, has been almost to the day today from the peak for the S&P 500 to the exact speed rate of decline and duration of the median

bear mark -- correction, excuse me, since 1928. It's almost archetypal in that way.

I think these are all real features. They're all bad features, but whether you consider the Korean War, the Six-Day, Hezbollah, you can go through so

many regional wars, they've typically associated with corrections. The only war that has actually ever gone to bear market was in times when we've had

accurate stock market data was World War Two which is fully global and I don't think this war goes fully global.


QUEST: Right. But does it concern you, the new wrinkle, if you like is the increased sanctions at the same time as a country that was integrated, to a

large extent, Russia and Ukraine, who knows?

I mean, and by the way, my questions are, of course, absent an exogenous event that sends it all in a completely different direction. I'm talking

about if things continue as they are.

FISHER: So, I am less of a believer in the sanctity of sanctions than most people. I believe economic realities of black market and countries ready to

trade with pariah countries is stronger than most people normally think.

I can't find an example where sanctions have actually deterred a despot from being despotic and continuing the way they've been, whether it was

Fidel Castro or Kim Jong-un or this one, as you say, creates more dislocations and that's a bad, that's for sure bad.

But the fact of the matter is, I seriously doubt this alters anything that Putin wants to do, and I never thought Putin was as stupid as he appears to

be because this is not actually going very well for him.

QUEST: Okay. Now, if we look at just straightforward investments and markets and the way things are. Now, we look at prices, they've come down

dramatically, 60 percent, 70 percent for some good quality companies that you and I could argue were overpriced at the top. There comes a point, when

you say, at these prices, they are worth nibbling, but is it worth nibbling now?

FISHER: Well, again, this is a correction, it is actually not as big yet as it might get. Some corrections get up to 20 percent. This is one big

scary story augmented by a few others. It has got that classic part of a correction where people want to extrapolate off to things like what happens

if China invades Taiwan? And what happens if Iran goes in the Middle East?

The fact is, all that kind of extrapolation is bullish longer term; but in the short term, the market can go lower, and it may well. Corrections are

not predictable in those ways. Anybody that thinks they can time them is fooling themselves.

But corrections have always been rewarding with patience. So nibbling well, stock by stock, time by time, sure. When we look down the road, this will

have been a rewarding time. It's just painful and annoying right now.

If you're looking for comfort, the stock market is a very expensive place to look for it.

QUEST: And I think, I'm trying to sort of distill you basically down to a sentence or five, which is that in five years' time, things should be

considerably better than they look now in terms of investment returns.

FISHER: Corrections lead to new all-time highs. We've had 59 of them since S&P data began well in 1925. The fact of the matter is, this creates the

next, if you will, sentiment base --

QUEST: Even though it's from a war, Ken, even though it's from a war?

FISHER: We have got to --

QUEST: Go ahead.

FISHER: Richard, you're the best, and the fact of the matter is, you still know, but we don't think about we've had a lot of regional wars. As long as

this war doesn't go global, yes.

QUEST: Good to talk to you, Ken. Please come back. We'll need your help as we move forward on this. Very grateful.

FISHER: Thank you so much. You're the best.

QUEST: Ken Fisher from Fisher Investments.

Now, the President of Ukraine is calling on the U.S. to slap more sanctions on Russia, deepen, if you will, the economic war. President Zelenskyy

requested the new measures in a telephone call with President Biden. We'll talk about that aspect in just a moment.




QUEST: Welcome back.

I promised you an update on the situation -- the military situation on the ground at the moment. Sam Kiley joins me. He's in Kyiv tonight.

Sam, the situation, as I have been reading about it from afar, the Russian forces are shelling the outskirts and occasionally, parts of Kyiv itself

and they are not that far away. But how close and how does it feel?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Richard, I mean, the analysis coming from Western intelligence sources, notably British

Ministry of Defense and the Pentagon is that you remember that convoy that was parked and stuck effectively north of Kyiv, which represented the

logistics tale of this Russian thrust towards the capital from Belarus, so that is being dispersed.

It's been dispersed, I think for its own good and safety, but also the analysis is that there will be increasing pressure coming from the east of

the city. In other words, an attempt which is now underway to open up another front in the east of the city perhaps with the aim of trying to cut

that off from the rest of the country and then close the southern axis, which is the main route by which supplies are coming in and people are

getting out. That is a crucial artery for the capital city.

But we're also seeing there these latest strikes against civilian areas, there were two killed in this apartment block that was struck this morning;

in the west of the city, the Antonov aircraft factory was also hit, and when we were out in the west, there was another missile strike, in this

case a ballistic missile, we believe that was shot down by anti-missile missiles, but it still detonated in a civilian area, and massively doing

quite a lot of damage, but not killing anybody. There were a few injuries - - Richard.

QUEST: Sam, the President -- President Zelenskyy is asking for more sanctions. Now, that is the element if you like, of the economic war. It is

perhaps, besides the supplying of weapons to Ukraine, it is the main weapon being deployed.

And obviously, from your vantage point, it is difficult to gauge the success of them in Russia. But from your knowledge of the situation, it

doesn't seem likely that Putin is going to give in because of sanctions.

KILEY: I think they've been very heavily conditioned, the Russians, to endure sanctions. They already had a level of sanctions that were imposed

after their illegal occupation of the Crimean Peninsula and their support for the Russian-backed rebels in the 2014 war of which this, in a sense

from the Russian perspective, is a continuation.

But these sanctions that have come from the United States especially are of a completely different order. I think where the screws will really be felt

if they get tightened is as Europe if, as promised it tries to reduce the amount of Russian natural gas that it imports, that it gets itself weaned

off the supplies of Russian oil. That's easy for the United States; it would be much, much harder for Europe to do and that is a massive market

for the Russians.

If they start suffering there, then they really are not going to be able to keep what does seem to be a bit of a faltering military campaign going at

all. I think that is really where the sanctions are likely to bite with trying to hit the Russians in their fossil fuels as it were -- Richard.

QUEST: Sam Kiley who is in Kyiv. Sam, I am grateful to have you with us tonight. Thank you, sir.


Stay with this idea of the economic damage. In Ukraine, its top steel makers says one of its plants was hit by heavy shelling on Sunday since the

Russian invasion began. Thousands of Metinvest workers and their families have been forced to take shelter.

So look at where they are. The company has mining and plants in Ukraine, Europe, in the U.S., as well as a global sales network. The CEO is Yuriy

Ryzhenkov and he was busy this weekend overseeing a convoy of humanitarian aid headed for the besieged city of Mariupol where they have facilities.

The chief executive joins me now.

Sir, first of all, let's get our priorities. I hope you and your family and your staff, which in a sense is your wider family, I hope they are well, in

the sense of at least have not been injured.

YURIY RYZHENKOV, CEO, METINVEST: Well, good afternoon. Well, fortunately, yes, my family is okay given the circumstances, but I can't say about the

staff of our larger company. As you rightly said, Metinvest employed almost 40,000 people in the city of Mariupol, which has been cut off from the rest

of Ukraine now for more than two weeks and being bombarded basically every 30 minutes in the last two or three days. People literally are living in

bomb shelters and they are unable to get out of the city.

We've been trying -- as you rightly said, we've been trying to get the humanitarian aid, the humanitarian convoy and also the buses to evacuate as

many people of the city as possible, but unfortunately, last seven days that the Russian Armed Forces were not allowing us to get into the city.

QUEST: And the other resources, plants, facilities that you have in Ukraine, have you shut them all down now?

RYZHENKOV: Well, our first priority is the safety of our people and the safety of the people around the plants. Our plants are -- they do operate

with hazardous materials. They can emit hazardous materials if they're hit by the bombs when they are operating. So whenever the fighting comes

closer, we are idling them.

For now, we idled our plant in well, obviously the Mariupol plants have been idled some time ago now. And we idled a plant in Zaporizhzhia. Our

plant in Komsomolskoye is still operating and our mining facilities in Krygorok (ph) operating about 30% of their capacity.

QUEST: I mean, what's your -- forgive me, this is going to sound a foolish question when I say, sort of what's your plan? But I realize that your plan

gets made up according to what is being bombed and where the Russians are and what happens next.

But at some point, if it looks like Russia is -- the invasion is going to succeed and Russia is going to take over Ukraine, what will you do?

RYZHENKOV: Well, just as mostly Ukrainians, so even probably all Ukrainians, we believe we can still stop that scenario from happening and

the company, the shareholders, they are united to take every step necessary to prevent such events from happening.

At the moment, we're focusing on the humanitarian aid. We established a logistical network together with Rinat Akhmetov Humanitarian Fund and we

set up a hub in Poland where we are accumulating all the necessary humanitarian aid and then it's being shipped to Zaporizhzhia and then

distributed to people in the cities where we operate.

We already distributed 80,000 tons of -- sorry, 80 tons of humanitarian aid, and in parallel, the company the company also is involved in helping

to territorial forces and the army. So we're making some anti-tank facilities, we're putting concrete blocks to build the defense facilities.

We're buying the bulletproof vests and helmets and importing them into Ukraine to give it to Territorial Forces. So we're trying to help as much

as possible to both our army, to our country, and to our people.

QUEST: What's your intention in the sense that we've seen the stories that local mayors are being kidnapped by Russians as and when they get them? Now

obviously, as the chief executive of an extremely important part of the Ukrainian economy, your own personal safety, whilst I appreciate, sir, you

want to stay with yourself staff and you want to stay with your people, I appreciate that, sir.

But at some point there will come a moment where you will have to decide is it more harm than good for you to stay?


RYZHENKOV: Well, at the moment, we're all staying here in Kyiv, side by side with our President, the government, and our fighters, so that's the

way it is right now.

QUEST: Sir, we're with you and we are following closely, and as soon as we can, obviously we'll keep in touch and we'll hear more about what you're

doing. I'm grateful you've talked to us tonight, sir. Thank you.

RYZHENKOV: Thank you very much. Thank you.

QUEST: Tonight, U.S. and Chinese officials are meeting in Rome today. The war in Ukraine is on the table, as is the possibility China might provide

Russia with military and financial aid.

Those details in just a moment.


QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in just a moment.

A COVID shutdown in Shenzhen threatens gum up global supply chains when they can least afford it, and Alibaba, Tencent, TD, Chinese stocks have

dropped like a stone. I'll explain what is one of the biggest falls since the 2008 crisis, we will talk about that.

It's all after I've given you the headlines.

This is CNN and here, the news comes first.

Almost all of the Russian advances in Ukraine remain stalled according to a senior U.S. Defense official on Monday. According to the same official,

Russian forces moving on Kyiv did not make noticeable progress over the weekend.

The U.N. says now, nearly three million people have fled Ukraine for neighboring countries. More than half the refugees have crossed the border

into Poland.

The Pfizer Chief Executive says people will need a fourth dose of his company's vaccine to fend off another wave of COVID-19. Speaking on CBS,

Albert Bourla says Pfizer should have data next month from trials for children under five years old.


Now to the question of how all those refugees are being moved to Ukraine to Poland and elsewhere. And throughout it all, the railway system in Ukraine

continues to be a reliable lifeline for its people. It's an extraordinary story. CNN's Scott McLean now meets the operators who keep the system

running in unprecedented circumstances.


SCOTT MCLEAN, CNN INTERNATIONAL CORRESPONDENT (voice over): First light in Ternopil, Ukraine is the rising sun. The city's lights have been kept off

since the war began, more than two weeks that have exhausted, overwhelmed and completely upended normal life. But through it all, Ukraine's rail

network has kept running.

Every morning, railways executives led by 37-year-old Oleksander Kamyshin gather for a morning call.

No cell phones, no Zoom, just a Soviet era closed circuit phone system that connects every station. It won't stay here long. They can't. They believe

they're a prime Russian target.

OLEKSANDER KAMYSHIN, UKRAINIAN RAILWAY CEO: This threatens us to move fast so that they don't catch it.

MCLEAN: How long can you stay in one place?


MCLEAN: Instead, their work managing 231,000 employees continues on a single car train headed west for now. Often their work is aboard ordinary

passenger trains to blend in with the masses. Since the war began, they've been in near constant motion, crisscrossing the country to keep the

Russians guessing. The decision to leave their headquarters in Kiev was made in the early morning hours of February 24th.

Kamyshin snapped one last picture with his two young kids. One still asleep.

Are they still in Ukraine? How does that make you feel?

KAMYSHIN: For me, it's easier when they know that they're safe. And I have time to do my job.

MCLEAN: The country's rail network one of the largest in the world has been a lifeline in war, moving desperately needed supplies in and desperate

people out of danger. More than two million since the invasion began.

Schedules are drawn up the night before and changed in response to panic scenes like this one in Kharkiv or in Lviv in the early days of war.

How on earth have people still been able to use the trains in a war zone?

KAMYSHIN: That's something which is surprising for the whole country and for the president as well.

MCLEAN: Surprising because every day the network is hit by Russian bombs. Small damage breaks the link between cities temporarily down to bridge

indefinitely. Near Kharkiv an undetonated. bomb fell right next to the tracks.

ROMAN CHERNETSKYI, UKRAINIAN RAILWAY DIRECTOR OF INFRASTRUCTURE AND SPECIAL PROJECTS (through translator): We are reacting and repairing a railway even

under artillery shelling every day. Unfortunately, some of my colleagues have been killed and injured during shelling.

MCLEAN: Thirty-three killed, 24 injured and counting.

(on camera): The difficulty working aboard a moving train is that the cellphone signal is not always great. Now they do have Starlink internet

systems now courtesy of Elon Musk but they barely ever turn them on because they say it makes it easier for the Russians to target their location.

(voice over): The Russians have taken control of rail links in cities like besieged Mariupol, Sumy, Kherson and Chernihiv. But for now, all of the

major hubs are still connected by Ukrainian rail. How bad would it be if the Russians took these major stations?

KAMYSHIN: Really bad. Don't ask them how bad but really bad.

MCLEAN: When the train reaches Lviv, Kamyshin makes a quick visit to the main station. And more calls and meetings and a message for the rest of the


KAMYSHIN: What we can do we already do. What West can do, close the sky and all the rest will do ourselves.

MCLEAN: Scott McLean, CNN, in Western Ukraine.


QUEST: Extraordinary story. We'll have more in just a moment.



QUEST: QUEST MEANS BUSINESS. Good evening. U.S. diplomat is telling us that China seemed open to providing Russia with military financial help, but

it's not yet clear if it will. It follows a meeting in Rome which in the U.S. National Security Adviser Jake Sullivan and China's top diplomat Yang

Jiechi. The U.S. is warning China potential negative outcomes of aiding Russia according to the U.S. official telling us.

China is also dealing with its worst COVID outbreak in two years. The Apple supplier Foxconn has halted operations in Shenzhen, it was a key tech hub

which is now under lockdown. David Culver is with us from Shanghai. Give me a feeling an idea now Shenzhen, the lockdown and what the ramifications

will be.

DAVID CULVER, CNN INTERNATIONAL CORRESPONDENT: And it's soft lockdown, Richard, here in Shanghai, the financial hub. So, if you look at how China

handles these lock downs, and we've been covering now for more than two years, they're far different from how the West handles it. There tend to be

total closing up society, if you will. A lot of folks are locked inside of their homes and compounds. They then can't go to work.

So, in an area like Shenzhen where you have in the wider region of that city, 17-plus million people, many of whom are involved in the tech sector.

You're going to have major implications on factories and a lot of the businesses there that ultimately feed the West. Now if you go north, for

example, to Jilin, a province of tens of millions of well that likewise is in a hard lockdown. It's an industrial hub, Richard.

So, a lot of the factories up there are come to -- a close at this point. So, this is going to have ramifications well beyond what they're dealing

with domestically here but perhaps even internationally.

QUEST: David, lots to talk about. I just want the question -- I just always want to ask you when this lockdown question. Why are they doing it? I mean,

have they not seen that the rest of us, yes, we had our lockdowns and we got - -and we got our vaccines and de facto life is back to normal.

CULVER: They're doing it, Richard, for a couple of reasons. One is, they genuinely believe that their way is effective, which has been extreme and

harsh lockdowns at times. They believe that is the way to keep COVID out at this point, especially considering their vaccines have fallen short in that

and that and they point out that Western vaccines have fallen short, though they lessen the severity of this illness.

And the other reason they do it is because for now, and I stress for now, because I think we're at a breaking point in this. It's been socially

accepted. People here are good with it, especially since they'll say OK, if this province is in lockdown, cities like Shanghai can still up and go and

continue on. They're fine with that. But we're getting to a point where it's starting to be extreme fatigue and you're starting to see people

complain more and more and suggest that this is not sustainable, Richard.

QUEST: All right. Now, I do need to turn to this idea of the U.S. -- the U.S. suggestions that Russia would seek either military or economic help

from China.


Now if this happens, David, if this happens, this would be a dramatic shift in geopolitical tectonic plates. Well, I can see it would back up the

agreement, you know, go to the new best friends forever of the two countries, but it would be a sea change for everybody else.

CULVER: Massive, Richard, you're right. This would be that major shift. Because what we have seen China play in the past several weeks has been

this desire to be in a neutral role, right? They don't want to necessarily pick aside, though publicly, they have said the Kremlin has legitimate

security concerns with NATO's eastward expansion. We've also seen domestically that Chinese state media has regurgitated a lot of Russian

state media playing to the domestic audience here.

But at the same time, they've even suggested Chinese leadership that is, hey, we can be mediators, we can be peacekeepers and all of this between

Ukraine and Russia. We seem to be coming to a point, Richard, where they're going to have to take a stance and show the rest of the world where exactly

they're going to fall on this. They can't be ambiguous and how they're navigating this going forward.

What we saw a few hours ago in Rome, was a meeting between Jake Sullivan and his counterpart, you mentioned him Yang Jiechi. This is a guy who is a

top party official. He focuses on foreign policy in particular. He has the ear of President Xi Jinping. He's a key advisor. And so, the fact that that

meeting lasted several hours according to U.S. officials and they covered a range of topics, no doubt top of the agenda was Ukraine and the crisis


Suggests that perhaps China is going to have to figure out in a tactful manner, how they still appease their northern neighbor, their best friend,

as President Xi has described President Putin and at the same time, help defuse the crisis in Ukraine.

QUEST: But every time this crisis gets closer, as it was with the shelling of the military base in the west of Ukraine. Every time it looks like it's

going to include or could drag in NATO and every time Putin sort of veiled the or not so, talks about non-tactical weapons and things like that,

tactical weapons, China must be scared (INAUDIBLE) well, they might see as a madman is under control.

CULVER: You know what, domestically here, it's interesting, because a lot of that doesn't necessarily trickle down. And doesn't mean there's a

totally ignorant population that doesn't have the awareness of what's going on. But I think there's an expectation that China will act in a pragmatic

manner. Meaning that they will eventually look at what could be damaging to the economy here.

And we mentioned COVID, that's not totally out of context here. That plays a role into this, because they have dealt with the extreme sacrifice

economically. And so, add to that, if they were to align themselves militarily or economically with Russia, is that a sinking ship in many

ways? Well, that create even more damage to the economy here. And so, that's being considered -- we're told at the highest levels.

And U.S. officials say that Chinese leadership is divided over this, understandably so, because ideologically on one part, they want to align

themselves with Russia. Putin and Xi want to stay together and unified in this. On the other hand, they don't want to alienate what are their biggest

trading partners. The E.U. and the U.S. and that would cause even more damage, Richard, the domestic economy.

QUEST: David Culver, excellent. Thank you so much. Quarter to 5:00 in the morning, my word, discussing these major events. I'm very grateful. Thank

you, sir.

Now, staying with China, and particularly the corporate situation, the COVID outbreaks in the country is weighed on its markets and the shares of

its top companies. But there's more going on. Look at these, Alibaba, Tencent, JD.COM and Didi Global. They're down around 10 percent. But these

sorts of sharp losses have been going on for weeks. Alibaba was 170, $200 a share. Didi hit 12, $14.00 a share.

These shares have been absolutely destroyed in value because of work from the Chinese regulator has made the company so uncertain. Let's talk about

Didi. Its shares are 1.79. They fell 44 percent on Friday. And the effort of delisting from New York and getting listed on Hong Kong now has been

suspended. So, I told you before, I have shares in Didi. We bought them to see what was going to happen. Didi is a car riding company. And so,

appropriately to explain the Digi crisis, we use toy cars.


QUEST: The Stunt Garage is the perfect analogy for Didi and its share price. After the IPO, the price reaches a maximum of $16.00 a share but

doesn't stay there for that long because the Chinese cyber authorities move in. They restrict Didi's ability to take on new registrations, make it

difficult on the apps. And the share price immediately falls by $4.00 a share.


It gets worse. There's a general crackdown on technology companies and Didi is not immune. So, guess what, the share price goes down, another $4.00 or

so. As the company is hit. As the situation gets worse, Didi announces it's going to delist and the share price continues to fall. By now, Didi share

price is just about $4.00 a share bouncing around that. And that's when the delisting truck arrives. Didi is off to Hong Kong.

Delisting from the New York Stock Exchange relisting in Hong Kong. But the way this has been done, well, no one really knows how it's going to be. So,

all the shareholders who decide to stay with trapped in the delisting truck as it heads across the Pacific. And as for the U.S. investors, as the

sharks circle, well, unfortunately, they are about to be rocketed into the unknown.


QUEST: And that rocketing into the unknown of course increases. Firstly, because we now know that delisting isn't going to take place in Hong Kong

for the time being. And no one really knows what I'm going to do anybody's going to do. And our 200 shares or whatever it is in Didi seem locked.

David Dollar is -- was the World Bank Country Director for China, now Senior Fellow at the Brookings Institution is with me now.

I mean, Didi is an example, an extreme example of the way in which these large companies, which were high performers are now either in limbo because

of regulators, or stock exchange, and their prices have collapsed.

DAVID DOLLAR, SENIOR FELLOW, BROOKINGS INSTITUTIONS: Richard, you're exactly right. And I think you put your finger on the issue. These are all

firms that are part of the digital economy. These are private firms that have grown rapidly and been successful. And they provide various online

services and platforms. And the top leadership, I think, is really trying to rein these companies in, they would prefer to see Chinese talent working

on hard sectors like semiconductors or advanced machinery and electronics.

It's not a generalized crackdown on investment in the private sector. But it's a very specific crackdown on tech. And the last thing I would say,

Richard is, in each case, you mentioned it's actually a different regulator. So, it's also an illustration of how poorly coordinated things

often are in China, that one regulator is reining in Alibaba, while another one is taking Didi to task and then a totally different one is dealing with

the online tutoring platforms. So, it was a poorly coordinated, but overall assault on these digital firms.

QUEST: Yet these digital firms, it certainly in the case, I mean, they're not sort of Facebook pure virtual. Didi has cars and drivers that will turn

up. JD.Com and Alibaba sell things that will arrive on your doorstep tomorrow. So, there is a wider hindrance to the real economy from doing


DOLLAR: Oh, I completely agree with that. I think this notion on the part of the top leaders, you know, the somehow the virtual economies divorced

from real manufacturing, for example, that's just completely wrong. In today's world, manufacturing is deeply integrated with the virtual economy.

So, I think it's a serious mistake.

QUEST: If we look so we can -- I mean, Didi, who knows what they'll do, their options are getting less and less and less. But if we take, for

example, how China is now going to deal with Russia, where China feels its position. Let's say -- I mean, we don't know whether the Russians have

asked for help economic and military. But what do you see as being China's role now, not just in the global economy but also as they navigate this

extremely difficult route?

DOLLAR: You're right. This is a very difficult situation for them. I'm skeptical China would provide military assistance to Russia. That would

clearly be throwing a tag in with the Russians in a way that is not typically Chinese. And on the economic side, I think there's certainly ways

in which China's continue to trade with Russia. They'll buy some oil and gas. Actually the Western Europeans are going to keep buying some oil and



So, there'll be a little bit of what you might call backfilling from China. But I think you're going to find the big Chinese banks in particular are

going to want to stay away from Russia because they are deeply involved in the world economy, the dollar system, and they don't want to run afoul of

the U.S. Treasury. So, China's walking in line, its rhetoric, will support Russia. But let's see what its importers and exporters and its banks

actually do.

QUEST: Now, I'm not asking for investment advice. Sort of, but remember, we have the QUEST MEANS BUSINESS shareholding in Didi. We were hoping to see

how it would go to the Hong Kong stock exchange. And I'm in trouble with this investment. Aren't we?

DOLLAR: Well, your experience illustrates what's been true in the Chinese stock market from for years, frankly. This tremendous volatility, it's not

a particularly well-regulated or sophisticated market. There's a lot of momentum buying and selling. So, things may go up from here, you may end up

ultimately making some money, or those shares could become completely worthless. So, it's hard to make money in the Chinese stock market in a

consistent way.

QUEST: David, very grateful for you tonight. Thank you, sir. I appreciate it. In a moment --


QUEST: -- I'm going to on the markets. We did see oil recently fell below $100 a barrel. It's well of its recent highs of 130. I'll recap the day's

markets because with the time change different systems in the other, U.S. going one way, Europe going the other. The markets are actually closed now

in America. And I'll update you with everything in a second or two. QUEST MEANS BUSINESS.


QUEST: Oil off on three percent and off the year highs. It is after the invasion. Look at the markets and I'll show you how everything's traded.

The Dow started today day turned green and ended up pretty much where it started. Show me the triple stack and I'll show you a day that went badly

for the NASDAQ with tech stocks very heavily down. They were -- the growth stocks all very sharply off.

And the Dow 30, you're not going to see much change in the Dow 30. Look at that. Even Stevens which is what you would expect. Bearing in mind the way

the market went. Profitable moment after the break.



JAKE TAPPER, CNN ANCHOR: -- THE LEAD. I'm Jake Tapper this hour. A multi- city manhunt underway for the suspect wanted for shooting homeless men while they sleep. Police in New York and Washington, D.C. now say the same

man is behind five such incidents, two of which resulted in murder.

Plus, precious cargo trapped by war. Shelling happening just yards away from a nursery caring for surrogate babies born in Ukraine but destined for

families in other countries.

And leading this hour with break news.