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Quest Means Business

US President Fist Bumps Crown Prince Mohammed Bin Salman; Saudi, UAE Say Oil Market Is Balanced, No Need To Pump More; Stocks Surge On Positive Earnings, Retail Sales Report; Biden Considers Action On Trump Era Tariffs; Depositors Fight To Recover Savings In Rural China; Depositors Fight To Recover Savings In Rural China; Biden: Saudis To Invest In U.S. 5G Technology. Aired 3-4p ET

Aired July 15, 2022 - 15:00   ET



PAULA NEWTON, CNN INTERNATIONAL HOST: Stocks are ending the week on a positive note. In fact, investors sort of have gone through some bargain

hunting here. They took a breather after five days of losses.

This is the markets and these are the main events.

US President meets Saudi Arabia's Crown Prince, beyond the optics, what's at stake for geopolitics and energy markets?

The unthinkable conditions facing Ukrainian farmers as they try and supply wheat to the rest of the world, and zero COVID is crushing China's economy.

The country reports dismal growth during the second quarter.

Live from New York, it's Friday, July 15th. I'm Paula Newton and this is QUEST MEANS BUSINESS.

Tonight, the US President is in Saudi Arabia, a country he once pledged to make a pariah over the death of journalist, Jamal Khashoggi. Now, Joe Biden

arrived in Jeddah to meet with the Mideast leaders about a regional security energy production and other issues. But White House officials say

the visit could help to reset US-Saudi relations.

Now, a few hours ago, Mr. Biden exchanged the quickest fist bumps, you see the still there, believe me, it was quick -- with Crown Prince Mohammed bin

Salman. US Intelligence agencies accused the Crown Prince of authorizing the attack on Khashoggi.

Now, the country's de facto leader denies having played a role. Mr. Biden has been downplaying this moment for weeks now. That moment, you see there,

saying he was not going there to meet with MBS, but rather to attend international talks.

The White House is well aware of how this visit might look around the world. US officials say though that it is what they call a practical way to

address important global issues.

CNN international diplomatic editor, Nic Robertson joins me now. He is on the ground in Jeddah and has been watching all of this. Nic, good to see

you there.

So the White House says it wants practical solutions. We will get to what those look like for energy. But first, I want to get to that regional

security issue and specifically Iran. How did that play into today's visit?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes. I think the Iran issue is going to get a lot bigger hearing tomorrow in the GCC plus three,

partly because President Biden is going to sit down and have some bilaterals with the Iraqis and the Iraqi Prime Minister before leaving

Iraq, said he wasn't going to get into any international or any sort of alliances against another country, meaning Iran, that will be a very

difficult position for Iraq to take, particularly given the influence they have there.

And he said he's not going to use Iraq to be used as a base to attack any other country. So Iraq there, if you're looking at a regional security

alliance, the type of which President Biden was talking about in Israel, with Israel, about Iran's move to nuclear weapons and Israel's desire to

have a strike capability in the sort of planning that if Iran is about to acquire and manufacture a nuclear weapon, then they should have that.

So Iraq sort of added that equation. The UAE earlier today, who were also having a bilateral with President Biden tomorrow morning have also said

that they are not going to be part of an alliance to threaten other countries in the region. President Biden's other bilateral will be with the

Egyptians. Again, they will have their own way of framing their concerns.

I think with the Saudis, and it is not clear what's come up in that meeting this evening, there is a lot -- it will have been energy, but the security

component as far as Iran is concerned and Saudi certainly does have a lot of concerns about Iran's proxies in the region in Yemen.

They've hit oil refineries here. They hit this city, Jeddah, just a few weeks ago, just a few months ago with cruise missiles just before the

Formula One event here got underway. So Saudi has got big concerns there.

But they are not as forward leaning on this as Israel because the Saudis recognize with their massive oil infrastructure scattered across the

country, they has a lot of soft targets, and that if there was any escalation of violence with Iran, their economy could be smashed and that

would really put back their big effort here, which is to rejuvenate the country, the Vision 2030 as the Crown Prince calls it say.

You know, there's going to be -- what Biden is going to get is a lot of different views on this, Paula, that I think this is what he is going to

walk away with.

NEWTON: Really, and we know the Saudis have not been really impressed with the US having anywhere near the kind of robust response they want,

especially with those key energy, you know energy networks really in the crosshairs here.


And I want to get to that issue of global supply of crude. There were no immediate promises here, but what is President Biden hoping for in the

coming months, at least?

ROBERTSON: You know, the White House comes into this knowing that President Biden carries a big burden on his shoulders, because Europe is

suffering from a spike in oil prices, the same way as the rest of the world, the same way as the United States. But it is has a bigger problem

and a bigger resonance for President Biden and his European allies, because part of the reason for that shortage of oil and the increase in price in

oil is because of Russia's war in Ukraine.

So if there isn't a fix to this spike in oil prices, it makes President Biden less unpopular at home, it makes European leaders less and less

popular at home. And, therefore the willingness for the public to support the countries in the fight against Russia gets diminished. So there's a big

burden on Biden coming here.

So the White House has been looking to get some sort of commitment from the Saudis that they will increase oil. And what the Saudis are saying is,

look, we're not a spigot. We don't have endless capacity. Even if we gave you oil, it wouldn't affect the markets right now. You don't have the

capacity to refine it, and we don't like this equation that comes, you know, of security for energy. We want a different equation going forward.

So I think what people are going to lean back on here and point towards is the fact that OPEC+, according to the Saudis have been increasing the

supplies of oil to the global market by about a million barrels over the past few months, and looking ahead for the next couple of months, expect

also a continuation of that increase, a commitment OPEC+ gave and the Saudis won't want to break what OPEC -- what OPEC+ is doing because that's

been a signature achievement of their foreign policy.

NEWTON: Okay. Nic Robertson, for us. Thanks so much, really appreciate it.

That's the perspective from on the ground. Now remember, despite risking that political capital, we were just talking about what the bad optics of

the meetings in Jeddah, the White House does not expect the visit will end as we were just saying in any specific announcements, right?

At this point, though, right now, Saudi Arabia and in fact the UAE are the only OPEC countries able to pump additional oil. You heard some of what Nic

was saying there, the two could output two and a half million more barrels a day with the bulk of that coming from Saudi. Despite rising costs, the

Kingdom says the oil market is in their words, "balanced." And there is no need to produce more.

Regina Mayor is the Global Head of Energy at KPMG.

Thanks for joining us, it has been a busy few months. Can you help us settle a debate here? Is there or is there not significant spare capacity

in Saudi and OPEC, that could materially now move the needle on the price?

REGINA MAYOR, GLOBAL HEAD OF ENERGY, KPMG: Well, I find that interesting, Paula, that they're saying that they have two and a half million barrels

per day of spare capacity that they could turn on, because everything that I'm hearing across the industry and from senior executives that are in the

know, they're saying that OPEC+ is really at its fair capacity level.

So what they would be able to do would not be able to make a hugely material difference and we are going to be in a higher price situation for

longer, unfortunately. Current markets, I believe, with the dip that we've seen is just a temporary reprieve.

NEWTON: And that's interesting, because if we get some perspective here, oil right now is priced about where it was before Russia invaded Ukraine,

and it was still at that point kind of uncomfortably high, right, around 100 bucks? Do you think -- and I think I hear you from what you've just

said that the supply crunch will continue in the coming months, and that that will lift oil prices in the longer term anyway.

MAYOR: I think we're looking at a situation where we'll continue to see triple digit prices across the board. I do hope it stays more in the low

hundreds or high 90s versus the 120s that we've seen recently. But the underlying fundamentals for supply haven't changed.

We do think OPEC+ is at or near capacity. Demand is at pre-pandemic levels, and that's with China still on a lockdown. So we anticipate that that will

come off soon. The SPR release that the administration has been doing is set to roll off in a few months, and they're going to have to replace those

barrels in the SPR.

The good news is, is we're seeing US production start to inch up. It's at 12 million barrels per day. We're seeing stock levels rise for crude oil in

the US, gasoline, and distillates but I believe and other analysts believe that is not going to get us back into the, you know, the 70s or 80s, which

was already high when you think back to pre-COVID levels.

NEWTON: Yes, those were quite extreme though. At some point, we had a negative oil price. I have to ask you, you mentioned China there, do you

think there will be a coming supply crunch as well if China gets past this COVID issue they're having and their economy really starts to go



MAYOR: Absolutely and we're just seeing it in terms of the demand all over the world, so I think that the Chinese demand has not unlocked. I think

there's still lots of supply chain bottlenecks that are decreasing energy demand.

So I think that we're going to continue to see upward pressure on demand. Financial markets are pricing in recessionary concerns that we're not

seeing impact the physical market yet. So, that's why I think it's more of a temporary reprieve.

I was in Frankfurt just last week and it is a very real concern on the continent about natural gas supplies as well. So, we're just seeing demand

go up and up and supply being constrained and we're not going to be able to fix that really quickly. I think your reporter called it a spigot, we don't

have a spigot, unfortunately.

NEWTON: Absolutely. We'd all love that. And before I let you go, you were just mentioning you were in Europe and let's talk about that natural gas


President Macron saying, look, encouraging the French already to try and ration, do you think that we are going to have a long hard winter there

looking -- and keep in mind, natural gas prices are through the roof already?

MAYOR: Absolutely. And that's what I'm concerned about. I know we've been hyper focused on the price of gasoline, because it's been summer driving

season. The natural gas prices are three four times just at the hub, like at Henry Hub, for example. And so if we have an extremely cold winter,

that's going to bite substantially from a price perspective, too, and Germany is already starting to ration.

What the problem is, is that now is the time that the European continent typically rebuilds natural gas stock supplies, so that they can then burn

it off during the winter months. With what's happening in Russia and Ukraine, they are not able to rebuild the stocks and so we're really

worried about what that means for the winter months.

NEWTON: Absolutely. And we've had guests on the show saying they're not where they need to be yet in terms of that storage for winter.

Always good to talk to you, Regina. Have a great weekend. Really appreciate it.

Now, US markets are rallying today, as we were saying. The Dow picked up more than 600 points following optimistic new bank earnings and a Congress

report saying US retail sales rose by a full percentage point in June. US consumers spent some $680 billion for a broad range of goods and services

from cars to groceries. Now sales, in fact, though, did drop on building materials and clothing.

Now the new data does not adjust for inflation. And this is key. It's currently as we've been saying here, at a 40-year high. So some of that

spending jump is caused by people actually just having to pay more not necessarily buying more.

Rahel Solomon joins me now. And Rahel is sick of me saying this, because that's exactly what I told you a few hours ago, but you warned me about

some other things.

Now, US consumers, you know, seem undaunted and even if they're not feeling great about the economy, they're out there, right? They're still out there

in strength?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, look, I think it is an important point about inflation. But yes, this came in, this number came in

hotter than expected. And Paula, as you know, with so much negativity right now, it doesn't apparently take much for the markets to bounce.

So the number came in at 1.1 percent higher than last month. That was higher than the expectation of eight-tenths of a percent. And so yes, the

market has bounced because that was stronger than expected and the consumer is still spending, although it doesn't account for inflation.

But I think when you look under the hood of the number, it tells a more nuanced picture, and perhaps a concerning picture about where the consumer

is spending. And this is what's important, when we look at yearly, some of the biggest gainers in terms of consumer spend, it is on essentials.

Gasoline, no surprise to anyone in the US who has been paying for gasoline prices -- gasoline, a huge part of sales.

Also grocery, food, also a huge sort of driver over the last year and also some online shopping. But also Paula, when you look at the biggest

declines, it also tells a big part of this picture. It is discretionary spend. Consumers are pulling back on non-essential things that they do not

need, things like electronics, appliances, department store sales are down, clothing is down, and so while overall the consumer has proven remarkably

strong in this 40-year high inflationary environment, still clearly becoming a bit cautious and pulling back on things that they do not need,

things that they want in this environment.

And of course, the question has been all along one of the silver linings has been well, we have the strength of the US consumer going for us, and to

a point that has been true. The US consumer is the backbone of the US economy. But the question has been, but how long can Americans continue to

weather 9.1 inflation, 40-year high inflation? And that is the question, and we really don't know the answer to that.

But when you look under the hood of this report today, it shows something that I think is a little bit more concerning that Americans are sort of

becoming a lot more cautious about where they're spending. It is however no surprise because inflation is so high, Paula.


NEWTON: Yes, interesting that investors went bargain hunting anyway. Rahel you had a lot of data to get into. Thanks so much for getting into it. Have

a great weekend and we will see you next week for more earnings. Appreciate it.

Now, I just want to update you on a story we've been following closely here on QUEST MEANS BUSINESS, the dispute, of course between Emirates Airlines

and Heathrow Airport.

Now after a meeting between the two sides, Emirates has now agreed to cap further ticket sales from Heathrow until mid-August. That's according to a

statement released by Heathrow; however, Emirates' existing flights from Heathrow will in fact operate as scheduled with no ticketed passengers

being impacted.

As you may remember, Emirates this week released a heated statement objecting to planned capacity cuts at Heathrow.

Okay, next for us, Ukraine's unexpected line of defense. The country's farmers risking their lives to bring in a vital part.



NEWTON: The EU is proposing to tighten its sanctions against Russia. The new measures include banning imports of Russian gold, something other G7

nations have already done and it updates EU sanctions to ensure they don't affect Russian wheat exports, a move needed to protect global food security

and it extends existing sanctions until at least next year.

Now Ukraine's wheat also endanger as are the farmers working to harvest it.

CNN's Ivan Watson reports from the frontlines.


IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): A war against one of the biggest bread baskets in the world. Ukraine's fertile

farmland, now a battleground. Military drone footage exclusively obtained by CNN shows Russian artillery pounding wheat fields, burning the summer

harvest charcoal black.

Farmers race to protect their crops until Russia's invasion. Ukraine was the world's fifth largest exporter of wheat.

(UNIDENTIFIED MALE speaking in foreign language.)

WATSON (on camera): All right, this looks like some kind of munition over here.

WATSON (voice over): Now, Ukrainian farmers are harvesting a deadly crop.

WATSON (on camera): Mikhail (ph) says these are pieces of Russian rockets that they gathered out of the fields.

WATSON (voice over): Mikhail Lubchenka (ph) takes me on a tour of his farm.

WATSON (on camera): He'll show us -- that's another shell strike.

(MIKHAIL LUBCHENKA speaking in foreign language.)

WATSON (voice over): Acres of wheat waiting to be harvested within earshot of pounding Russian artillery.


(on camera): This is absolutely surreal. We're amid the wreckage of previous battles, armored personnel carriers, military vehicles, and then

you've got farmers out here that are harvesting wheat right now.

The vehicles that have been destroyed here, this could have happened back in March, February much earlier. But we're also seeing these impact craters

from shell strikes that we're told, probably took place within the last couple of weeks.

WATSON (voice over): Despite the threats, these brave farmers still bring in their harvest, only to face another obstacle.

(MIKHAIL LUBCHENKA speaking in foreign language.)

WATSON (on camera): This is 3000 tons of wheat from last year's harvest.

(MIKHAIL LUBCHENKA speaking in foreign language.)

WATSON: He can't sell this wheat because the Russian military has blockaded Ukraine's ports. So, there is no way for this to be sold except

at an enormous loss.

WATSON (voice over): Ukrainian ports where ships once carried millions of tons of grain a month to global markets now blockaded by the Russian Navy.

The logjam, driving up global food prices, triggering warnings of famine in some of the world's poorest countries.

Last month, Ukrainian military forced Russian troops to abandon Ukraine's Snake Island in the Black Sea. The Snake Island victory freed up channels

to the Danube River. Ukraine reactivated Soviet era ports on this waterway as an alternative route for the export of grain.

But experts warn the river can only handle a fraction of Ukraine's pre-war cargo. This week Ukrainian, Russian, and UN delegations meeting in Istanbul

say they reached a deal in principle to resume shipments of grain by sea.

But Ukrainian farmers continue to face deadly threats on land, making it too risky for many to plant crops for next year.

This frontline farmer vows not to give up.

(MIKHAIL LUBCHENKA speaking in foreign language.)

WATSON (voice over): "Our soldiers are fighting and dying to get rid of these occupiers," he says. "We need to feed our country, the soldiers, and

help the whole world with our food. That's why we'll keep working." He calls his farm the second front in this deadly war.

Ivan Watson, CNN in southern Ukraine.


NEWTON: Now, the UK is issuing its first ever red heat warning with temperatures there expected to reach record highs next week. Extreme

weather meantime is being felt right around the world. Europe currently in the throes of a dangerous heatwave. The dry air leading to wildfires from

France to Portugal and similarly, scorching conditions in China, where 84 cities are now under the highest level of heat alerts.

Scientists say climate change as a result of human activity is to blame for an increase in that severe weather.

WattTime is a nonprofit using clean energy to fight climate change. Its technology allows companies to track their emissions, while also offering

ways to lower them.

The bonus according to WattTime? It says that its solutions clean up energy usage without increasing costs.

Gavin McCormick is the co-founder and executive director of WattTime and he's also founded Climate Trace a nonprofit that tracks greenhouse gas

emissions in real time, and it is really good to see you on what is going to be a hot weekend all over the world, and I hate to be pessimistic, but

on a day when we have the American President, right, globetrotting, to try and drum up, let's face the facts, more fossil fuels. It doesn't feel like

we are getting anywhere with emissions. Am I wrong?

GAVIN MCCORMICK, CO-FOUNDER AND EXECUTIVE DIRECTOR, WATTTIME: I agree that the last year has been pretty tough. The situation in Ukraine has only

aggravated how much the global demand for fossil fuels just keeps going up. I like to zoom out sometimes and say, if you look at the timescale of the

last few years, it's not all bad news. We are definitely making progress in sectors like electricity, where we're still lower emissions than we were in


But the last year has been pretty tough for climate activists.

NEWTON: Now, WattTime, your organization claims to bend the curve of emissions, as you call it, and that you can realize those deeper, faster

benefits of those emissions cuts. So if you're doing that, do you have any real world examples? And crucially, is it leading to less of a reliance on

fossil fuels?

MCCORMICK: Yes, so at WattTime, what we try to do is we try to say how are the ways that new data makes it possible to move faster and cheaper to

reduce emissions? I always love examples like for example a new trend that we're seeing in corporate renewable energy is companies are buying more and

more renewable energy because it's just good business, and they've actually started doing some very smart things like buying it in areas where wind and

solar have more impact.


So I'm intrigued by projects like Salesforce's decision to buy wind in Australia, rather than nearby in California, because for the same price and

the same amount of renewables, they were able to have a lot more impact in reducing fossil fuels.

So we're seeing companies start to use data in ways to say, all right, if this is the budget we have or the timeframe we have, how do we drive as

much impact as possible? That's really new in climate. We haven't seen that before.

NEWTON: And I guess, my next logical question will be -- will it make a dent, though, in kind of the burning of fossil fuels that we're seeing?

MCCORMICK: I think people underestimate the scale of data. One of my favorite statistics is, let's just say for that one example, emissionality,

everybody in the world buying renewable energy started adopting that strategy. It will be 4.3 billion tons of CO2 every single year just that

one little teak could take out of the atmosphere.

So I think it's true that we're up against a pretty serious problem, but people tend to underestimate how much higher emissions would be right now,

if we hadn't done so many smart things with data on energy efficiency and we're starting to see the next generation of those technologies get smarter

about emissions, not just panic, but say, how can we drive more change faster, and I think people haven't yet come to see quite how much impact

we're talking about what technology can bring to the fight, can't do everything, but it can do a lot.

NEWTON: It can do a lot. So what are some of the key misconceptions that we have about where the bulk of emissions are actually coming from?

MCCORMICK: One of the big things that has been coming a lot last year, it turns out that oil and gas is a much bigger deal than we thought. So we

will have better data now that methane emissions are a bigger share of climate change than was previously thought, largely because leaks in oil

and gas pipelines are so much of the problem.

So we're starting to see that even different types of fossil fuels can actually have really different carbon footprints. There's really

interesting projects going on in terms of doing things like could use lower carbon footprint, gasoline. It's not going to totally solve the problem.

But again, it allows technology to take a bite out of the problem while we are trying to build more renewables.

NEWTON: Wow. Fascinating discussion. There is certainly a lot more to get into, but you certainly giving us a path forward at least, especially to

give us all food for thought as we continue to watch these weather developments.

Gavin McCormick, thanks so much. Appreciate it.

Now, China's zero COVID policy is taking a toll on its economy, the country's worrisome GDP numbers. We'll have those when we come back, in a




NEWTON: So we continue to follow a developing story out of Saudi Arabia. As you know, President Joe Biden is there on the ground attending what he's

calling regional talks. You see there a podium is ready for him to speak and we will bring you his remarks as soon as he gets to that podium.

Now meantime, growth in China is slowing as the country deals with the fallout of its zero COVID policy. GDP grew by less than half a percent in

the second quarter. That's the second weakest quarter on record going way back to 1992. Down 4.4 percent from Q1. Now slowing growth in China could

spell incredibly bad news for the already fragile global economy. China's import growth job dropped to just one percent in June.

And the government has acknowledged that more shutdowns could further shrink demand. And of course, disrupt supply for so many businesses around

the world. Lockdowns and economic softening are causing uncertainty for international businesses that of course, operate in China, leaving them to

the question when if ever, things will get back to business as usual.

Craig Allen is the president of the U.S.-China Business Council. And he joins me now from Washington, D.C. And my goodness, have you been throwing

some curveballs? I want to talk first about what had been a buzzword for so long, right? This decoupling from China. Is that happening right now? And

if it's not, what are your concerns in terms of when we see the Chinese data and the slowing economy? What are your concerns about its impact on

the U.S. economy and beyond?

CRAIG ALLEN, PRESIDENT, U.S.-CHINA BUSINESS COUNCIL: Well, thank you so much, Paula. Firstly, decoupling is not really happening. Indeed, U.S.

exports were up 21 percent last year, and 17 percent the year before that. So, exports are doing very well. And investment has done very well. Now,

the slowing of the economy and COVID could change things. Certainly, the dynamics zero-COVID policy that the Chinese government has instituted

creates a huge amount of uncertainty, both for investors and for traders. And we're not certain how this is going to end up.

NEWTON: And I want to ask you about that zero-COVID policy. Certainly, China's shows no sign that they're lifting it whatsoever. Do you think the

worst could be yet to come for businesses that rely that either operate in China and are having a hard time because they're trying to avoid those

shutdowns, or just trying to get any kind of merchandise out of China right now?

ALLEN: Well, the Chinese are very confident that their system basically testing everyone, every 72 hours or so is going to work. And who's to say

that that won't work. But there is a great deal of uncertainty that you're going to have clusters of breakouts, mostly in urban centers that are going

to be very difficult to control. And when there's a factory or a port, or a railroad that goes down, that is going to have or that could have severe


So there's -- we're dealing with a great deal of uncertainty inherent in a virus that keeps mutating and changing and for which we don't really have

adequate defenses. So right now, we're all swimming in far too much uncertainty.

NEWTON: Yes. Which must leave businesses on edge, given the fact that you said there is no such decoupling going on now. I want to talk to you about

us tariffs on China still no moving on lifting them by the Biden administration. Are you getting signals that they will do it? And if so,

how dramatically do you think that will affect us business, if they do it?

ALLEN: Well -- so, we understand that there is a package that has been put together to modestly bring down tariffs on about $10 billion worth of

goods. That's out of a total of $370 billion upon which we've -- have added tariffs. So about three percent reduction.


Now if those tariffs were brought down, I think that the impact would probably be quite modest. Probably felt only in the consumer goods area

which the administration would be targeting. I think that that is -- that the president will have to make that decision when he returns from Saudi

Arabia. Sometime next week, I expect that the decision will have only modest results and practically no results, no impact on inflation, as it is

far too small.

NEWTON: And so you've made the salient point there. What can you say? Because you know there is a debate about this. I mean, U.S. workers are

saying they want the protection that this kind of a trade war offers, and yet your group is saying that it is costing American consumers. What's the

most salient example of that?

ALLEN: Well, according to the Treasury, the average American family is paying $1,300 more per year as a result of the tariffs. And so, consumers

are getting the brunt of this. We believe that tariffs should come down. But in response to market access improvements in China, we want to grow the

economy through exports to China. China's a world's largest import market. And we believe that American products -- many more American products could

be sold there.

Thus, improving market access going both ways, improving trade and investment going both ways would be our preferred solution.

NEWTON: It will be interesting to see exactly as we wait to Joe Biden's comments from Saudi Arabia. We now know what is top of mind for when he

returns to the White House in the coming days. Thanks so much for joining us on this. Appreciate it.

ALLEN: Thank you.

NEWTON: Now, as we were just saying China's year over year growth has steadily declined since that recovery and it was fleeting in early 2021.

Now, while continued lock downs, as we were just talking about are partly responsible for the downturn. China's economic rose go much deeper than

that. The country faced weakened stock markets and escalating real estate crisis and high unemployment especially in the youth sector.

CNN's Selina Wang has this fascinating look on how the Chinese economy is functioning right now.


SELINA WANG, CNN INTERNATIONAL CORRESPONDENT (voice over): They're all struggling to find work. These are migrant workers in Beijing. They

congregate in labor markets like this waiting day and night for a job.

This man tells me he lost his job because his factory shut down during the pandemic.

WANG (on camera): He's saying that it's harder for my work. The pay isn't good.

WANG (voice over): He's been here for four days waiting 16 hours every day in the heat for a job and still hasn't found one.

That's probably because of the pandemic he says. China's zero-COVID policy has inflicted devastating economic pain, grinding entire cities to a halt

for months. Shutting down communities over a single COVID case.

WANG (on camera): And this is the result. This was one of Beijing's most popular bar and restaurant areas packed with people. Now so many businesses

are empty or have permanently closed down. They're unable to survive these on and off lockdowns with no end in sight.

WANG (voice over): Unemployment is soaring, people aren't earning as much so they aren't spending as much. But even saving has become a risky bet.

Since April, Brian hasn't been able to access several million RMB that he deposited in a small bank in Honan, China. We are referring to him only as

Brian, due to fears for his safety.

WANG (on camera): Was that your life savings?

BRIAN, BANKING SCANDAL VICTIM: Yes, for sure. I worked almost 10 years. And that's all I have with my family. I'm losing my weight. I'm losing my, you

know, my mind.

WANG (voice over): He's one of hundreds of thousands of depositors according to state media. Across China currently fighting to recover their

savings from several banks in rural Central China.

Many of them including Brian traveled to Henan for answers. In June, he says they protested outside the local government building for five days

straight. Brian traveled back to Hunnan in July, joining a large scale peaceful protest. But police violently quash the protesters. Videos show

security officers dragging protesters down the stairs, beating anyone who resisted.


Including women and the elderly according to witnesses. Even some of them injured, bloodied and bruised. A day after the violent protests, local

authorities promised to start giving small payments to some depositors. But it's unclear how many people are eligible and how much they'll pay back.

WANG (on camera): Are you worried that without this money, you can't afford a comfortable life for your family?

BRIAN: Definitely. All my savings is gone. And I had just -- I just had my little baby. I have nothing for the family now.

WANG (voice over): They cry and wail exhausted. There's nothing these depositors can do. Authorities say they're investigating the cases. But

experts worry this is just the tip of the iceberg.

MICHAEL PETTIS, PROFESSOR OF FINANCE, PEKING UNIVERSITY: I would be really surprised if you didn't see this spread in a lot of different provinces.

The country has enormous debt problems and very slow growth. This is the worst shape the economy has been in, probably since about 30, 40 years ago.

WANG: For Brian, his vision of China is already shattered,

BRIAN: (INAUDIBLE) die and all you earned is gone. Then you will feel that. Why do you still fight for it? Fight for the future.

WANG: He's hoping to one day leave and raise his child far away from China. Selina Wang, CNN, Beijing.

NEWTON: And we'll be right back with more news in a moment.


NEWTON: And that is a podium shot right there. We are awaiting U.S. President Joe Biden who's going to apparently give us a briefing out of his

meeting with the Saudi Crown Prince. Remember at issue beyond the fact that there are a lot of problems with regional security in the area that Biden

wants to get to. It is the issue of whether or not they will get more oil supply on the market, not just with Saudi Arabia, but with other OPEC


We will wait to see that briefing and bring it to you live when it happens. But in the meantime, here the summer of travel chaos is stopping

holidaymaker -- holidaymakers in their tracks and on both sides of the Atlantic. Now the latest data shows airlines have canceled more than 25,000

flights for August alone with more than 15,000 of those canceled flights in Europe.


And the meantime in the United States, here cancellations are spiking in New Jersey and Florida. Airlines are blaming traffic control staffing

shortages. Our Pete Muntean reports from Newark Airport.


PETE MUNTEAN, CNN CORRESPONDENT (voice over): The summer of travel pain keeps growing with struggling airlines canceling 30,000 flights since

Memorial Day. Now, new data shows where issues are the worst. A FlightAware analysis for CNN shows New York airports leading the nation for flight

cancellations. Eight percent of all flights leaving Newark have been canceled since Memorial Day.

KATHLEEN BANGS, FLIGHTAWARE SPOKESWOMAN: The pain is not spread out evenly. Some airports have much bigger problems than others.

MUNTEAN: Florida airports take three of the top 10 spots --


NEWTON: And we are going to listen in now to Joe Biden as he brings his remark -- remarks after his meeting with the Crown Prince in Saudi Arabia.

Let's listen.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: especially with a Crown Prince and all the ministers from the -- from energy minister to the sports

minister all the way down the line. And got the chance to talk to -- basically the entire Saudi government. And thanks to many months of quiet

diplomacy by the staff, we've accomplished some significant business today. First, as you saw this morning, the Saudis will open their airspace to all

civilian carriers.

That is a big deal. A big deal. Not only substant -- not only symbolically, but substantively, it's a big deal. It means Saudi airspace is now open to

flights to and from Israel. This the first tangible step in the path of what I hope will eventually a broader normalization of relations. Second,

we concluded a historic deal that to transform a flashpoint at the heart of the Middle East wars into an area of peace.

International peacekeepers including U.S. troops will leave Tiran Island and the Red Sea where they've been for over 40 years since the Camp David

Accords. Five American soldiers died on the strategically located island in 2020. And it's important to remember them today. Now, thanks to the break -

- this breakthrough, this island will be open to tourism and economic development while retaining all necessary security arrangements or security

arrangements and the president freedom of navigation of all parties, including Israel.

Third, we agreed to work together to deepen extend the Yemen ceasefire. And you know this bend -- this carnage band in Yemen of late and has been in

place more than three months, resulting in the most peaceful period in Yemen in seven years. We further agreed to pursue a diplomatic process to

achieve a wider settlement in Yemen. Saudi -- and Saudi leadership also committed to continue to facilitate the delivery of food and humanitarian

goods to civilians.

In this context, we discuss Saudi Arabia security needs to defend the kingdom, given very real threats from Iran and Iran's proxies. Fourth, we

concluded several new arrangements to better position our nation's for the coming decades. Saudi Arabia will invest in new U.S.-led technology to

develop and secure reliable 5G and 6G networks. Both here and in the future in developing countries to coordinate with a partnership for global

initiative -- the global infrastructure and investment which I put together at the G7.

This new technology solution for 5G called Open RAN will out compete other platforms, including from China. Saudi Arabia will also partner with us on

a far reaching clean energy initiative focused on green hydrogen, solar, carbon capture, nuclear and other projects with seller -- to accelerate the

world's clean energy transition and to help the U.S. clean energy industry set global standards.

And fifth, we had a good we had a good discussion on ensuring global energy security and adequate oil supplies to support global economic growth. And

that will begin shortly. And I'm doing all I can to increase the supply for the United States of America which I expect to happen. The Saudi share that

urgency, and based on our discussions today, I expect we'll see further steps in the coming weeks.

Finally, we discussed human rights and the need for political reform. As always -- as I always do, I made clear that the topic was vitally important

to me and to the United States. Respect to the murder of Khashoggi. I raised it at the top of the meeting, making it clear what I thought of it

at the time. And when I think of it now and that was -- exactly, I was straightforward and direct and discussing it.

I made my view crystal clear. I said very straightforwardly, for an American president to be silent on an issue of human rights, is this

consistent with -- inconsistent with who we are and who I am. I always stand up for our values.


So that's a quick summary, tonight's outcomes tomorrow with nine leaders from around the region we'll have more. One thing we will discuss is the

multibillion-dollar commitment of the GCC to invest in the partnership for global infrastructure investment, which I announced at the Gg7 last month,

to help address infrastructure needs of low and middle income countries that don't have the wherewithal to borrow the funds to meet the needs of

their people.

And after years of failed efforts, we have now finalized an agreement to connect Iraq's electric grid to the GCC grids through Kuwait, and Saudi

Arabia. And deepening Iraq's integration into the region and reducing this dependence on Iran. And it was pointed out to me that my -- I was reminded

by staff at the time at the meeting that I tried to do that back when I was the early days of vice presidency. Finally, it's done. Being done.

Tomorrow, I'll also be laying out an affirmative framework for America's engagement in the Middle East, to build on these important steps going

forward. The bottom line is this chip is about, once again, position America in this region for the future. We are not going to leave a vacuum

in the Middle East for Russia or China to fill and we're getting results. I'll take a couple of questions now.


UNIDENTIFIED MALE: What was -- what was the Crown Prince's response to your comments about Khashoggi?

BIDEN: He basically said that he was not personally responsible for it. I indicated I thought he was. He said he was not personally responsible for

it. And he took action against those who were responsible. And we -- then I went on to talk more about how that dealing with any opposition to the

criticism of the Saudi administration in other countries was viewed as -- to me a violation of human rights.


UNIDENTIFIED MALE: Mr. President. Sir, two quick questions if I may. First, we just heard from Jamal Khashoggi's wife, who said, after this visit, the

blood of MBS' his next victim is on your hands. What do you say to Mrs. Khashoggi?

BIDEN: I'm sorry if she feels that way. I was straightforward back then. I was straightforward today. What I'm -- this is a meeting not -- I didn't

come here to meet with the Crown Prince. I came here to meet with the GCC and nine nations to deal with the security and the needs of the free world,

and particularly the United States. And not leave a vacuum here which was happening as it has in other parts of the world.

UNIDENTIFIED MALE: On gas prices, if I may, you said it will see relief at some point in the not too distant future. What is the message to Americans

who are looking for that relief now? When should they expect to see a real change in prices, though they've already been coming down? They've already

been coming down.

BIDEN: That's right. They've been coming down every single day, the best of my knowledge.

UNIDENTIFIED MALE: When we'll see the impact of this visit?

BIDEN: I suspect you won't see that for another couple of weeks.


BIDEN: And we'll see more when we see gas stations start to lower their price consistent what their paying for the oil.


UNIDENTIFIED MALE: Do you regret calling (INAUDIBLE) Saudi's pariah --


BIDEN: I don't regret anything I said. Next question.

UNIDENTIFIED FEMALE: Do you still feel badly though, Mr. President?

BIDEN: I just answered your question. Do I regret it? I don't regret anything that I said. What happened to Khashoggi was outrageous.



UNIDENTIFIED FEMALE: You're probably under a lot of fire for your fist bump with the Crown Prince. I just want to give you a chance to respond to that.

And -- but also, how can you be sure that another incident -- another murder like Jamal Khashoggi won't happen again?

BIDEN: God love you. What a silly question. How can I possibly be sure of any of that? I just made it clear. If anything occurs like that, again,

they'll get that response and what's more. The -- look, you've heard me say before. And when I criticize Xi Jinping for slave labor and what they're

doing and he -- and the western mountains of China, and he said, I had no right to criticize China.

And I said, look, I am president of the United States of America, for the United States president remains silent on a clear violation of human rights

is totally inconsistent with who we are, what we are and what we would do, what we believe. And so I'm not going to remain silent. Can I predict

anything's going to happen? Let alone here, let alone any other part of the world? No. But I don't know why you're also surprised the way I react.

No one's ever wondered I mean what I say. The questions -- I sometimes say all that I mean.


UNIDENTIFIED MALE: -- Joe Manchin obviously made significant news right now, which appears to be torpedoing. What was one of your biggest

priorities as it relates to energy and to climate back at home? Your message to those Americans right now who are looking for that relief that

would have a wide impact as it affects the climate and energy specifically.


BIDEN: I am not going away. I've used every power I have as president to continue to fulfill my pledge to move toward dealing with global warming.


UNIDENTIFIED FEMALE: Mr. President, is Joe Manchin negotiating in good faith?

BAIER: I didn't negotiate with Joe Manchin. I have no idea.

ALISYN CAMEROTA, CNN HOST: So you've just been listening there to President Bowden talking about what he thinks he accomplished in these conversations.

Obviously, this visit was controversial. And he laid out basically six tenants of their talks that he defined as deliverables are basically things

that he's coming away with that he thinks were very good. And I'll just start with the bottom, basically, about the Jamal Khashoggi.

He said he raised it at the top of the meeting. He made his view crystal clear about his feelings as he did then about what had happened to Jamal

Khashoggi and how wrong it was. And he said that Mohammed bin Salman claimed that he was not personally responsible, and President Biden said he

thought he was.

VICTOR BLACKWELL, CNN HOST: Yes. The President also talks about conversations over increasing energy supply, climate cooperation, 5G, 6G,

we've got our panel here. I want to start with you, Wolf. Are these the deliverables that the White House hoped to come out of this meeting with?

WOLF BLITZER, CNN ANCHOR: Well, the president wanted to stress, you know, that what he sees as the positive achievements that he secured over the

course of these talks with the Saudis. And he suggested very strongly that the Saudis will in fact, increase production of oil that could -- that down

the road could result in lower gas prices in the United States. He did say, as you correctly point out that at the beginning of the meeting, he raised

the issue of Jamal Khashoggi with the Saudi leadership.

The Saudis came back, I'm told and quickly rejected the accusation that Mohammed -- that the Saudi leadership deliberately ordered the murder of

Jamal Khashoggi. They say that that simply is not true. And they had a back and forth on that during the course of the meeting. And the U.S.

intelligence community believes that MBS, Mohammed bin Salman did in fact order the execution, the murder of Jamal Khashoggi.

And the Saudis fought back on that pretty hard until during the course of that meeting. Some of the other big issues like Yemen, for example, the

president emerged saying that they made some really significant progress in dealing with these issues. So, he was stressing as we -- as we knew going

into this statement by the president, he was stressing what he saw as his achievements. And we'll see if they turn out to be real achievements.

CAMEROTA: Yes. So, Josh, tell us what you heard there.

UNIDENTIFIED MALE: Right. I think no surprises, you know, they trade -- they transferred a couple of Red Sea Islands to Saudi control, in exchange

for not making Israeli planes fly all the way around Saudi Arabia, which was ridiculous in the first place. They -- he mentioned Khashoggi seems

like a box checking exercise. I didn't hear that Biden mentioned any of the American hostages that are still in Saudi Arabia right now. It's on exit

bans, and some in Saudi prisons for tweets and other nonsense like that.

I'm not sure if they mentioned that at all. Investment in 5G, sure, that's great. But, you know, I'll just point all your viewers right now to the

reports today that the Saudi regime doubled the imports of Russian oil this quarter. Double, in other words, they're not helping us fight Russia,

they're helping Russia fight us. And if you think about, you know, sort of what Nic Robertson said earlier, which I respectfully disagree with, you

know, I don't think the Saudis are going to run into Russia arm -- Russian arms if we withdraw.

I don't think they can depend on the Russian military, considering what we've seen. I don't think they want to bet their security on the Chinese

either. And, you know, what we're seeing here is sort of a -- an acknowledgment that oh, well, yes, we need the Gulf, we need Saudi Arabia.

But what if we thought about that again? What if we realize that actually, they need us and we use the leverage that we have rather than succumb to

the leverage that they have? And that's just a thought I believe, you know, as we continue to follow this trip.

BLACKWELL: Jason, your top takeaway?

JASON REZAIAN, CNN CONTRIBUTOR: Yes, look, I mean, I think this is just a yet another example of the United States sacrificing our values for, you

know, perceived, strategic and economic interests that are probably short term. Saudi Arabia is a country that buys a lot of weaponry from us and

that sells us a lot of oil. These are not people that share our cultural ideals or beliefs. It's a country where mass executions happen in public on

a regular basis.

Murdered one of our colleagues from Washington Post as Josh mentioned, there's Americans being held hostage there. You know, I think we could --

we could reasonably demand a lot more from this relationship. That doesn't seem like we got anyway.

CAMEROTA: Gentlemen, thank you very much for helping us sift through everything that we just heard from the president there and what really was

the point that he says was of this trip and then you all giving us the context. Thank you all.

BLACKWELL: Yes. And the president when he was asked about that that fist bump laughed and of course you read this and I'm going to read it again

because it was so concise and potent.