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Quest Means Business
TikTok CEO Faces Bipartisan Hostility From US Lawmakers; Blinken: TikTok Should Be Ended One Way Or Another; Circle Tries To Stabilize After Banking Turmoil; France Ninth Pension Strike Joined By 1 Million People; "Deliberate" Russian Strike On Civilians In Zaporizhzhya; Biden To Make Presidential Trip To Canada; Commercial Real Estate. Aired 4-5p ET
Aired March 23, 2023 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ELENI GIOKOS, CNN INTERNATIONAL HOST: The closing bell is ringing on Wall Street. Early gains have evaporated during the day, but the Dow is hitting
three-tenths of a percent in the green right now. We have some comments from Treasury Secretary Janet Yellen, giving the Dow a late session bump.
It has been a volatile day. We'll unpack that for you in the show.
Well, those are the markets and these are the main events: TikTok CEO faces tough questions from US lawmakers on his app's ties to China.
A day of rage in France as protesters demand President Macron abandon his pension reforms.
And Joe Biden is set to visit Canada for the first time since taking office. Prime Minister Justin Trudeau sits down with CNN to discuss what's
on the table for their meeting.
Live from Abu Dhabi, it is Thursday, March the 23rd. I'm Eleni Giokos. I'm in for Richard Quest and this is QUEST MEANS BUSINESS.
A very good evening, and welcome to the program.
Tonight, the CEO of TikTok tried to defend his app at a hostile hearing on Capitol Hill and that is amid growing calls in Washington to crack down on
the Chinese company.
Secretary of State Antony Blinken told a House Committee that TikTok should be ended one way or another. He said it poses a threat to National
Down the hall, the CEO, Shou Zi Chew tried to respond to lawmakers during a confrontational five-hour hearing. They pressed him on the company's
content moderation policies and they also wanted to know about its user data.
Congressman Bob Latta, asked whether TikTok's parent company can see that information.
(BEGIN VIDEO CLIP)
REP. BOB LATTA (R-OH): Yes or no? Do any ByteDance employees in China, including engineers currently have access to US user data?
SHOU ZI CHEW, CEO, TIKTOK: Today, all US user data is stored by default in the Oracle Cloud infrastructure and access to that controlled by
LATTA: My question is, do any ByteDance employees in China, including engineers currently have access to US data?
CHEW: Congressman, would appreciate -- this is a complex topic today. All data is by default --
LATTA: Yes, I know, but it is not that complex. Yes or no, do they have access to use your data?
CHEW: We have -- after Project Texas is done, the answer is no.
(END VIDEO CLIP)
GIOKOS: Interesting. We've got Natasha Bertrand in Washington. I have been glued to my screen, Natasha, watching this testimony and it was
heated, it was confrontational. And you really do get the sense of the worries around data -- user data.
And I think it was really embodied in that answer that yes, right now, Chinese engineers do have access to the data. We, of course, we are waiting
for Project Texas.
I want you to break down some of the key themes that we heard today.
NATASHA BERTRAND, CNN WHITE HOUSE REPORTER: That's right, Eleni. So he spent, the CEO of TikTok spent a lot of time trying to alleviate lawmakers
concerns that TikTok poses a National Security threat to the United States because of the data that it collects and that could possibly be going back
to the Chinese government.
However, lawmakers did not provide evidence for their concerns that China had been using TikTok to surveil Americans. The CEO of TikTok however,
making very clear that he believes that a new initiative called Project Texas whereby TikTok will be moving a lot of the US data, if not all of it
to servers based in the United States, will go a long way and assuaging lawmakers concerns about the National Security threat.
BERTRAND (voice over): Lawmakers grilling the CEO of TikTok today accusing the social media company of spying on Americans for China.
REP. CATHY MCMORRIS RODGERS (R-WA): TikTok is surveilling us all and the Chinese Communist Party is able to use this as a tool to manipulate America
as a whole. Your platform should be banned.
I expect today you will say anything to avoid this outcome.
BERTRAND (voice over): The CEO Shou Chew rejecting claims that Beijing has any control over TikTok through its Chinese parent company ByteDance
and insisting that Americans data is now largely stored on US soil.
LATTA: Do any ByteDance employees in China, including engineers currently have access to US data?
CHEW: Congressman, I would appreciate -- this is a complex topic. Today, all data is stored by default --
LATTA: Yes, yes, I know, but it is not that complex. Yes or no, do they have access to user data?
CHEW: We have -- after Project Texas is done, the answer is no.
BERTRAND (voice over): Project Texas is TikTok's name for its ongoing effort to move all US data onto servers hosted by the American company,
Oracle, which is based in Texas.
That defense, however, falling on deaf ears.
CHEW: I have seen no evidence that the Chinese government has access to that data. They have never asked us. We have not provided it.
RODGERS: I find that actually preposterous.
REP. JAY OBERNOLTE (R-CA): I don't believe that it is technically possible to accomplish what TikTok says it will accomplish through Project
BERTRAND (voice over): Lawmakers provided no evidence that the Chinese government has used the app to surveil Americans, but they repeatedly
pointed to an episode from last year when four TikTok employees including two based in China were fired after improperly accessing journalist data.
CHEW: We do not condone the effort by certain former employees to access US TikTok user data in an attempt to identify the source of leaked
BERTRAND (voice over): Even so, governments around the world are moving to ban the app, including the Biden administration, which now prohibits
TikTok on Federal devices. Secretary of State Antony Blinken calling for the app to "be ended" in a separate hearing on Thursday.
REP. KEN BUCK (R-CO): Is it a threat to the United States security?
ANTONY BLINKEN, US SECRETARY OF STATE: I believe that it is, yes.
BUCK: And shouldn't a threat to United States Security be banned?
BLINKEN: It should be ended one way or another and there are different ways of doing that.
BERTRAND (voice over): The Chairman of the Senate Intelligence Committee also hinting that the US knows more about TikTok's risks than has been
SEN. MARK WARNER (D-VA): One of the things my legislation would do is require the Intelligence Community to declassify as much information as
possible, so it is not, don't just trust the government.
BERTRAND (on camera): So the big question now is whether this app is going to be banned in the United States completely, because right now it is
currently -- it is currently only banned on US government provided devices. Federal officials cannot have it on their phones, essentially.
But the CEO of TikTok making the argument not only that this is not a National Security threat, because the Chinese government to date has not
asked TikTok for any American user data and cannot readily access it as is. He is also saying that banning TikTok would essentially deprive millions of
influencers, creatives, even small businesses, small business owners from having that app, which they have started to rely on for a lot of their
And so it was a very multidimensional argument that he made, but lawmakers here on Capitol Hill, they really were not buying it -- Eleni.
GIOKOS: Yes. It was really interesting to watch. Just on banning the use of TikTok on government devices. What I find fascinating is when he was
posed that question, he said, actually, no social media platform should be on any government device. I thought that was really interesting.
But look, Natasha, good to have you on the show. I think this is a conversation that's going to continue for quite some time, so much to
Moving on, as lawmakers consider banning TikTok, influencers are saying it is vital to their livelihoods. A group of them gathered in front of Capitol
Hill Wednesday with Congressman Jamaal Bowman.
Several creators have also taken to TikTok to bring their followers' attention to this issue.
(BEGIN VIDEO CLIP)
ANTHONY YOUN, PLASTIC SURGEON AND TIKTOK INFLUENCER: Our government is trying to restrict our freedom of speech and expression like never before.
One hundred million Americans, one out of every three Americans uses TikTok.
CHRISTOPHER CLAFLIN, TIKTOK INFLUENCER: Let's talk about the TikTok ban because in my opinion, this is actually a huge positive for the United
States, because whether you thought you were Republican or thought you were Democrat, if you thought you were red, or blue, or left or right. This has
shown us that politicians don't represent any of us.
OWEN SQUIRES, TIKTOK INFLUENCER: TikTok is the most powerful tool to ever be put in the hands of the people in recorded history, and that is why the
government wants to ban it. Because of this app, there is a powerful collective consciousness that exists amongst the middle and lower class
parts of society that's never existed before and the government is [bleep] its pants.
(END VIDEO CLIP)
GIOKOS: Well, the issue is particularly important to influencers like Koosha Nouri, he has more than 150,000 followers on TikTok and makes 70
percent of his income through videos like this one.
[VIDEO CLIP PLAYS]
GIOKOS: Koosha Nouri joins me now. Hey, cool video, I have to say.
You're in Los Angeles right now. Great to have you on.
I am sure you've been following very closely as well what we've been hearing from the TikTok CEO at the hearing. Is there anything that stood
out for you that might be concerning, weighing that up against the positive impact that TikTok has clearly had on your life.
KOOSHA NOURI, TIKTOK INFLUENCER: Yes, definitely. I thank you for having me, by the way, and I think the conversation is really swaying in areas of
data security, which is important, but I think there are huge points being missed around, the gathering of community, the importance of education, and
really the foundation that this platform has provided for so many people like myself, to really allow people to flourish and grow in a new format
that we've never seen.
NOURI: And something that really does concern, I think, the creator community as a whole is that a lot of these decision makers in Congress and
across the government don't necessarily understand the social media landscape, like the average American or creator does.
GIOKOS: It was really fascinating. I mean, we all use social media platforms. And the one thing that really stuck out for me is, you know,
when they were asked about the financials, the CEO, Mr. Chew was constantly saying, we're a private company, we don't disclose that information, but he
said, look, you are getting data for free. What about paying the users so that maybe that would make you change tack in terms of being a bit more
I know that TikTok influencers do get some income from TikTok itself, but it was just an interesting narrative that is playing out, because this is
the macro picture. I guess you're in it. You're living and experiencing the impact. But from a macro perspective, it is fascinating to see what
lawmakers are thinking.
NOURI: Completely. And to your point about the economic impact for somebody like me, not only does TikTok provide things like the Creator Fund
that does monetize our content, but it is such a huge launching pad and accelerator for so many people creating content to open a world of
opportunity that really does unlock economic benefits and opportunity for all of us across the board.
GIOKOS: Are you worried that the app will be banned? What happens to you?
NOURI: You know, it would definitely cause a total shift in my strategy as a creator as a marketer, as a marketer, as an advertiser, and there is
broad concern around sort of Plan B of if this does go away.
I have been saying repeatedly, I think content creators should continue diversifying their presence across platforms, dipping into all buckets, and
really utilizing every tool that we have. But as a community, we really would feel a loss with the ban of TikTok.
GIOKOS: I mean, one of the biggest questions was, you know, the National Security threat, whether the Chinese government has access to user data.
How does that make you feel if the Chinese government had access to your data and to your peers' data?
NOURI: You know, I think that's raises a broader question around all social media and data in general. I think this is a really new conversation
that we're having with the expansion of social media, and how all social media, even American social media has access to our personal information.
There's other social media channels that have access to health data and that doesn't seem true with TikTok, either. So I think it's a broader
conversation around how our data is accessed in general, which I think is extremely important, but I am concerned about not only the loss of data,
but also the loss of our community.
GIOKOS: And I get that and the conversation was really broadened out to the impact that it is having on kids, on the younger population, that we
don't really know what impact it's going to have down the line and that is concerning even, I mean, from someone like me, who's got a young daughter,
I'm worried about what kind of world she's going to be stepping into.
How is that risk being taken up within your community that's benefiting, as I said, from being on this platform?
NOURI: I think it's extremely important to keep kids in mind, especially in the creator community, and also the people that are behind these
applications, all of them. And I do think content policy guidelines are to be taken extremely seriously. And that the future of children is very
important when shaping our social media landscape.
Although I think TikTok has some of the most rigorous community guidelines, and I think, as creators, we pride ourselves in upholding that and keeping
TikTok a place for education and uplifting people. And especially with different measures around the country that don't necessarily keep children
in mind or looking at -- you know, different -- gun control, laws like that, where there's plenty of things in the country that physically put
children at harm, and that being said, I still think it's extremely important to abide by community guidelines and keep children top of mind as
we create content.
GIOKOS: Koosha Nouri, thank you so very much.
We've been playing in tandem some of your great videos. I'm going to have to find you on social media. Thank you so much for your time. Great to have
you on the show.
NOURI: Thank you so much for having me.
GIOKOS: All right, so several lawmakers questioned the TikTok CEO about its relationship with its sister app, Douyin. Douyin is the Chinese version
of TikTok. It has different moderation policies, and it also limits for users that are in place and lawmakers asked Mr. Chew why it seemed to do a
better job of removing harmful content.
Selina Wang looks into the story for us. Let's take a look.
SELINA WANG, CNN INTERNATIONAL CORRESPONDENT (voice over): Pressure is building again in Washington to ban TikTok, all because it is owned by a
Chinese company, ByteDance.
In China TikTok is banned. In fact, it never existed. Instead, there's a separate version of ByteDance's app in China called Douyin, boasting more
than 600 million daily active users, Douyin was already a viral sensation in China before TikTok launched overseas.
WANG (on camera): So I've got TikTok pulled up on my US phone and Douyin on this China phone. They've got very similar homepages and interfaces. The
only reason why I can access TikTok here in Beijing is because this phone has got an oversea SIM card in it and a VPN to get around China's internet
WANG (voice over): While Douyin has some more sophisticated features especially in live streaming and e-commerce and Doyin users under 14 can
only use the app for 40 minutes a day and see kid safe content.
WANG (on camera): Plus, Douyin automatically puts on this heavy beauty filter when I open up this camera function.
Media is heavily censored in China, so if I type in a topic sensitive to the Chinese government on Douyin, say like Tiananmen 1989, nothing pops up
and I get a text that says no search results available versus on TikTok, you'll see that a bunch of videos pop up about the massacre.
WANG (voice over): One of Washington's concerns is that because of its Chinese ownership, Beijing could use its propaganda and censorship methods
on TikTok, too. The other fear is that TikTok could be forced to hand over data to the Chinese government.
But security experts say the National Security risks are hypothetical at best. Beijing says the US government has been using state power to suppress
other countries' companies.
But the irony is that China has outright blocked countless foreign websites and apps, including Google, YouTube, Facebook, Twitter, Instagram,
WhatsApp, Netflix, and more.
On Douyin, Chinese state media has been sharing TikTok videos from angry Americans.
UNIDENTIFIED MALE: Explain it to me, Joe, why the sudden move to ban TikTok? Joe, if the Chinese want our data, they can just buy the data on
the free market that we love so much.
UNIDENTIFIED MALE: Joe Biden. I am 80 years old. I'm not a teenager. There are quite a few million people on TikTok who are not going to vote
for you if you ban this app.
WANG (voice over): Meanwhile, nationalistic influencers on Douyin are accusing the US government of using National Security as an excuse to crack
down on TikTok because of America's fears of China.
But it remains to be seen if TikTok can convince Washington that it poses no threat.
Selina Wang, CNN, Beijing.
GIOKOS: A programming note, our CNN Prime special is "Time Up for TikTok?" That is airing tonight at 9:00 PM in New York, and that is 5:00 AM
here in Abu Dhabi. So you don't want to miss that.
What would you do if you had $3 billion in a bank that collapsed? I'll talk to the head of FinTech company who had to answer that exact question, the
CEO of Circle is up next. Stay with CNN.
GIOKOS: US markets eked out some gains after a volatile last hour of trading. The Dow finishing the day 75 points higher. It had been up as much
as 165 points as you can see. We're sitting in the green. Investors seemed hopeful this morning that the Fed rate hike could soon come to an end. Of
course, that is the cycle that everyone is focused on.
The S&P 500 also closing off session highs. The tech-heavy NASDAQ seeing the best of, it was up a percent.
In the meantime, a good day for Bitcoin, up about four percent, and it is up around 70 percent this year. The crypto payments giant in the meantime,
Circle, has had a more tumultuous year. They had more than $3 billion tied up in Silicon Valley Bank. When SVB collapsed, so-called stablecoin, USD
coin became unpegged from the US dollar, and can see it's now recovered.
Circle says it has been able to access all of the reserves held with SVB; however, the firm had a rocky start to the week with USD coin redemptions
are pacing purchases.
We've got Jeremy Allaire, who is the CEO of the payments and crypto company Circle joining us now from a Paris.
Could you tell me the moment where you saw your stablecoin unpegging from the US dollar? What that meant for you and your team? And whether you were
concerned about what that meant for your company?
JEREMY ALLAIRE, CEO AND COFOUNDER, CIRCLE: Yes, I mean, the sort of emerging banking crisis in the US started to unfold that prior Wednesday,
when Silicon Valley Bank announced that they needed emergency funding. And by Thursday, you know, we were taking action, like I think a lot of other
people to sweep cash from a variety of accounts into kind of globally systemically important banks, and on Friday, you know, learned that the
bank had been essentially seized. And that was obviously, you know, an extraordinary moment.
So we spent the weekend making sure that we understood how the FDIC was going to kind of process this, understand and communicate with the market
and customers that on Monday morning, we were able to kind of reopen the redemption and minting of USDC, which is something we've done for five
years. We've redeemed, you know, hundreds of billions of dollars of USDC. It's a core promise is that redeemability, and as soon as that market
opened, obviously, and it was clearly communicated USDC --
GIOKOS: This hasn't happened to your stablecoin since its inception, right, this is the first time that it was unpegged?
ALLAIRE: That's right. That's right. And I think you know that --
GIOKOS: You've got access to all your deposits now. The $3.3 billion in funds in SVB, you've got access now.
ALLAIRE: Yes, so we announced actually on Monday that, in fact, the cash piece of USDC was held in globally systemically important banks, and the
rest of the reserves has been always held in short duration T-bills with kind of public daily transparency on that.
And so the market understands that it's some of the best and most stable infrastructure in the world. And that's really critical, but obviously,
tumultuous time in the banking sector and that has continued on.
I think there is a concern about the US banking system right now, and there is obviously also a concern about the regulatory environment as well in the
GIOKOS: Yes, it is absolutely been an insightful couple of weeks, I have to say, for the US and the regulatory environment.
You mentioned your short-term T-bills. You obviously have exposure to US government debt. What is the Fed's move in terms of hiking rates do for
your business? What does it mean for your outlook and your exposure?
ALLAIRE: Yes, so, you know, interestingly, Circle is somewhat of a countercyclical business. So as interest rates have risen, that's grown the
reserve interest income that we receive and so in some ways we've been a benefactor of those rising rates, but obviously rising rates also have
created these risks in the financial system that we're now seeing unfold in US and Europe and otherwise.
ALLAIRE: And so we obviously don't like to see that. But, you know, the Circle reserve fund, which holds those short duration T-bills generates
that short-term T-bill interest.
GIOKOS: I think that the regulatory environment within traditional banks is now again, under the spotlight. It also occurred within the crypto space
with the collapse of FTX last year with people asking, you know, what kind of regulatory changes need to be made to protect the system.
It seems that both systems have some kind of vulnerabilities that need to be interrogated. What is on the radar for you in order to ensure that we
get rid of these issues?
ALLAIRE: Yes, I mean, we have been advocating for years for Federal stablecoin regulation, that allows issuers like Circle to issue digital
dollars, and actually hold the cash at the Fed, and hold them in straight government obligations.
We've always been very concerned about the exposure that a digital dollar on the internet can have to fractional reserve banking. We think that's
going to be a major topic, right? Is the risk taking of banks, is that the appropriate foundation for money on the internet? Or should we design
regulations that allow this kind of base layer of dollars on the internet to be as safe as possible? That's what we've been advocating for and we are
hopeful that this Congress will bring legislation to the table to address these risks.
GIOKOS: Yes. Look, there's always a lag between the conversations and the actions, so let's see how long it takes to put things like that and changes
It was really good to speak to you, Jeremy Allaire. Thank you so much.
ALLAIRE: Thank you.
GIOKOS: All right, the Bank of England's Governor is echoing Jay Paul's message about the state of banking. Andrew Bailey says the system is
(BEGIN VIDEO CLIP)
ANDREW BAILEY, GOVERNOR, BANK OF ENGLAND: We've obviously increased the regulation of the banking system since then. We learned a lot of lessons on
the financial crisis.
We keep learning lessons, of course, we keep learning lessons. That's natural in life, but I am confident that the banks in this country are in a
much stronger position. Their capital is stronger, their funding is stronger. And so far, I think we've seen the signs that they've come
through that robustly.
(END VIDEO CLIP)
GIOKOS: Well, those words came the same day as a 25-basis-point rate rise from the BoE, a move which pushed shares on the FTSE 100 to close down
almost one percent. CNN's Anna Stewart reports from London.
ANNA STEWART, CNN REPORTER: Well, given the ECB raise rates by half a percent last week and the Federal Reserve by a quarter of a percent
yesterday, this decision from the Bank of England came as little surprise.
The labor market is tight in the UK and inflation actually increased in February from the month before coming in at 10.4 percent, far higher than
the Central Bank's two percent target.
It is the 11th increase, a painful cost for many in the UK who hold business loans, credit card debt or mortgages, and it could get worse
before it gets better.
According to the Bank of England's Minutes, investors are expecting rates to hit four-and-a-half percent by August, so a quarter of a percent higher
There was some glimmer of good news though, UK GDP is expected to be higher next quarter than previously forecast and inflation is still expected to
fall significantly, which means hopefully, the Bank of England is approaching the end of its rate hike path.
Anna Stewart, CNN, London.
GIOKOS: Well, violence is erupting in Paris once again in what is the ninth day of national protests against President Macron's pension reforms.
We're heading to French capital, next.
GIOKOS: Hello, I'm Eleni Giokos. And there's more QUEST MEANS BUSINESS in just a moment when will be live in Paris, where anger over proposed pension
reforms has turned into violence on the streets.
And could commercial real estate, be the next big crisis for financial markets?
We will be speaking to the head of shared office giant IWG. Before that, the headlines this hour.
GIOKOS (voice-over): A top Ukrainian general says Russia's attempt to take Bakhmut is running out of steam. He says Ukraine will go on the counter
offensive very soon. Just weeks ago, Russia appeared on the verge of capturing the city in eastern Donetsk. The city has been the site of fierce
fighting for months.
Israeli prime minister Benjamin Netanyahu says his government will proceed with what he calls responsible judicial reforms. In a televised speech, he
tried to reassure opponents who fear he will weaken Israel's judiciary. He pledged to reach a solution that addresses their concerns.
World athletics president Sebastian Coe says the group is now banning female transgender athletes from elite competitions if they have gone
through male puberty. Coe announced the new regulations Thursday. The council also voted to tighten eligibility requirements for female athletes
who produce higher levels of testosterone.
GIOKOS: Protests in Paris have turned violent once again. Demonstrators have smashed windows, started fires and clashed with police. In other
cities, police used water cannons and tear gas against protesters.
The ninth nationwide strike against president Macron's pension reform was mostly peaceful. More than 100,000 people in Paris marched in opposition to
raising the retirement age.
The strikes have had a huge impact on daily life. Regional trains, the metro and flights have been all disrupted. Many schools shut down, the
power supply has been impacted and tons of garbage are piling up in the streets. We've got Melissa Bell in Paris with an update.
It is incredible to see the retaliation of people around the country.
Could you give us an update on what you're hearing from protesters despite the fact that Macron came out with his message, saying, look, this is a
necessity. This isn't a nice to have.
MELISSA BELL, CNN INTERNATIONAL CORRESPONDENT: I think retaliation is exactly the right word. This was just a day after the French president had
those words, not just about the pension reform itself but about what might happen.
The flare ups as he called them, describing the fact that they needed to be brought to heel so that the country gets back to normal. That march has now
come to an end.
BELL: It was here at opera that it ended a short while ago. There was a lot of anger on the streets. There were, as you say, there was the burning
of the rubbish that we saw lining the streets of Paris. And more than a million people in the end that took to the streets of France in protest,
not just at this pension reform. But at the manner in which it has been pushed through.
BELL (voice-over): More determined than ever. They set off. For a ninth official day of protest after a week of unplanned ones. The scuffles almost
nightly ever since the French government announced it would raise the retirement age from 62 to 64 without a parliamentary vote.
The government narrowly surviving two no confidence votes on Monday, but determined nonetheless.
(BEGIN VIDEO CLIP)
EMMANUEL MACRON, PRESIDENT OF FRANCE (through translator): We will not tolerate any flare ups. We will make sure that life is as normal as
possible in spite of those who are blocking normal life.
(END VIDEO CLIP)
BELL (voice-over): The very next morning, normal life blocked from Paris' Charles de Gaulle airport to the country's oil refineries and depots.
Weeks of strikes becoming painfully obvious at gas stations and on the increasingly smelly streets of Paris. The numbers on the streets on
Thursday, also aimed at getting the government to buckle.
UNIDENTIFIED MALE: It's not likely. French people are always protesting for a good social system. This is why we have a good social system.
BELL (voice-over): A battle of wills, neither side seems prepared to back down from.
(END VIDEO CLIP)
BELL: In fact what we've been hearing from the unions is that they intend to continue their protests on Tuesday. They will be back on the streets.
There will be another massive day of protests and strikes. And bear in mind that what we're looking ahead to next week is the visit of King Charles
III, the British monarch coming here to Paris.
And that disconnect between the images of what Paris actually looks like, all that anger on the streets, even as Emmanuel Macron tries to hold a
state visit, should make for fascinating viewing. And I suspect a much less comfortable visit than either the British or the French are hoping for.
GIOKOS: Melissa Bell. Thank you so much for that update. Extremely loud where you are with those sirens. It just gives you a sense of what's going
on in some of the streets around Paris. Thank you so much.
Some investors worry that commercial real estate may suffer as banks adjust to higher rates. Fed chair Jerome Powell is downplaying their concerns. We
will talk about that and more with the CEO of IWG. That's next.
GIOKOS: Ukrainian officials say nine bodies have been recovered from a dormitory building in the Kyiv region. They were killed by Russian drone
attacks overnight on Wednesday.
That same day, Russia also fired missiles at the city of Zaporizhzhya directly at an apartment building whether families were living their lives
as best they could in a war zone. Ivan Watson tells us how those people are responding.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: The cleanup work is now underway a day after Ukrainian authorities say Russian missiles slammed
into the side of these nine story apartment buildings in the Ukrainian city of Zaporizhzhya.
At least one person was killed in the attack and some 34 people wounded. I met some of the families who live here, who survived the explosion and
insisted on staying here again last night, boarding up their shattered windows with wood and staying here, despite the fact that there is no
electricity, nor any heat right now.
I'd like to point out, right here, we've got a children's playground right in front of these buildings. This is the kind of community that was
targeted by these deadly strikes. Now the Ukrainian authorities are offering assistance. They've offered temporary accommodation to residents.
There is aid distribution going on here for people in the neighborhood. This isn't the first time that an apartment building has been pounded by
deadly rockets and missiles here just in Zaporizhzhya alone. The city is about a half hour's drive from active front lines.
These buildings face to the southwest and that is in the direction of Russian occupied territory. So you can logically conclude that the deadly
long range projectiles were fired from there and then slammed into here.
Just last week, I was in another Ukrainian town, Kramatorsk, seeing a similar scene in a lower kind of three story building, suggesting there is
a deliberate military strategy where certainly a pattern where Russia fires these types of deadly weapons at residential buildings. Ivan Watson, CNN,
GIOKOS: U.S. President Biden is preparing to make a long way to trip to America's northern neighbor here, to meet with the Canadian prime minister
Justin Trudeau. That's up next.
GIOKOS: U.S. President Joe Biden is about to depart the White House for Canada. It is his first visit since taking office; he will meet with prime
minister Justin Trudeau and they are set to discuss climate change, the oil field crisis, trade, immigration as well as Ukraine.
I want you to take a listen.
PAULA NEWTON, CNN ANCHOR AND CORRESPONDENT: in terms of what's going on with Chinese influence right now, TikTok has been a topic of discussion.
Your government banned it on government devices.
But I want to ask you as a father, what are your concerns, given that for young people, TikTok is incredibly popular?
JUSTIN TRUDEAU, CANADIAN PRIME MINISTER: Well, I have two teenagers. They're no longer on TikTok. They are -- they -- they are on all sorts of
different social media platforms.
And as a parent, all I can do is try and make sure that they're smart and that they're trying to keep themselves safe and they're making the right
kinds of choices around that.
As a government, we need to make sure that we are giving citizens the tools to keep themselves safe and do what we can to ensure that we're not
vulnerable to cyberattacks or foreign influence attacks or misinformation and disinformation that we're seeing increasingly as a threat to our
NEWTON: The CEO in appearing denies that there's any kind of Chinese involvement in terms of what you think, though, as you know, the prime
minister and intelligence that you see, do you think that China can have its long arm of surveillance within our countries on an app like TikTok?
TRUDEAU: I think there was a significant enough concern that we decided that it would be the most responsible thing to do, to ensure that
government phones cannot -- government issued phones do not -- do not have TikTok.
What that means for individuals, what that means for companies and corporate phones, what that means for other people. I think there's a lot
of reflections and a lot of conversations going on about that.
NEWTON: Do you believe the Communist Party can use something like TikTok?
TRUDEAU: I think we've consistently seen that China uses whatever -- whatever -- the Chinese government uses whatever tools it can to get
information, get data that is going to be advantageous to their aims around the world.
And we've also seen the Chinese owned or Chinese directed companies are very much answerable to the Communist Party of China.
GIOKOS: All right. We've got Paula Newton joining us now.
Paula, fantastic interview with the prime minister there and also really interesting to hear his views on TikTok pretty much aligned with what U.S.
lawmakers are concerned about in terms of national security threats. This is just one of the topics. I'm sure that will be discussed between Biden.
NEWTON: Yes, absolutely. Chinese interference, obviously and what the prime minister called the more aggressive China certainly front and center
but so are things like defense spending.
I mean, look, compared to when Biden came into office and how he thought of the Canadian American relationship, things are completely different,
principally because of Russia's invasion of Ukraine and China's more aggressive posture.
What the United States is looking for is for Canada's step up a little bit more in defense issues but also in things like doing its part in the
hemisphere. At this point in time. One thing that is crucial, though, as well is this issue of critical minerals, whether it's for the green energy
transition or for other innovations.
They know China is leading on that and for that reason the United States and Canada want to work together. I know you cover this a lot, you know, in
terms of actually trying to get those critical minerals to market, some people have looked at Canada and said that you're too slow.
The United States would like to see a better timeline on that, as they would like to see on many other issues. When it comes to Canada.
They know that Canada's considerate and deliberative when they're doing their policy decisions but the United States is saying loud and clear. This
is a time for our allies to step up in ways they never would have thought possible 1.5 years ago.
GIOKOS: Exactly and working together is going to be absolutely vital with, you know, I guess, with tensions rising in various parts of the world. The
climate change issue is really a fascinating one. And there needs to be, I guess cohesion between the two nations on the next steps to catalyze the
How much credence is this going to I guess -- how much attention is this going to get?
Would you say.
NEWTON: I mean, look, these two leaders know that they are allied on how they are going to come to that green economy right.
NEWTON: And they are really keen on trying to tell both people in the United States and Canada that this is going to mean jobs. It's going to
mean prosperity, not just a green transition. They know how important it is.
What it is at issue, though, is again the timeline and you know that earlier this month when the Biden administration did, in fact approved that
Willow project right that has to do with trying to mine for oil in Alaska.
When you talk about things that Canada can do they say that these issues about trends transiting the economy from the fossil fuels to clean energy,
they say this is a national security issue for both countries.
GIOKOS: It is going to be interesting. Absolutely, Paula Newton. Great to see you. Thank you so very much.
All right so banking turbulence puts real estate in the spotlight. Some investors worry that struggling banks may undermine commercial real estate.
Fed chair Jerome Powell was asked about that yesterday. And here's what he had to say.
(BEGIN VIDEO CLIP)
JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: You know, we've -- well aware of the of the concentrations people have in commercial real estate. I really
don't think it's comparable to this. The bank -- the banking system is strong, it is sound, it is resilient. It's well capitalized.
And I really don't see that as at all analogous to this.
(END VIDEO CLIP)
GIOKOS: Right. For the U.K.'s commercial real estate markets, some relief could be on the way. Falling property values are projected to ease, slowing
to a 1.6 percent fall in the second quarter. That's a vast improvement from the almost 3 percent fall forecast for this quarter.
Mark Dixon is the head of the workspace company, IWG. He joins me now from Monaco.
So great to see you. I was just looking at some of your numbers your annual year financial performance. The highest numbers that you've seen in your 34
year history. And I guess there's fear that we will see a big shakeup crisis coming through in the commercial real estate space.
But during the hybrid model, which is super fascinating, what are your projections right now of the risks on the horizon?
MARK c, IWG: Well, look, sit's it's a very uncertain economy. Tech is changing the way people work. People are adopting and companies still
adopting hybrid working globally. It's a global phenomenon and it will change real estate.
Our own company is growing very quickly to meet demand as the more and more hybrid workers come into the workplace. And you know, we expect this year
to be another year of quite rapid growth as the market changes.
GIOKOS: When I was just looking at some of the surveys that you've -- that you've been conducting and the data revealing that people are willing to
give up a significant chunk of their salary to still work from home or to embark on this hybrid model.
And then I wonder what that would actually do in terms of occupancy rates in commercial real estate and where that's going to cause a big gap and how
that is being priced in.
DIXON: Well, look, I don't think it's really -- the change hasn't really been priced in yet. I mean, the change here is the geographic change. This
isn't about people working from home or people coming to centralized offices in CBDs.
This is about people working in a hybrid way. What they don't want to do is to commute. They see it as a waste of time. But they don't want to work at
home. Most people want to work close to home and have a short commute.
They want to leave home, have a break, work and then come back home and they also want to work with other people. Those people may be working for
different companies. But they want the social interaction you get from working for an office.
So look, the commercial real estate, the office is not dead. It's just changed its location and it's changing progressively as we move through '23
GIOKOS: Yes. With a weekend economy that has been basically priced in all over Europe and the U.S., we just don't know whether this is going to be a
soft or hard landing. How deep a recession could possibly be. We don't know what the inflation outlook is ultimately going to be.
We've worried about the banking sector and vulnerabilities that could still possibly exist.
How does that play into what your projections are, what you're able to do at IWG and whether you have to start being a little bit conservative with
the uncertainty that's coming through?
DIXON: Well, look, we absolutely agree that the economy is very uncertain. It's highly likely that we will see recessions in many of the countries we
operate in. We operate in 120 countries around the world.
So you know, they're all operating at a different pace. But what we're seeing amongst their customer base, amongst CEOs and finance directors, is
they are looking for ways to save money. They're looking for ways to be more flexible.
So they're also looking to adopt hybrid working because it's what the workforce wants. They can save about half their cost and it also is really
good for the planet. They -- it reduces carbon footprint by about 70 percent.
So that is also -- that uncertainty is also forcing change.
GIOKOS: Well, we've -- I think we've experienced so much change over the last few years. And it's still safe to do so. Mike Dixon, thank you so very
much for your time.
Well, that is it for QUEST MEANS BUSINESS. I'm Eleni Giokos in Abu Dhabi. "THE LEAD WITH JAKE TAPPER" starts now.