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First Move with Julia Chatterley
Strong U.S. Jobs Gain for March; Europeans Face Easter under Strict COVID-19 Curbs; More than 50 Killed in Train Derailment in Taiwan. Aired 9- 10a ET
Aired April 02, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:17]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: A warm welcome to the show this Friday and the major economic story of the day and incredibly
strong U.S. jobs reports and the most potent evidence yet that the recovery in the United States is gathering pace, a net 916,000 jobs recaptured by
the U.S. economy in March. It's the strongest monthly gain since last August.
The biggest contributor, the leisure and hospitality sectors where some 280,000 jobs were created as airlines, bars, and restaurants reopen and
vaccination numbers rise. There were also revisions to the prior two months, too.
It's still vital though to distinguish between reopening and recovery. The recovery still has a way to go with 11 million people still jobless since
the pandemic began, but it is let's underscore it, a good data Friday.
It's also Good Friday ahead of the Easter weekend, too, and the U.S. and European stock markets are closed today as a result, but Wall Street did
wrap up the week with nice gains. The S&P closing above the 4,000 mark for the first time ever. Gains of more than one percent; as well as it is
second quarter start for tech, too.
Amazon, Microsoft and Alphabet all up two percent or more. Alphabet, in fact, closing at record highs, but of course, given those markets are
closed today, Asia the focus in today's session as a result, and the Nikkei outperformed and now that sector and that market up almost nine percent
year-to-date, stronger gains than the United States and the stock market majors there as rising global demand lifts exports.
That's also helping the German DAX, too, up some 10 percent this year so far despite, as we've talked about many times the slow vaccine rollout and
restrictive measures to help vanquish the virus, and that of course, is the key to recovery wherever we look in the world.
Let's get to the drivers. Clare Sebastian joins me now. Clare, let's get to the numbers. A bumper jobs report, blistering hot, I've seen it described
as, too, just walk us through the details in what we saw.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia, this number blew past the sort of official expectations, the consensus is around 675,000
jobs to be added. So this was way past that.
I will say that there was some sort of unofficial expectation circling around of around a million, so this comes in line with that. But if you
look at the picture for the last two, three months rather with these revisions, it really does show that so far this year, we have been seeing
momentum building when it comes to jobs gains.
January, it rose up to 233,000; February to 468,000. So we see as these vaccine programs begin to accelerate in the U.S. that jobs gains are
following. Now, I will say that the U.S. economy is still in a hole, down 8.4 million jobs since the start of the pandemic.
So of the 22,000 lost in March and April last year, there's still some way to go. We still have you know, 8.4 million people who had jobs back then,
who don't have them now. So this is showing momentum, but still a long way to go and homing in, Julia, on some of those sectors you mentioned, this
leisure and hospitality, the biggest winner, 280,000 jobs added.
Of that really, interestingly, almost two-thirds came from food service and restaurants that really shows that sort of the weather was starting to warm
up, restrictions were getting loosened, vaccines were rolling out and these jobs were coming back. That sector, though still down about three million
jobs since the start of the pandemic; also construction and manufacturing were bright spots, rebounding from some weather-related hiccups, and even
despite the supply shortages we've been talking about.
One more thing to mention, Julia, wage growth was something that a lot of people were watching because of worries about inflation on Wall Street.
Wages actually ticked down very slightly.
CHATTERLEY: Yes, that's a worrying sign. It is something we'll continue to watch in particular. We can't take it away from this report, it is a
fantastic report. It's great to add back a million or near a million if you include revisions, jobs that we've lost. But to your point, we're still
down 8.4 million jobs since the pandemic began.
I've seen some estimates, I think Pantheon Economic said we could see one million this month and we've seen close to that, we could see two million
for the next two months, so April and May. Clare, how quickly are those forecasters saying that we could add those remaining jobs back?
SEBASTIAN: You know, I think a lot of people are seeing a lot of momentum out there, Julia, like that isn't far from the sort of various consensus on
this that I've seen that this could really sort of exponentially accelerate, particularly as the weather gets warmer and again, it really
depends on this vaccine rollout and how fast the vaccination program can get ahead of the spread of the virus.
The virus is still spreading. It is still very worrying in certain states, but vaccines are being rolled out really fast, but crucial to point out
that this has not been an equal crisis when it comes to unemployment.
[09:05:07]
SEBASTIAN: Blacks have been disproportionately affected. Black unemployment was still at 9.6 percent in March. So that's much higher than
the average overall. Women have been forced out of the workforce.
So I think we're going to be looking, you know, not only for the overall recovery, but how it impacts different parts of the economy and the
reshaping that we talked about. You know, big box retail has been a winner, traditional retail has been a loser. Delivery has gained a huge amount of
jobs.
So there's been a sort of retooling of the economy, and that's going to play out here as well.
CHATTERLEY: Yes, multispeed recovery, which is the unfortunate thing that we've seen throughout the last year. Stimulus checks and stimulus overall,
also going to come into play over the next couple of months, too. So fingers crossed, it continues to see this kind of acceleration and
momentum.
Clare, great to have you with us. Thanks for that analysis.
All right, let's move to our next driver. Now, millions of Europeans face Easter weekend under strict COVID-19 curbs for the second year in a row.
Dozens of European nations have imposed full or partial lockdowns to discourage large gatherings during the holiday. Even the Vatican is scaling
back events.
Delia Gallagher joins us now from Rome. Delia, various restrictions being enforced in Italy, too. Just walk us through what you're seeing there.
DELIA GALLAGHER, CNN VATICAN CORRESPONDENT: Well, Julia, what we're seeing is not a lot of people. This, as the start of a national lockdown starting
tomorrow, for three days over Easter. It is affecting all of Italy. Keep in mind, of course, that many regions in Italy already for the last two weeks
have been under strict lockdown. But for the next three days, it is going to be total lockdown for the country.
Of course, this is going to affect the Vatican as well. In just a few hours, we'll see Pope Francis in St. Peter's Square, but what you won't see
are the faithful much like last year. This weekend's celebrations are going to be held without people in the Square and in the Church and without the
thousands of tourists, frankly that Italy and the Vatican are used to seeing.
This is the start of the tourist season, normally for this country, and that is something that's going to have some serious economic effects for
this country down the line.
Of course, vaccinations are the thing that the government is focusing on now really trying to amp up their vaccine program. They have an ambitious
program to try and vaccinate 500,000 Italians per day, get them all vaccinated, all adults by the end of the summer, Julia, and the government
just this week, has said that all healthcare workers must be vaccinated if they are working directly with patients.
So any no-vaxx healthcare workers, if they don't want to be vaccinated, they're going to risk being suspended without pay -- Julia.
CHATTERLEY: Wow. I mean, Delia, I remember -- vividly remember a year ago, you and I talking about this and the number of healthcare workers there as
we were just learning how to handle this virus that lost their lives and became sick with COVID themselves. What's the response been to that mandate
for healthcare workers to get vaccinated or be suspended without pay and how are people they're handling just the continuation of lockdown measures?
GALLAGHER: Well, particularly on the healthcare workers, there have been a small group of no-vaxx healthcare workers that didn't want to get
vaccinated, most of them are quite happy to be vaccinated that we have spoken to. But the no-vaxxers say, we can be transferred if we're working
with somebody directly, of course, not happy about the potential for being suspended without pay.
I must say, Julia, there is a general sense of fatigue amongst Italians. I was just speaking to a restaurant owner here, who obviously is very worried
because this is the second year now that he's going into -- that his restaurant can only do takeaway. He's got a hundred employees, and he is
working at 30 percent of his normal revenue.
That is the kind of thing that you hear over and over again, certainly from business owners. This is a country which lives off of tourism. So
certainly, we'll be speaking down the line about the severe economic effects of these shutdowns. Of course, at the moment, the real concern is
to get those daily case numbers under a certain level so that the country can open up again.
So they're focused on the health issue. They're focused on the vaccination program, and hopefully, we'll be able to have a plan for economic recovery
in the near future -- Julia.
CHATTERLEY: Yes. For now, virus versus vaccines. Delia Gallagher, great to have you with us. Thank you.
All right, let me bring you up to speed now with some of the other stories making headlines around the world.
In Taiwan, a train carrying nearly 500 passengers derailed inside a tunnel, killing dozens of people. Officials saying everyone who has been trapped in
the wreckage though has now being freed.
Will Ripley is live in Hong Kong with more. Will, great news that those that have been able to be rescued now have been. What more are officials
telling us at this stage?
[09:10:01]
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Just a few minutes ago, Julia they actually revised the death toll down by one. So that's also good
news. One of the bodies that hasn't been identified yet was mistakenly counted twice.
But you still have a few of the bodies that do need to be identified, which means that there are still some families right now who don't know for sure
what happened to their loved ones.
This -- it is hard to describe how tragic of a day this is for Taiwan. Fifty people dead in this train crash, that's five times how many have died
in Taiwan during the entire COVID-19 pandemic, and in a single moment, you had this catastrophe as this eight-car train, which was driving through
this beautiful area in Hualien County, heading into a tunnel. People are looking out their windows seeing these dramatic mountains and cliffs, and
then they describe just terror as the train started to go off the tracks, flip over, train cars ripped apart.
It was so crowded in this train, nearly 500 people. Some were standing. It was very, very packed.
So imagine if you're there, everybody would belongings, all of that being thrown around.
I mean, the witnesses were coming out, those who were able to walk out on their own just described just utter, utter terror. And there were people,
dozens of people, who were actually trapped in some of the crumpled cars for a number of hours. They didn't get freed until late in the afternoon,
local time.
Probably the saddest thing about this is that this has happened on a very important public holiday for the people of Taiwan and their families. It's
called Tomb Sweeping Day. People get together as a family and they go out to the cemeteries, and they pay their respects and clean off the
gravestones of their loved ones.
So some of the people on this train undoubtedly were on their way to do that. They had the day off. They were there with their kids and their
parents, going to visit their loved ones. And now, you have a situation where there are dozens more people added to the names of those missing
relatives on this Holiday, Julia, of all days.
CHATTERLEY: Our hearts are with those families that are currently in mourning, or those that have been injured, too. It's clearly early days,
Will, what do we know about what might have caused this? Do we know anything?
RIPLEY: There are reports in government run Central News Agency and some video to backup as well that there may have been some type of construction
equipment that slid down a hill and hit the moving train.
This is one of the faster trains that the Taiwan Rail System operates. It could have been going at speeds up to 80 miles an hour. So if you had a
large construction vehicle hit the side of the car, investigators say that could very well be what caused this.
And there are social media videos where people are talking about seeing the truck and seeing the truck hit a car. We know the driver of the train is
one of the people who was killed here along with people in the cars towards the front as it was entering into that tunnel, Julia. This could be the
deadliest train disaster that Taiwan has seen in 70 years, according to their state media.
In terms of the death toll, you just have to go back decades before you find anything close to this. There was a very bad crash back in 2018, as
well. So the fact that you've now had two of these in such close proximity in terms of years is raising questions about rail safety in Taiwan and the
government is looking into it.
CHATTERLEY: Yes, and we'll wait for answers to those questions, Will, and again, our hearts with all those involved in this tragedy. Will Ripley,
great to have you with us. Thank you.
To breaking news now. Foreign ministers from the G-7 group of nations have strongly condemned mass civilian killings in Ethiopia's Tigray region.
CNN, in collaboration with Amnesty International has investigated a gruesome video circulating on social media that shows the extrajudicial
execution of at least 11 unarmed individuals by men wearing Ethiopian Army uniforms. Nima Elbagir joins us now.
Nima, great to have you with us. The conflict in Tigray is waged for many months now and much of the reporting, including our own has found evidence
of Eritrean soldiers' complicity in war crimes, but this is the first time we've seen Ethiopian soldiers implicated. Just explain why this is so
important.
NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Julia, the reporting we did is too graphic to show you on television at this hour. But
just to walk you through it, the video opens with a scene of young men surrounded by Ethiopian soldiers, and that tallies with what we heard from
local villages and family members who say that at least 39 of their loved ones were rounded out by Ethiopian Army soldiers in this region.
Then -- and this is really important, then the person that's filming, you begin to realize is filming very openly. There's even a point at which this
soldier now turned whistleblower we've been able to verify that this was the person who filmed this is back and forward. So there is no attempt to
hide what's happening here.
Then, they move these young men to a separate location and Amnesty and CNN was able to geo locate this location as being about 1.7 kilometers away,
and I want you to take a listen to what is said at that location.
[09:15:20]
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): Why don't you get close and film the execution of these.
ELBAGIR (voice over): The wording here is important, "execution." This is premeditated.
They've rounded up these men to kill them.
(END VIDEO CLIP)
ELBAGIR: They are very clear that this is an execution and therefore, it is an extrajudicial execution. The sense of that impunity by actors in
Ethiopian Army uniforms, official actors, Ethiopian soldiers executing in broad daylight young men that had been dragged from their homes. That is
what is so important about this video.
Previously, the implication had been from the Ethiopian Prime Minister's Office and others that Eritrean soldiers had come in to help fight off the
ousted regional rulers of the Tigray region, the TPLF and that somehow that was what had resulted in these war crimes.
But here we see, Ethiopian state actors openly stating that intent to execute and the part that we cannot show you, although the full report is
on cnn.com is when they begin to dispose of the bodies over the ridge, and what we see there is just a casual disregard for any apparent consequence.
Bodies of young men, we don't even know if they are alive or dead at that point that had been shot at point blank range flung over a ridge and the
families that we spoke to, the families in this region whose young men are still missing and still haven't been able to verify if they are among the
dead, many of them haven't, a few have.
For them, that is the most painful part of this is that Ethiopian Army soldiers rounded up their loved ones at gunpoint. And now they are unable
to even bury these young men in a way that shows the respect and the care that they would like.
So this is incredibly important, and we're waiting to hear, Julia, what further reaction we get beyond the G-7 statement.
CHATTERLEY: Yes, as I mentioned, strong condemnation, but Nima, what now?
ELBAGIR: That is the key question, and that's what we keep being asked by so many of these survivors and the families of the victims. One person we
spoke to earlier today said to us, it's been five months in which we have heard condemnation after condemnation from the State Department and from
the G-7 now, and yet there doesn't seem to have been actual action or consequences taken against the Ethiopian government.
The G-7 has now asked for a verified withdrawal of the Eritrean forces, but as we show in this reporting, in collaboration with Amnesty, it is not just
about the Eritreans, and the solution will have to be the world deciding that the Ethiopian government needs to do more and more needs to be done on
behalf of these victims -- Julia.
CHATTERLEY: Yes, the international community needs to step up. Nima, great reporting. Thank you so much for joining us this morning, Nima Elbagir.
And there is much more as Nima mentioned on this important story on our website, cnn.com and you can see Nima's full report in five hours' time.
That's 2:00 p.m. in New York, 7:00 p.m. in London.
Stay with FIRST MOVE. There is more to come.
(COMMERCIAL BREAK)
[09:21:33]
CHATTERLEY: Welcome back to FIRST MOVE.
U.S. and European markets are closed for Good Friday observances, but investors are surely glued to their screens, nonetheless, after the release
of today's stronger than expected U.S. jobs report, 916,000 jobs were added net to the U.S. economy last month, driven by big gains in leisure and
hospitality hiring. Bars and restaurants in fact, adding more than 150,000 new jobs.
There are further signs that strength is coming back to the jobs market, too. United Airlines saying it will start hiring hundreds of pilots as
travel demand bounces back. The first major U.S. carrier to announce a substantial rehiring of people that once worked, of course, in the airline
industry.
All of this coming one day after blockbuster readings on manufacturing, too. U.S. factory activity soaring to 37-year highs in March, strong
factory growth in Asia and Europe last month, too.
Reopening optimism spilling into the energy markets as well. OPEC Plus announcing that it will gradually increase output by some two million
barrels of oil per day and hope that demand will increase.
The surprise announcement given Saudis nervousness, of course, over supply hikes.
Joining us now is David Kelly, Chief Global Strategist at JPMorgan Asset Management. David, fantastic to have you on the show. This job's number at
the top end of expectations, and I know your forecast for the rest of the year actually are more optimistic than the Federal Reserve's. Your view on
what we saw today and your forecasts.
DAVID KELLY, CHIEF GLOBAL STRATEGIST, JPMORGAN ASSET MANAGEMENT: That's right, this was a blockbuster report. It was -- you can add in to those
916,000 payroll jobs, you can add in an upward revision of 156,000 to the prior two months. So we're now about 1.1 million jobs higher than we were a
month ago according to the report.
And remember, this is before the stimulus plan hit. I mean, this reflects the economy as it was in the week of March 12, and you've still got all
this fiscal stimulus coming. You've got the effects of vaccination on allowing for reopening.
So I think this is the first of quite a few very strong employment reports, this is turning out to be or will turn out to be, I think, a very fast
economic recovery.
CHATTERLEY: For all the forecasting, to your point, we're in a degree of wait and see mode, because we've got the stimulus checks coming. We've got
far broader stimulus for small businesses, for example. We didn't know how much of this money is actually going to be spent, and therefore what the
impact is going to be on things like growth and inflation.
So we just have to sort of give it some time.
KELLY: Well, I think there are things we can analyze about this. I mean, one of the things that's very interesting about this particular stimulus
plan is it's very aimed at lower and middle income households.
And you know, sometimes the government, you know, has a big tax cut, but a lot of richer households get it and they save the money. But what we know
from consumer surveys is that when you give it to lower and middle income households, they will spend it.
Now some of us are just catching up on bills, of course, but that still gives them the wherewithal to spend more money. I think the combination of
people finally having some money in their pockets, and the ability to get out and do some things that they haven't been able to do for a year, and
we're not quite there yet. I mean, we still have to get past the rest of the pandemic, but I do think that the pace of vaccination is very strong.
So by the summer, the economy will be a good deal stronger as even in this March report.
CHATTERLEY: What does this mean for Federal Reserve policy? In your own forecasts, you're also saying that we could see inflation topping the Fed's
approximate target. We discussed this on the show yesterday. Up two percent % in April and remain above that for the rest of the year.
[09:25:05]
CHATTERLEY: Obviously, the Federal Reserve has loosened the way that they look at inflation. We had Jim Bullard from the St. Louis Fed yesterday
saying we would welcome it above two percent. What do you think it ultimately means for policy, David?
KELLY: Well, ultimately, I think the Federal Reserve has to turn tough at some stage. They don't want to do right now, they want to try and keep long
term interest rates low to encourage a full economic recovery, and that's what's called sort of forward guidance.
They say, oh, it will be very easy forever, but I think that by the fourth quarter of this year, you're going to see some very strong economic
numbers, and you're going to have to see some change of tune from the Federal Reserve.
I think they do need to think about, if not raising short term interest rates, they at least need to think about not buying government bonds at the
pace they've been buying them at. I think you'll see a tapering of that early next year.
Bottom line is, I do think long term interest rates and mortgage rates are going to go up over the course of this year as his economy recovers, and as
the Fed begins to get a little bit more hawkish.
CHATTERLEY: When they start to communicate that perhaps the recovery is so strong that they need to adjust policy or tinker with policy to some
degree, will investors be confident enough in the pace of the recovery to accept that and not be fearful of it?
KELLY: Yes, I think so. I mean, you can raise interest rates in an economy with a lot of momentum, and this is an economy with the sort of unique
potential for momentum here.
You've got the sort of unique advantage of this COVID recovery where a lot of things that can just automatically reopen when community spread dies
down, and we have a sufficient percentage of population vaccinations, and you've got a very short and sharp stimulus package here, which also will
help the economy.
So I think, raising rates in this kind of environment probably won't harm the economy, it won't slow it down in any significant way. And it is
important to try to get monetary policy back to balance because, you know, low rates, yes, they're not causing general inflation, but they are causing
asset price bubbles.
You can see that all over capital markets, a lot of distortions caused by very low interest rates, so you really don't want to keep very low interest
rates in a healthy economy.
CHATTERLEY: Yes, we've got a record number of companies issuing positive guidance for earnings season as well. And yet, we're talking about a
situation perhaps where we see higher wage pressures, higher interest rate costs. We've not even mentioned a whopping great infrastructure spending
bill that might be coming, the tax rises, too.
Are investors and analysts as they look towards corporate earnings too optimistic whether it's this year, or perhaps the predictions that they're
making for next year and how should that play into investors' portfolios today?
KELLY: Well, our analysis of the way analysts actually look at this is they're usually not too optimistic about the current here and they are
usually too optimistic about the year ahead.
So seriously, they tend to be pessimists, and they're smoking something when it comes to, you know, two years out. So we think that it will be a
great year for profits. I think profits could be up 40 percent in terms of operating earnings per share this year.
But I think 2022 will be a much harder climb because as the economy will go into next year without a head of steam, but it's going to slow down as the
year goes on, and you will have those stronger wages, you will have those higher interest rates.
So I think, earnings will grow more slowly next year. I don't think analysts have got it too wrong overall. But of course, stocks are priced
very high relative to that earnings expectation.
CHATTERLEY: What should investors avoid, to your point about frothiness out there?
KELLY: Things they really don't understand in terms of valuation. I mean, if you -- it's not difficult to sit down with a spreadsheet, look at the
price of a stock, look at what the company is earning, thinking about what might it earn next year, the year after, the year after that, and ask
yourself, is there any way this company would ever get back to a normal valuation? If the answer is no, then you should be careful about it.
So we're seeing a real dispersion of valuations or some things where people are buying them at prices, which just don't make any sense based on any
long term economic forecast.
So I think, this is -- last year was a year of momentum. This is a year where we need to think about valuations and make sure that the business
that you're buying, that the security you're buying really does make sense when you put it down in a spreadsheet.
CHATTERLEY: Oh, finally fundamentals matter.
KELLY: I think so.
CHATTERLEY: We'll see. Yes. David, great to have you on.
David Kelly, Chief Global Strategist at JPMorgan Asset Management.
KELLY: Thank you, Julia.
CHATTERLEY: All right, up next on FIRST MOVE, new symbols of shame in China. How some Western brands are struggling after being caught up in
tensions over Xinjiang. That's next.
And of course, we'll be back with more.
(COMMERCIAL BREAK)
[09:32:32]
CHATTERLEY: Welcome back to FIRST MOVE. China reportedly hosting a group of foreign diplomats on a visit to Xinjiang, where the government is
accused of carrying out human rights abuses.
The diplomats are from countries friendly to Beijing including Russia, Pakistan and Iran according to the state owned "Global Times." This comes
as some big Western brands face a Chinese backlash over their comments regarding the Xinjiang region.
Selina Wang joins us live with all the details. Selina, anyone looking at this will expect little criticism, if any from these nations. But I think
the backdrop is we've got to remember this is a lucrative market for Western brands. The problem is they're finding it increasingly difficult to
navigate the tense geopolitical backdrop that they face at this moment.
SELINA WANG, CNN CORRESPONDENT: Julia, that's exactly right. And for years, foreign companies have been forced to make seriously difficult
compromises in China for success. The understanding is that you have to play by China's rules if you want to access that critical lucrative market
and that could mean anything from following restrictive regulations to saying a few good words about China.
But as China and the U.S. and its allies are fighting over human rights issues, that relation is becoming increasingly challenging and risky.
In this scenario, you have foreign brands, expressing concerns over forced labor in Xinjiang, where the U.S. State Department estimates that as many
as two billion people have been detained, but trying to address those allegations has landed these brands in hot water.
So the question is: is it even possible for brands in China to simultaneously satisfy the Chinese consumer as well as other global
consumers? It is unclear.
(BEGIN VIDEOTAPE)
WANG (voice over): Here goes the H and here goes the M across China, H&M logos and billboards are getting kicked off advertising frames, scratched
off the wall and even covered in red cloth amid a sudden consumer boycott. The logo is now a symbol of shame in China.
Its products have also disappeared from Chinese e-commerce platforms. CNN's search for H&M on Alibaba and J.D.'s apps yield no results.
The Swedish company is just the latest target of Chinese patriotic fury whipped up by the government.
It all started after a group linked to the Communist Party reposted a six- month old statement from H&M saying it was deeply concerned over reports of forced labor in cotton production in China's far western region of
Xinjiang.
[09:35:06]
WANG (voice over): The company in September said it would stop sourcing cotton from the region where the U.S. has accused Beijing of committing
genocide against Uighurs and other Muslim minorities. These are allegations Beijing has strongly denied.
The Communist Youth League criticized H&M for spreading rumors to boycott Xinjiang cotton while also trying to make profit in China. Posts on China's
Twitter like platform, Weibo, with the hashtag #ISupportXinjiangCotton have been viewed more than seven billion times.
Within hours the fury spread to Nike, Adidas, Burberry, Puma, Converse and others as social media users and state media dug up their old corporate
statements expressing concerns about forced labor reports in Xinjiang.
Dozens of Chinese celebrities publicly announced they would cut ties or end promotional partnerships with these foreign brands. They rushed to defend
Beijing's policies in Xinjiang, even several of China's top Uighur stars.
The outrage spread to the streets of Beijing.
UNIDENTIFIED MALE (through translator): We should boycott them and let them know that China is not a country to be trifled with.
UNIDENTIFIED FEMALE (through translator): I'll resist any brand that has any bad comments about our Motherland.
WANG (voice over): Xinjiang produces one-fifth of the world's cotton and nearly 90 percent of China's cotton annually. In January, the U.S. banned
imports of cotton imports from the region over forced labor concerns.
Beijing's campaign against foreign retail brands came just days after the U.S., E.U. and U.K. sanctioned several Chinese officials over their alleged
role in the crackdown in Xinjiang.
WANG (on camera): Beijing has leveraged the country's massive consumer base for political means in the past. What is the ultimate aim here?
JAMES MCGREGOR, CHAIRMAN, APCO, GREATER CHINA REGION: I think China is feeling really threatened by all of these sanctions, and has decided just
to hit back as strongly as they can to try to get these companies to influence their governments to kind of tone down and back off.
WANG (voice over): But analysts project the drop in sales will be temporary for the targeted brands, with H&M likely suffering the most.
Other brands like Nike and Adidas, who sponsor tiny sports teams are still available on Chinese e-commerce.
WANG (on camera): Here in Japan, retail store, Muji said that it will continue to source cotton from Xinjiang and that it has conducted due
diligence on its supply chain.
WANG (voice over): In fact, it is even advertising products made with Xinjiang cotton on its website.
WANG (on camera): But experts say it is impossible to conduct accurate due diligence on supply chains in Xinjiang and that the only way to ensure that
a brand is not complicit in forced labor is to cut ties.
But not all consumers have the same concerns.
"It doesn't affect my shopping. I trust Muji's products and quality. My house is filled with their products," she tells me.
UNIDENTIFIED MALE: So as long as they continue to hold this current policy, I might think twice to shop in their stores.
WANG (voice over): As tensions between China and countries around the world intensify, brands will increasingly be forced to pick a side.
(END VIDEOTAPE)
WANG (on camera): Experts say that these kinds of campaigns against foreign brands could actually increase as China increasingly tries to use
its economic power to push back against global pressure, especially as we near the Communist Party's 100th Anniversary, as well as the Beijing
Olympics.
What China is showing with this pushback is that it doesn't care as much about international criticism as it did before and that China believes it
is stronger and it doesn't need to cave to international pressure --Julia.
CHATTERLEY: Yes, going its own way. Selina Wang, thank you so much for that and that report.
All right, coming up, after the break, grab that popcorn and get ready for a curtain raiser at Cineworld. The CEO on your big screen after the break.
(COMMERCIAL BREAK)
[09:41:59]
CHATTERLEY: Roaring back to life after being silenced by the pandemic. From today, "Godzilla vs Kong" is on the screens of selected Regal Cinemas
in the United States. It comes as Regal's parents, Cineworld agrees a deal with CNN's parent WarnerMedia to release movies in theaters ahead of
streaming on demand.
Cineworld employs around 30,000 people. It has over 9,000 screens in around 780 locations around the world. Mooky Greidinger is the CEO of Cineworld
Group, and he joins us now. Mooky, fantastic to have you on the show. I said roaring back to live there. This is a huge moment. What kind of
recovery are you anticipating?
MOOKY GREIDINGER, CEO, CINEWORLD: I think it will take a bit of time, but we see the reaction from our customers, it is amazing. You know people keep
on going on the website calling, trying to find more details.
We will have all our cinemas opened in the U.S. by the beginning of May and we are even accelerating now because of the demand at the opening. I guess,
"Godzilla vs Kong" will have a great weekend this weekend. This is what we hear already from preliminary results and we're really very, very excited.
CHATTERLEY: As you mentioned, it will be a slow start, but particularly in the United States, we are seeing vaccines being delivered incredibly
quickly. What kind of recovery, if we judge by the end of this year do you think you can have, in terms of percentage of people returning and coming
back to the cinemas relative to the numbers you had, let's use 2019 as the benchmark.
GREIDINGER: Yes, I would say when I say slow opening, I mean that we are not opening all the cinemas on one day, but I think that what we see from
the reaction within a month, maybe six weeks, we will see already very -- a good result.
If you look overseas and look at China and Japan, cinemas are breaking records there. And so it really took less than expected.
I know a lot of people were talking about the future of the cinema industry. People want to go and see movies in the cinemas, so we are really
confident that in the summer already, we will be up and running almost full scale.
When are we going to reach 2019 numbers? We can't say but it is going to be sooner rather than later.
CHATTERLEY: You just mentioned what we saw in China and Japan and clearly, we've seen huge enthusiasm in China. Do you think they're comparable -- in
that the message is that actually people do love going to the cinema. They may have the option to stream at home and watch movies at home, but they
love to go to the cinema and actually they'll continue to do that going forward.
GREIDINGER: I think that the people that like -- without insulting anyone that people delights -- the most cinemas in the world are Americans. I
mean, the U.S. is still the strongest market and the temptation of going to the cinema is so strong and we see how much people miss the cinemas and
they will be coming back and with the huge success now of the vaccination, it is safe to go to the cinema.
[09:45:15]
GREIDINGER: We are still keeping our safety protocol intact, and we are taking care of every visitor in the cinema and I'm sure that we will see
great numbers coming from the biggest market, which is still the U.S.
CHATTERLEY: There's a critical relationship between the movie studios and the cinemas. You need the movie studios to create great movies, they need
you to present them to some degree, but the balance has shifted throughout the pandemic, at least.
I mentioned in the introduction that you'd signed a multi-year deal with WarnerMedia to have this 45-day window to exclusively present the movies in
the cinema and then they will be available on streaming. Could that adjust? Or does that 45-day window hold continuously?
GREIDINGER: I guess that 45 days is a good number and whether it is 42 or 48, it doesn't matter so much. I agree with you that the balance was
disrupted and it is very difficult to keep a balance when all your cinemas are closed because we were delivering zero dollars.
But right now, when we're coming back, I think there is no argument and all the studios, one like this and one in the other way agrees that platforming
the movies as a locomotive for the circle of life of a movie, the best way is get some theatrical exclusivity and then go to the other markets.
And I'm sure that we will see a shorter window maybe that we saw we had before, but we are going to see a significant window that will protect the
cinemas on one hand, and we will really allow the customers to see first the cinemas on the big screen in the way they like it. And after that, they
will have all the other amenities to see them.
CHATTERLEY: I mean, 45 days would have been unimaginable as a short space of time two to three years ago. Do you think that could become the industry
standard? Clearly, Disney and other big player, Universal, that you have to negotiate with here, too? Or do you think 45 is the max, it could actually
shrink?
GREIDINGER: Look, it depends a lot where it is going. You know, because if it's going to streaming as one thing, if it goes to premium where people
need to pay $20.00 or $30.00 in order to see them or be at home is a different thing altogether.
So there are many opportunities, many adjustments, there are a lot of negotiation to be done around this. But I think that the one thing will not
be changed. I think that the interest of a window and the interest in the theatrical exclusivity is not only ours, it's also the interest of the
studios, and they will do more money and they know this that they will do more money.
Currently, in the pandemic, everybody is trying. There are all kinds of experiments. There all kinds of movements that are being done. I guess,
that the 45 days is a good number, whether it will be a bit shorter or a bit longer.
It depends also a lot on the movie. There are many movies that are holding for 10 weeks or even more. There are many movies that are really producing
some income in the cinema for two weeks, and then they are already done.
So it's very movie specific, but the interest is combined and the studios and the cinemas have the same interest in the way to maximize the income
from the theatrical window.
And I would tell you another thing, you know, watching a movie at home, you can watch a movie at home on many, many things. You can watch it on your
TV, you can watch it on your iPad, you can watch it on your phone.
Going to see a movie in the cinema is not only just going out, it's also a kind of a social event. There is nothing to compare the experience when you
see a movie surrounded by 200 or 300 maybe more people around you, all are laughing, all crying, all are happy, or all are frightened than to see the
movie at home.
So this huge difference and the fact that people want to go out and especially after the pandemic makes me sure that we have going on the right
way and the cinema business will be back on its feet in a big way.
CHATTERLEY: I am sold. Bring us back to life, quite frankly. Mooky, great to have you on. Thank you so much for your perspective.
GREIDINGER: Thank you very much.
CHATTERLEY: Thank you. The CEO of Cineworld there. Thank you.
After the break, a CNN exclusive. We'll show you how a vaccine is made. A look at the new BioNTech facility and scale, it might surprise you. Stay
with us.
(COMMERCIAL BREAK)
[09:52:07]
CHATTERLEY: Welcome back to FIRST MOVE. Most of Europe, in some form of lockdown for the Easter Holiday for the second year in a row. Two big
factors, the European Union's poor performance in getting people vaccinated and a surge of new infections.
Meanwhile, vaccine makers are trying to ramp up production. Frederik Pleitgen is in Berlin and he has just visited a new plant making the
Pfizer-BioNTech vaccine.
Fascinating to have you there. Fred, what did you discover?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, Julia. Well, it's absolutely key to Pfizer and BioNTech's strategy to try and get
more vaccines made than they had originally planned. And we were inside that factory and it was quite interesting, because they were telling us
that originally they thought they were going to be able to do -- produce about 750 million doses in that factory in the span of a year.
Now, they're already saying that they could make up to a billion doses in the span of a year because they've optimized all of their processes. Here's
what we saw.
(BEGIN VIDEOTAPE)
PLEITGEN (voice over): This is the heart of BioNTech's production, a bio reactor that produces mRNA, the building block for the Pfizer-BioNTech
vaccine.
VALESKA SCHILLING, HEAD OF PRODUCTION, BIONTECH MARBURG: So we start in Marburg with manufacturing of the drug substance. This is a biochemical
process that happens basically in every cell. But here, we have shifted to a bioreactor, and this takes roughly one day -- one to two days.
PLEITGEN (voice over): Valeska Schilling is the Head of Production at BioNTech's new plant in Marburg, Germany, which was just certified by the
European Medicines Agency, and she tells me the staff are already ramping up production.
SCHILLING: We all have friends, we have family, we have, you know a lot of people that are affected by this pandemic situation, and we all want to
come out. So we are very happy that we can actively do something against the situation we live in.
PLEITGEN (voice over): The bio reactor is operated in this special clean room. It might not look huge, but can produce enough mRNA for about eight
million doses every two days, BioNTech says.
The company hopes to produce a billion doses within a year at this plant alone, vaccine that's badly needed.
PLEITGEN (on camera): Right now, there's massive demand for vaccines against the novel coronavirus, much more than there is supply around the
world. That's why it's so important for plants like this one to not only get up and running, but to get up and running at full speed as fast as
possible.
PLEITGEN (voice over): While countries like the U.S., the U.K. and Israel are vaccinating their populations quickly, the E.U. and much of the rest of
the world are suffering from severe vaccine shortages. That's despite the fact that so far, BioNTech and Pfizer have exceeded the amount of vaccine
they promised to deliver.
The company's co-founder telling CNN, they are constantly trying to increase production.
OZLEM TURECI, CHIEF MEDICAL OFFICER, BIONTECH: This is new technology. You cannot just repurpose vaccine facilities which are there and you can also
not to train people very fast. So we are working and turning every stone basically to upscale and roll out our capacities.
[09:55:12]
PLEITGEN (voice over): And the company hopes to further pick up the pace with sites like this getting into full swing.
(END VIDEOTAPE)
PLEITGEN (on camera) It's so important, of course, not just Pfizer and BioNTech trying to up their production, but of course, other vaccine makers
as well, and I think it's something that you're really seeing across the board with vaccine makers across Europe and across the world.
They're really looking for ways in how they can make their production more efficient. But also, for instance, try and get in other companies to
produce their vaccine for them as well, subcontractors to make sure as many as people as possible get vaccinated as fast as possible, as of course,
especially here in Europe, Julia, we have that big, big problem of a massive vaccine shortage -- Julia.
CHATTERLEY: Yes, it needs to be a global effort. That's the bottom line. Fred, great job. Thank you. Fred Pleitgen there.
All right, that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. Search for
@jchatterleyCNN.
In the meantime, stay safe. Have a great Easter weekend if you're celebrating it.
"Connect the World" is next.
(COMMERCIAL BREAK)
[10:00:00]
END
